E.I.D.

-Parry (India)
E.I.D.-Parry (India) Limited Limited

A N N U A L R E P O R T 2 0 0 6 - 2 0 0 7
Beyond Challenges
With every vision comes a challenge.
With every serious challenge comes the opportunity to redefine success.
Only, if we can keep our nerve and stare the challenge in the eye.
And that itself is not enough. Our ability to anticipate the challenge, sagacity to build
the reserves to take it head-on and alacrity to seize even half an opportunity, also count.
The steep slopes of adversities have often given our ascent that vertical lift, to rise even
higher. Now again, as another step tests our hold and seeks to rock our balance, we are
ready to stride up these cliffs like intrepid climbers. For centuries, we have been scaling
these heights. And we haven't just survived but thrived. It is time to relive our track
record. And reinstate the fact that we are the country's oldest sugar company. And that
we just can't be stopped.
The Legend
Rock climbing is a fascinating adventure. It dates back to 400 BC. It helped man
survive and hunt for food. Just as jumping, running or swimming, it became a test of
his endurance and skill.

Over the years, evolving knowledge of climbing techniques, improved gear and
sheer toughness of mind made this deadly sport a thrilling one.
A Neverending saga
E.I.D. Parry is over two hundred years old. We became the harbinger of sugar industry in
India more than 160 years ago, surviving wars, famines, epidemics, industrial and
technological revolutions, evolving agrarian trends and patterns and other seemingly
insurmountable upheavals. E.I.D. Parry always looks forward to opportunities that come as
challenges.

The legend of E.I.D. Parry dates back to 1788, when, on July 17, Thomas Parry, a Welsh
trader, first set foot on Indian soil. He foresaw tremendous prospects in India.
And established a business in piece goods and banking. In 1819, Parry and John William
Dare became partners. And their company began to weave a tale of wonder.

After independence there was a strong impetus to Indianise the company. In 1972, the
E.I.D. Parry board resolved to apply to the Government of India for conversion into an
Indian company. What followed is history.
New Challenges
Now there is a new breed of climbers: urban climbers.
Instead of looking for rocks in the wild, they climb the sky-
scrapers in full public-view and media-glare. They crawl up
the outer walls on their way to the top. Though they do not
swing like Spiderman, their feat is no less dramatic.

French skyscraper climber Alain Robert has earned

worldwide fame for his numerous daring and successful
climbing attempts. Robert doesn't use any tools. No safety
devices either. Using only his bare hands and climbing
shoes, he has scaled more than 70 giant structures around
the world.

New Year. New challenges. Newer opportunities.

The year that went by saw an overall economic slow-down
in the sugar industry worldwide. The global statistics show
that sugar supply has grown faster than sugar demand and
this has placed downward pressure on prices in 2006-07.
Sugar production is now at its peak everywhere. Good
seasonal conditions have led to higher production in Brazil
& India.

With a bumper sugarcane crop in 2006-07 and increased

crushing capacities, sugar production in India touched
record levels, resulting in huge inventory build-up. This
put downward pressure on the sugar prices. To make
matters worse, the Government imposed a Sugar Export
ban. When the ban was removed in January 2007, domestic
sugar prices plummeted. And the international prices of
sugar also crashed. This added to the exporter's plight. All
these have resulted in the profits from sugar business
remaining low during the second half of this year. E.I.D.
Parry too suffered a setback.
Nutraceuticals production facility, Oonaiyur
Making adversities work for us.
But E.I.D. Parry has always been a forward looking
company. It plans to bring large-scale investments in the
sugar business by leveraging its strengths in this sector in
the following directions:
Expansion of existing sugar units – E.I.D. Parry is
expanding its sugar unit capacities across all existing sugar
mills. This will help in optimising the crushing period by
increase in throughput, with improvements in process
efficiencies, sugar recovery gains and reduced energy
consumption.
Cogeneration of power – E.I.D. Parry is striving to extract
value from bagasse to produce power (COGEN) to meet
the country's growing energy demand.
Carbon credits – The alarming increase in global warming
has led to the Kyoto Protocol whereby the signatories have
committed to contain the emission of Green House gases.
Developed countries are increasingly looking for the use of
renewable energy sources. The opportunity for India arises
from the demand for carbon credits that developed
countries can buy to honour their commitments under the
Kyoto Protocol.
Other Value-Added products - The company has also
started adding manufacturing units to straddle the entire
value chain of the Distillery from Industrial Alcohol and
Rectified Spirit to Extra Neutral Alcohol (ENA) and Fuel
Ethanol production. The Government of India has made
5% blending of ethanol with petrol mandatory which is in
the process of being implemented across all states and in
the sugar producing states, this percentage is proposed to
be increased to 10 %. Ethanol prices may also be linked to
international petroleum prices.
Based on these growth projections, the Plant Extract
Business – under which NEEMAZAL falls, will also grow.
Investment in Nutraceuticals – The Nutraceuticals division
which became a part of E.I.D. Parry from 1st September
2006 continues to grow in all markets and its products are
currently exported to 35 countries. Spirulina continues to
be in the forefront in the nutraceuticals business.“Organic
Spirulina” has the highest number of certifications in the
world. E.I.D. Parry, the only company in the world with
dedicated R & D for all the three types of algae, is
expected to outperform competition in the business for the
years to come.With increasing medical care costs and aging
population in the west, nutraceuticals (estimated well over
US $ 15 billion per annum) as a category of preventive
health care is bound to grow at a steady pace.
E.I.D. Parry has always been an eco-friendly company. Its
environmental management system policy commits the
business to prevention of pollution, optimal utilisation of
resources and reduction in generation of wastes. Be it in
the production of sugar, bio products or nutraceuticals, the
company uses all renewable resources of nature. Thus,
maintaining the equilibrium in our eco-system. And the
company will continue to keep exploring such possibilities.

Investment in Bio-Products - The Bio Pesticides division of

the company has emerged as a significant player in the
Neem based bio-pesticide business and continues to focus
on its core product – the NEEMAZAL range of products.
The global bio-pesticide market which is estimated at Mn
672 $ currently is expected to grow to Mn 1075 $ by 2010.
Together we shine
With our business growing over the years, we have joined
hands with international giants and taken steps for a
brighter future. E.I.D. Parry completed its restructuring
during 2005-06 converting its sanitaryware business into a
joint venture with Roca Sanitario S.A. Through its
subsidiaries Coromandel Fertilisers Ltd. (CFL) and
Godavari Fertilisers and Chemicals Ltd. (GFCL) and JV,
Parryware Roca Private Limited, it retains a significant
presence in the fertiliser and sanitaryware businesses
respectively.

The Company also entered into a Joint Venture Agreement

with Cargill Asia Pacific Holdings PTE Limited, a wholly
owned subsidiary of Cargill International, to form Silkroad
Sugar Private Limited. The JV will set up a stand alone
sugar refinery at Kakinada, Andhra Pradesh.

Parry Nutraceuticals Limited, which has global presence,

was merged with E.I.D Parry during the year.

So, E.I.D. Parry is profiting from its attitude. Over the years
its investments made towards the maximum value extraction
from the cane, are coming good. The flexibility in its
processes to manufacture a more profitable product mix is
adding to its strength. The company has leveraged its
presence in other categories such as fertilisers and
sanitaryware to hive them off into mighty stand-alone
entities that are highly profitable market leaders. By
entering the lucrative segments such as Bio-Farm-inputs
and Nutraceuticals, the company is blazing a trail in the
Hi-profit Hi-growth sectors of international business.
While in the short term, relief measures are being
implemented by the Government to provide relief to the
sugar industry to bring back stability of sugar prices, the
long-term outlook for sugar remains positive and promising.
Despite challenges, E.I.D. Parry is optimistic that it will
undoubtedly benefit its stakeholders in future by identifying
opportunities lying beyond challenges and creating value
out of them.
Contents
Financial Highlights | 1
Corporate Information | 2
Directors’ Report | 3
Management Discussion and Analysis Report | 10
Report on Corporate Governance | 23
General Shareholder Information | 30
Financials - E.I.D.-Parry (India) Limited | 35
Consolidated Financials | 62
 E.I.D.-PARRY (INDIA) LIMITED

FINANCIAL HIGHLIGHTS - TEN YEARS AT A GLANCE

Rs. Lakhs

1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Profitability Items
Gross Income 92387 98858 113465 136658 152713 137636 64145 81913 103044 73869

Gross Profit (PBDIT) 11163 14324 14502 15646 15513 11487 9119 15893 17766 20109

Depreciation 3085 3750 3552 4187 4369 4502 3037 2817 2915 3287

PBIT 8078 10574 10950 11459 11144 6985 6082 13076 14851 16822

Interest 3780 5512 4910 6585 5278 3282 753 350 739 (211)

PBT 4298 5062 6040 4874 5866 3703 5329 12726 14112 17033

Tax 440 350 650 410 2383 1020 1006 2300 2528 4291

PAT 3858 4712 5390 4464 3483 2683 4323 10426 11584 12742

Balance Sheet Items

Net Fixed Assets 46150 46959 47557 52098 50621 47978 29428 31460 33322 48256

Investments 9469 9371 10565 7695 7689 7663 11011 10126 11167 11736

Net Current Assets 19773 22280 24545 31751 25863 24803 19420 22680 33131 35616

Total Capital Employed 75392 78610 82667 91544 84173 80444 59859 64266 77620 95608

Shareholders Funds 35122 37924 40538 40808 37384 38573 32877 40850 47939 53005

Borrowings 40270 40686 42129 50736 39107 33469 22160 18340 24880 35236

Deferred Tax Liability 7682 8402 4822 5076 4801 7367

Total 75392 78610 82667 91544 84173 80444 59859 64266 77620 95608

Ratios

Book Value Per Share 188 198 219 228 209 216 184 234 54 60

EPS 20.37 24.78 28.65 24.72 19.48 15.03 24.22 58.41 12.98 14.28

Dividend on Equity % 50 60 70 70 70 60 70 125 225 295

Notes:
1. The Farm Inputs Division was demerged into Coromandel Fertilisers Limited with effect from April 1, 2003.
2. The equity shares of Rs. 10 each were subdivided into shares of Rs. 2 each with effect from June 3, 2005.
3. The Parryware Division was transferred on March 1, 2006 to Parryware Roca Private Limited (formerly Parryware Glamourooms Private Limited,
a wholly owned subsidiary).
4. Parry Nutraceuticals Ltd. was merged effective 1st September, 2006.

directors 07.pmd 1 7/9/2007, 2:20 PM

 E.I.D. - PARRY (INDIA) LIMITED

CORPORATE INFORMATION

Board of Directors Corporate Management Team Registered Office

A. Vellayan ‘Dare House’
P. Rama Babu
Chairman Parrys Corner
Managing Director
Chennai – 600 001
P. Rama Babu K. Raghunandan
Managing Director President (Sugar)
Auditors
K. Ravindran Deloitte Haskins & Sells
Anand Narain Bhatia Senior Vice President - Operations (Sugar) Chartered Accountants
Chennai
Sebastian K. Thomas
S. B. Mathur
Chief Executive (Nutraceuticals)
Bankers
R. A. Savoor D. Kumaraswamy
Chief Financial Officer State Bank of India

M. M. Venkatachalam G. Jalaja
Vice President & Company Secretary
S. Viswanathan

directors 07.pmd 2 7/9/2007, 2:20 PM

DIRECTORS’ REPORT
Your Directors have pleasure in presenting their Report together with the audited the Profit Before Interest and Depreciation was Rs.8297 lakhs, Profit Before
accounts for the financial year ended 31st March, 2007. Tax was Rs.5221 lakhs and the Profit After Tax (PAT) was Rs. 3570 lakhs.

The performance highlights of the Company for the year are summarised below: SUGAR
FINANCIAL RESULTS With a bumper sugarcane crop and increased crushing capacities, sugar
Rs Lakhs production in India has recovered in a short span of time to record levels resulting
2006-2007 2005-2006 in high inventory build up. Further with untimely government intervention by
banning exports of sugar, realisation has fallen sharply. Recent sugar price fall
Income from Operations 70718 97816
below cost of production has forced Government of India to review sugar industry
Profit Before Interest and Depreciation 20109 17766
policy comprehensively and the process is on. Unless both the State and Central
Less : Interest (211) 739 Governments revise the policy realistically in terms of cane price, taxes thereon
Depreciation 3287 2915 and export of Sugar and price and movement of Molasses and Ethanol this
Profit Before Tax 17033 14112 industry will be ruined.The country will face large cane payment arrears with
Provision for Tax : consequent effect on the fortunes of farmers. Please refer to details provided
- Current (Net of MAT Credit) 1619 2650 in Management Discussion and Analysis report.
- Deferred 2615 (275) The steep decline in sugar prices in the second half has restricted the revenue
- Fringe Benefit Tax 57 153 growth to about 22% over the previous fiscal while the operating profits has
Profit After Tax 12742 11584 come down by about 61%. However co-generation facilities and distillery
contributed to the bottom-line significantly.
Add : Surplus brought forward 15554 11541
Balance in Profit and Loss Account of The 18 MW co-generation plant commissioned at Pudukottai in March, 2006
Amalgamating Company (1290) 9 got stabilised and become fully operational during the year. The 22 MW
cogeneration power plant at Pugalur commenced commercial operations in
Amount available for Appropriation 27006 23134
March, 2007. The Ethanol and ENA projects at Nellikuppam Distillery is in
APPROPRIATIONS progress and awaiting final clearance for operations from statutory authorities.
Transfer to General Reserve 3000 3000 The registration of the assets of New Horizon Sugar Mills Ltd., Ariyur,
Dividend on Equity Capital : Puducherry, acquired from Indian Bank under the SARFAESI Act on
24th March, 2005 was completed on 24th August, 2006 and the Ariyur Factory
Interim paid 4016 -
commenced operations during December, 2006 and commercial production in
Proposed (Final) 1250 4016
March, 2007.
Dividend Tax 776 564
The long term strategy for the Sugar Division approved by the Board includes
Surplus carried to Balance Sheet 17964 15554
increasing crushing capacities in existing factories, acquisitions, creation of
TOTAL 27006 23134 integrated sugar complexes to extract value from all parts of the cane stick and
derisk the sugar business. These include setting up of a 20 MW co-generation
PERFORMANCE plant at Pettavaittalai and increasing the overall crushing capacity to 22000
The Company achieved a turnover of Rs. 70718 lakhs including other income TCD. On completion of the projects, the annual sugar production would increase
of Rs.15546 lakhs for the year ended 31st March, 2007. The Profit Before Interest to about 6 lakh tonnes, power generation would be 127 MW and distillery
and Depreciation grew by 13% to Rs. 20109 lakhs and the Earning Before Tax capacity would be 200 KLPD.
was up by 21 % to Rs.17033 lakhs. The Profit After Tax (PAT) was
Rs. 12742 lakhs (10%) compared to that of last year amounting to JOINT VENTURE WITH CARGILL ASIA PACIFIC HOLDINGS
Rs. 11584 lakhs. The profit for the year includes Rs.11812 lakhs representing PTE LIMITED
income of a non recurring nature compared to Rs.2285 lakhs in previous year. The Company entered into a Joint Venture Agreement with Cargill Asia Pacific
Excluding this income (Rs.11812 lakhs) and the tax thereon (Rs.2640 lakhs) Holdings PTE Limited (Cargill), a wholly owned subsidiary of Cargill

3
 E.I.D. - PARRY (INDIA) LIMITED
International, on 8th December, 2006. Consequent to this, the parties have
made an initial subscription to the share capital of Parrys Sugars Refineries
Private Ltd.(name since changed to Silkroad Sugar Private Limited). This
company will set up a stand alone sugar refinery in Kakinada. Your Company
holds 50% of the equity capital in this Joint Venture.
BIO PESTICIDES
The Bio Pesticides division of the Company has emerged as a significant
supplier in the Neem based bio-pesticide business and continues to focus on
its core product - the NEEMAZAL® range of products. The division is
concentrating on development of new products like formulation for combined
fungicide and insecticide activity.
The Division clocked a revenue of Rs.2261 lakhs. Export revenues registered
a growth of 13% over the previous year, with Americas and Europe continuing
to be the major markets. With the launch of AVANA, a neem based bio pesticide
granule, the Company is looking forward to gain position in Sugarcane and
Rice in domestic market.
NUTRACEUTICALS
Parry Nutraceuticals Limited (PNL) became a wholly owned subsidiary during
the year.
Your Board considered it desirable to amalgamate PNL with the Company
with effect from 1st September, 2006 and accordingly approved a Scheme of
Amalgamation between PNL and EID at the Board meeting held on
19th October, 2006.
Based on the petition filed by PNL with the Hon’ble High Court of Judicature at
Madras under Sections 391 to 394 of the Companies Act, 1956 for sanctioning
the Scheme of Amalgamation, the Hon’ble High Court vide its order dated
17th April, 2007 has approved the Scheme of Amalgamation as well as dissolved
PNL without the process of winding up.
Nutraceuticals is now functioning as a Division of the Company.
The products of Nutraceuticals Division are currently exported to 35 countries
in the world which continued to grow in all the markets serviced by it. Organic
Spirulina, the main product of this business continues to outperform
competition in its segment. In the current year the division made inroads into
New Zealand selling Organic Spirulina to one of the largest brands of
Nutraceuticals worldwide.
The Organic Spirulina produced by your Company is the most certified Organic
Spirulina in the world with 5 quality certifications and 3 Organic Certifications
to its credit. The Organic Spirulina of the division was certified to meet stringent
standards such as US Pharmacopeia, USDA and Naturland - Germany.
For the 7 months period ended 31st March, 2007, the division registered a
turnover of Rs.1112 lakhs.
4
The performance of the various divisions during the year 2006-07 is given in
detail in the Management Discussion and Analysis Report forming a part of
this report.
DIVIDEND
Considering the one time profit of Rs.118.12 crore being profit on sale of shares
of Parryware Glamourooms Private Ltd. to Roca Sanitario S.A., your Directors
declared a special interim dividend of Rs.4.50 (225%) per equity share of
Rs.2/- each fully paid up, for the year ended 31st March, 2007 and the same
was paid during August 2006.
Your Directors are pleased to recommend a final dividend of Rs. 1.40 (70 %)
per equity share of Rs.2 /- each for the financial year ended 31st March, 2007.
With this the total dividend declared for the year ended 31st March, 2007 is
Rs.5.90 (295%) per equity share of Rs.2/- each.
CORPORATE DEVELOPMENTS
PARRYWARE
On 1st June, 2006 the Company transferred 4,32,580 equity shares of Rs.10
each held by the Company in Parryware Glamourooms Private Limited (PGPL),
in favour of Roca Sanitario S.A. of Spain, (Roca) for a consideration of about
Rs.118.55 crore. The PGPL Board also allotted 6,34,840 equity shares of Rs.10
each of PGPL to Roca on the same day.
Consequent to this PGPL ceased to be a subsidiary of EID with effect from
1st June, 2006 and became a joint venture company in which EID and Roca
hold 50% equal stake in the capital. The name of the Company also has been
changed to Parryware Roca Private Limited.
SUBSIDIARY COMPANIES
Coromandel Fertilisers Limited
Coromandel Fertilisers Limited (CFL) achieved a turnover of Rs.2084.22 crore
for the year ended 31st March, 2007 and the Profit after Tax was Rs.100.74 crore.
The Company’s Board had recommended a dividend of 100 % for the year.
CFL increased its stake in Godavari Fertilisers & Chemicals Limited (GFCL)
from 45.07% to 74.92% and consequently GFCL became a subsidiary of CFL
with effect from 12th April, 2007.
Parry Chemicals Limited
Parry Chemicals Limited, a 100% subsidiary of CFL, achieved a turnover of
Rs. 85.35 lakhs for the year ended 31st March, 2007. The Profit after Tax was
Rs.0.48 lakhs. With the surplus of Rs. 74.64 lakhs brought forward, the balance
of Rs.75.12 lakhs was carried to Balance Sheet.
Parrys Sugar Limited
During the first year of operations, the Company’s turnover was Rs.11.15 lakhs
and the Profit after Tax was Rs. 9.66 lakhs.
Parry Infrastructure Company Private Limited
The Company incorporated in January, 2006 to engage in infrastructure projects
like development of Special Economic Zones (“SEZ”), etc. became a wholly
owned subsidiary during the year. The Company proposes to promote a food
processing SEZ and is taking necessary steps for implementation of this.
Parry America Inc.
Parry America Inc, the 100% subsidiary based in US, reported an income of
US$ 32.20 lakhs for the year ended 31st March, 2007. The Profit After Tax was
US$ 0.94 lakhs. After adjusting the carried forward loss of US$ 0.73 lakhs, the
profit carried forward for the year was US$ 0.21 lakhs.
The main business of this Company is to market and sell NeemAzal Technical
in US markets and trading of technical and formulations in Western Countries.
Parrys Investments Limited
The Company has reported a business income of Rs.1.38 lakhs and made a
Net Profit after Tax of Rs. 1.03 lakhs for the year ended 31st March, 2007.
Coromandel Bathware Limited
There was no operation during the year and the loss carried forward for the
year was Rs. 193.36 lakhs.
SUBSIDIARY ACCOUNTS
In terms of the approval granted by the Central Government u/s 212 (8) of
the Companies Act, 1956, copies of the Balance Sheet, Profit & Loss Account,
Reports of the Board and the Auditors of all the Subsidiary Companies have
not been attached to the Balance Sheet of the Company as at 31st March,
2007. However as directed by the Central Government, the financial data of
the subsidiaries have been separately furnished forming part of the Annual
Report. These documents will also be available for inspection at the
Registered Office of the Company and the concerned subsidiary companies,
during working hours up to the date of the Annual General Meeting. However,
the related detailed information of the Annual Accounts of the Subsidiary
Companies will be made available to the Holding and Subsidiary Companies’
investors seeking such information at any point of time. The Annual Accounts
of the Subsidiary Companies will also be kept for inspection by the investors
at the Registered Office of the Company and that of the Subsidiary Companies
concerned.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared by the
Company in accordance with the applicable Accounting Standards (AS-
21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of
India and the same together with Auditors’ Report thereon form part of the
Annual Report.
5
DIRECTORS
Mr. S.M.Datta, Chairman, retired at the Annual General Meeting held on
19th July, 2006 and Mr.A.Vellayan took over as Chairman.
IDBI withdrew the nomination of Mr.Biswajit Choudhuri with effect from
19th July, 2006.
Mr.V.Thyagarajan, resigned from the Board with effect from 19th March, 2007.
The Board places on record its grateful appreciation of the guidance provided,
services rendered and valuable contributions made by Mr.S.M.Datta as the
Chairman of the Board as well as the Chairman of the Audit Committee and
Remuneration and Nomination Committee of the Board, by Mr.Biswajit
Choudhuri and Mr.V.Thyagarajan as Directors and members of the Audit
Committee of the Board during their respective tenure.
Mr.A.Vellayan, Chairman and Mr.S.Viswanathan, Director retire by rotation in
terms of Articles 102 and 103 of the Articles of Association of the Company and
being eligible, offer themselves for re-appointment. A brief resume, expertise
and details of other directorships of these Directors is attached along with the
Notice of the ensuing Annual General Meeting.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a
Management Discussion and Analysis Report, Corporate Governance Report
and Auditors’ Certificate regarding compliance of conditions of Corporate
Governance are made a part of the Annual Report.
Mr.P.Rama Babu, Managing Director and Mr.D.Kumaraswamy, Chief Financial
Officer, have given a certificate to the Board as contemplated in
Clause 49 of the Listing Agreement .
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 205C of the Companies Act, 1956, an amount of
Rs. 10.64 lakhs being unclaimed dividend, interest on fixed deposit, interest
on debentures, unclaimed deposits etc. was transferred during the year to
the Investor Education and Protection Fund established by the Central
Government.
DEPOSITS
14 deposits totalling to Rs. 1.26 lakhs due for repayment on or before
31 st March, 2007 were not claimed by the Depositors on that date. Efforts
are being made to contact all such deposit holders to facilitate the refund
to them. The Company has discontinued acceptance of deposits since
July 2003.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm
that, to the best of their knowledge and belief :
 E.I.D. - PARRY (INDIA) LIMITED
• in the preparation of the Profit & Loss Account for the financial year ended
31st March, 2007 and the Balance Sheet as at that date (“financial
statements”), applicable Accounting Standards have been followed;
• appropriate accounting policies have been selected and applied
consistently and such judgements and estimates that are reasonable
and prudent have been made so as to give a true and fair view of the
state of affairs of the Company as at the end of the financial year and of
the profit of the Company for that period;
• proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities. To ensure this, the Company
has established internal control systems, consistent with its size and
nature of operations. In weighing the assurance provided by any such
system of internal controls its inherent limitations should be recognised.
These systems are reviewed and updated on an ongoing basis. Periodic
internal audits are conducted to provide reasonable assurance of
compliance with these systems. The Audit Committee meets at regular
intervals to review the internal audit function;
• the financial statements have been prepared on a going concern basis.
AUDITORS
M/s. Deloitte, Haskins & Sells, Chartered Accountants, Chennai, the Company’s
Auditors, retire at the conclusion of the forthcoming Annual General Meeting
and are eligible for re-appointment.
The Board, on the recommendation of the Audit Committee, has proposed
that M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai be
re-appointed as the Statutory Auditors of the Company and to hold office till the
6
conclusion of the next Annual General Meeting of the Company. M/s. Deloitte
Haskins & Sells, Chartered Accountants, Chennai have forwarded their
certificate to the Company, stating that their re-appointment, if made, will be
within the limit specified in that behalf in Sub-section (1B) of Section 224 of the
Companies Act, 1956.
COST AUDITOR
The Company received the approval of the Central Government for appointment
of Mr.D.Narayanan as Cost Auditor to conduct the cost audits for the financial
year 2006-07.
PARTICULARS OF EMPLOYEES
Under the provisions of Section 217 (2A) of the Companies Act, 1956 read with
Companies (Particulars of Employees) Rules, 1975 as amended, the names
and other particulars of employees are set out in the Annexure to the Directors’
Report.
ACKNOWLEDGEMENT
The Directors thank the customers, suppliers, farmers, financial institutions,
banks and shareholders for their continued support and also recognise the
contribution made by the employees to the Company’s progress during the
year under review.
On behalf of the Board
Chennai A VELLAYAN
May 4, 2007 Chairman
Information under Section 217 (1) (e) of the Companies Act,1956 read with the Companies (Disclosure of
particulars in the Report of Board of Directors), Rules, 1988 and forming part of the Directors’ Report

I. CONSERVATION OF ENERGY II. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. At the Nellikuppam sugar unit for driving belt conveyor the dyno drive 1. The concept of cooling in preservation of perishable food product was
coupled with 50 HP induction motor was replaced with a variable extended to Spirulina slurry before spray drying. Overall cooling blanket
frequency drive which apart from saving energy has led to increased extended in all areas of slurry contact/storage, designed and implemented
throughput . in house. Benefits were on improved organoleptic and physical
characteristics of the final spray dried powder. A product improvement that
2. The 22 MW co-generation power plant at Pugalur commenced commercial
is critical in application where Organic Spirulina powder is used in green
operations in March, 2007.
foods/drinks.
3. Replacement of Aluminium blades by FRP (light weight) blades in the III. During the year towards Research and Development activities in the
cooling tower resulted in power saving cost at Thyagavalli Bio-products various divisions an amount of Rs. 4.23 crore has been incurred on
unit. account of revenue expenditure.
4. At the Oonaiyur nutraceuticals factory, measures like use of IV. FOREIGN EXCHANGE EARNINGS AND OUTGO
variable frequency drives in various motor rotating machinery like Particulars 2006-07
fans, pumps and separators were adopted. This has resulted in Rs.Crore
reduction of energy consumption on the Spray Drier fans and (a) Earnings 33.13
Separators. (b) Outgo 4.75

7
 E.I.D. - PARRY (INDIA) LIMITED

V. ENERGY CONSUMPTION
A. Power & Fuel Consumption

2006-2007 2005-2006
1. ELECTRICITY
(a) Purchased
Units (KWH) 6592667 18721739
Total Amount (Rs. Lakhs) 398 930
Rate per Unit (Rs.) 6.03 4.97
(b) Own Generation
(i) Through Emergency Diesel Generator
Units (KWH) 696055 1255253
Units per ltr. of Diesel Oil 1.91 2.51
Cost per unit ( Rs. ) 11.70 12.91
(ii) Generated Through Steam Turbine
Out of Own Bagasse (KWH) 201981277 160927338
Out of Outside fuel (KWH) 29817000 28231456
2. FURNACE OIL
Qty. (K. Litres) 665 2440
Value (Rs. lakhs) 111 386
Average Rate / K. Ltr. 16665 15799
3. OTHERS/INTERNAL GENERATION
(a) LPG:
Quantity (MT) – 5649*
Total Cost (Rs. Lakhs) – 1621*
Rate per MT / (Rs.) – 28695*
(b) HSD:
Quantity (KL) 115 223
Total Cost (Rs. Lakhs) 40 65
Rate per KL / (Rs.) 34973 29114
* Relates to Parryware Division

B. Consumption per unit of Production

Product (KWH ) Electricity

2006-2007 2005-2006

Sugar Per MT 270.19 246.40

On behalf of the Board

Chennai A. VELLAYAN
May 4, 2007 Chairman

8
Information as per Section 217 (2A) read with the Companies (Particulars of Employees) Rules, 1975 and
forming part of the Directors’ Report - Details of Remuneration paid for the year ended 31st March, 2007

Name/(Age) Designation of Remuneration Qualification/ Date of com- Previous

the employee/ (Experience Years) mencement Employment
Nature of duties Rs. of employment
(1) (2) (3) (4) (5) (6)

(A) EMPLOYED THROUGHOUT THE YEAR ENDED 31ST MARCH 2007 AND WERE IN RECEIPT OF REMUNERATION AGGREGATING NOT LESS THAN RS.24,00,000

D Kumaraswamy(53) Chief Financial Officer 4191419 B.Com., A.C.A., A.C.S.,(30) 07.03.1986 Manager (Finance)
Mechnafab Pvt. Ltd.
Dr.M.C.Gopinathan (52) Director (R&D) 2451492 M.Sc, Phd, M.Phil (24) 01.06.1988 All India Project co-ordinator
University of Delhi

K.Raghunandan (49) President 4869270 M.S., Chem. Engg (26) 11.07.1988 Plant Manager (Urea)
IEL Ltd
C.R.Rajan (55) Executive 4170590 B.Sc.(Hons), MBA(33) 07.05.1993 General Manager
under deputation MMTC of India Limited
P. Rama Babu (59) Managing Director 10282140 M.A. (Social Work & Labour 15.02.1983 Personnel Manager
Welfare) (35) Flender Macneil Gears Ltd.
K.E.Ranganathan (44) Executive 4327289 B.Com, A.C.A., ACS(23) 10.10.1994 Manager ( Fin & Plg)
under deputation TVS Electronics Limited
K. Ravindran (57) Vice President 2793656 M.Sc (Chemistry) (32) 01.01.1976 –
K.N. Radhakrishnan (56) General Manager 2423933 B.Com., A.C.A. (31) 01.03.1995 Navabharat Ferro Alloys Ltd.
Joseph Nathan (51) General Manager 2664606 B.A., B.L., P.G.D.B.A. (26) 02.09.1985 Uttam Reddy & Co. Advocates

G.Jalaja (49) Company Secretary 2499673 B.Com., A.C.A., F.C.S. (23) 05.08.1983 Aicam Engineering Pvt. Ltd.

(B) EMPLOYED FOR PART OF THE YEAR ENDED 31ST MARCH 2007 AND WAS IN RECEIPT OF REMUNERATION AGGREGATING NOT LESS THAN RS.2,00,000 PER MONTH

Dr.Sivaramakrishna Pillai (54) Vice President 2876034 Phd., (28) 19.01.2001 Managing Partner
Gemini Inernational Corporation

Sebastian Thomas (58) Chief Executive 2033579 M.Sc. Botany (33) 01.09.1992 Biogenics, California, USA
( Nutraceuticals)

1. The nature of employment of all employees above is contractual.

2. Remuneration as shown above includes salary, allowances, leave travel assistance, Company’s contribution to Provident Fund, Superannuation Fund
and Gratuity Fund, Medical facilities and perquisites valued in terms of actual expenditure incurred by the Company in providing the benefits to the
employees excepting in case of certain expenses where the actual amount of expenditure cannot be ascertained with reasonable accuracy, and in such
cases, notional amount as per Income-tax Rules has been adopted.
3. None of the employees is related to any Director of the Company.
On behalf of the Board

Chennai A.VELLAYAN
May 4, 2007 Chairman

9
 E.I.D. - PARRY (INDIA) LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS REPORT 2006-07
Review of E.I.D.- Parry’s Business
E.I.D Parry (Parry), completed its restructuring during 2005-06 by entering into
a Joint Venture with Roca Sanitario S.A. for the sanitaryware business to
provide consistent and increasing returns to its shareholders. Parry has now
become a sugar focussed company to become a dominant player in this sector
and is also investing in promising areas like Bio-pesticides and Nutraceuticals.
Through its subsidiaries and JV, viz, Coromandel Fertilisers Ltd. (CFL), Godavari
Fertilisers & Chemicals Ltd. (GFCL) and Parryware Roca Private Ltd. (PRPL),
it retains a significant presence in the fertiliser and the sanitaryware industries
respectively. Parry has all its seven manufacturing facilities located in
Tamil Nadu and Puducherry.
The turnover for the year 2006-07 was Rs. 70718 lakhs (including other income
of Rs. 15546 lakhs) with the distributable profits amounting to Rs. 12742 lakhs.
Sugar
Established : 1842
Revenue 2006-07 : Rs. 556 Crore
Proportion of Companyís total Income : 94%
Background
Parry has relentlessly made efforts to build on its core competencies of being
one of the lowest cost producer of sugar even as it de-risks sugar business by
extracting more value from co-products. Around these competencies, Parry is
now adding and developing new facilities of Cogeneration of Power, Ethanol,
Extra Neutral Alcohol, Refined Sugar etc. This capacity build-up in products
and markets will ensure that the Company is well positioned to exploit the
large opportunities offered by emerging trends in the sugarcane business.
Parry as a Sugar Major
Parry as a focussed entity plans to bring large-scale investments into the Sugar
business by leveraging its existing assets and strengths in this sector in three
broad directions.
Expand existing sugar units capacities
1. The Company is currently in the process of expanding its capacity
from current levels of 16500 TCD to 19500 TCD across its existing
manufacturing locations. These projects are estimated to be fully
operational by the end of 2007-08. This will help in optimising the
crushing period by the increase in throughput , with improvements
in process efficiencies,sugar recovery gains and reduced energy
(steam plus power) consumption. The efficiency norms are being
benchmarked internationally and should make these units very low
cost producers.
10
directors 07.pmd 10
2. The Units are also being designed to offer a wide range of products to
serve broader & more diverse Customer base. The Units with built in
flexibility will also enable making of customised product offerings to
meet key customer accounts.
Value addition of Co-products
1. Cogenerated Power: The growing energy consumption in India allows
the sugar industry to play an increasingly important role in the energy
economy. Additionally, the power generated and exported by the co-
generation unit is environment friendly (ìGreen Powerî) and made
available to rural areas where the mills are located. Thus sugarcane
is increasingly becoming a source of energy. This Cogen power is in
line with Clean Development Mechanism (CDM) methodologies, which
are now clearly defined and carbon credits are expected to flow soon.
2. Molasses and Alcohols: The Company has started adding
manufacturing units to straddle the entire value chain of the Distillery
ñ from Industrial Alcohol and Rectified Spirit to Extra Neutral Alcohol
(ENA) and Fuel Ethanol production. Implementation of Kyoto Protocol
by India requires fuel ethanol blending in petrol (EBP) to becoming a
reality. The Government of India has made 5% blending of Ethanol
with petrol mandatory which is in the process of being implemented
across all States. This proportion is likely to increase to 10% shortly,
which will create further potential for the producers. Tamil Nadu Sugar
Mills have negotiated with Oil Marketing Companies to supply Ethanol
at about Rs.21.50 per litre (ex-factory). The industry is also discussing
with the Government to link ethanol prices to the international petroleum
prices. Some operational issues are also being worked with the
Government including considering a policy change to take
administrative control of Molasses and Alcohol movements etc., to
the Centre as India needs to implement Kyoto Protocol as a nation.
Future opportunities
The Company will continue to keep exploring the possibilities for growth through
Green field and also acquisitions. A 2500 TCD mill in Tamil Nadu is under
active consideration and may be commissioned in record time as soon as the
Government approvals are obtained.
GLOBAL PERSPECTIVE
Growth of Sugar sector
Countries' production levels - surplus across major Sugar countries
The global supply response to high prices in the middle of 2005-06 means that
sugar supply has grown faster than sugar demand and this has placed
downward pressure on prices in 2006-07. The production has surpassed
consumption for the first time in past six years.
7/9/2007, 2:20 PM

World is experiencing concurrent peak production by most of the top sugar
producing countries with the exception of European Union (EU). It is noteworthy
that world production has increased by a large 8 MMT in 2006-07.
Exports from Brazil and India, two of the worldís major sugar producing countries,
are forecast to increase more than what was expected previously, as good
seasonal conditions have led to higher production in those countries. In contrast,
the EU is forecast to reduce exports significantly in 2006-07 in order to meet its
obligations to the World Trade Organisation.
The fairer trade practices demanded by WTO, high prices of oil, global warming,
environmental pressure to reduce dependence on fossil fuels and increased
use of renewable energy have been directly and indirectly impacting the Sugar
Business across the world. The two major cane producing countries ñBrazil
and India have responded with large scale investments in Sugarcane industry
(both Sugar Mills and Ethanol Plants). Developed nations as consumers of
petrol and diesel have also responded by kick-starting large investments for
creating a bio-fuels industry. USA has been building a large Ethanol Unit based
on Corn almost every 9 days for 18 months now while EU has been developing
a bio-diesel production and distribution system. Other important developments
in the world Ethanol program include the intended Brazil-US Ethanol agreement
and Brazil-Japan Ethanol talks. All this has fuelled increase in sugarcane, corn
and wheat acreages and prices as land is being used for new end-use of crops
ñ the transport energy sector. A new debate has commenced on Food versus
Fuel as the world attempts to re-align its resources between these two
sectors. All this will have a significant impact on World Sugar availability, price
and trade.
11
directors 07.pmd 11
INDIAN PERSPECTIVE
Current Situation in the Domestic Market
The Global situation has been more or less reflected in India. The rebound of
the cane crop and the enthusiastic response to higher cane prices has resulted
in substantial surplus for the Sugar Season 2006-07. Latest production estimates
are around 27 MMT for this Sugar year against the estimated consumption of
19.5 MMT.
The situation of bumper stock was further aggravated by a Sugar Export ban
effective June 2006 by the Government of India (GOI) (made applicable even
for the mandatory exports under the Advanced Licence Scheme).
As a result, the domestic price of sugar plummeted in the second half of the
year. Simultaneously during this period, the international prices of sugar also
crashed from $ 400 per MT levels to less than $ 320 per MT. The strengthening
of the Indian Rupee further aggravated the sugar exportersí plight. By the time
GOI finally removed the export ban the net realisation was unremunerative.
The present prices both domestic and export is now below manufacturing cost
since cane prices were fixed based on high prices of sugar ruling at early part
of last year. There were imminent possibilities of cane arrears mounting. The
GOI finally accepted the Industryís pleas and agreed to a series of immediate
term measures for stabilising the sugar prices. The GOI has now announced
subsidies at Rs. 1350 per MT (for a Coastal state) to encourage exports. The
Government of India has also announced a creation of Buffer stock of 2 MMT
to ease the pressure on sugar prices.
Meanwhile alarmed by the deteriorating situation on prices, the amount of
standing cane remaining and possibility of arrears in cane payment, major
cane producing State Governments have stepped in with relief measures.
Leading in this effort is Maharashtra state, which has announced an export
subsidy of its own of Rs. 1000 per MT, over and above the Central Government
subsidy besides a slew of other measures. These include a decrease in cane
price for recovery drops for late season crushing and purchase tax waiver for
the entire season, insurance payment of Rs. 25,000 per acre of standing crop
on arrival of monsoon etc. Karnataka has followed with similar relief packages
7/9/2007, 2:20 PM
 E.I.D. - PARRY (INDIA) LIMITED
and Andhra Pradesh and Madhya Pradesh are expected to follow. Tamil Nadu
has so far not taken any action to help the mills in the state.
The Way Ahead for Indian Sugar Industry
The policy changes on exports represented a dramatic turnaround in the
Government position but was as usual, only reactive, rather than proactive.
The situation in exports swung through a full cycle of no exports to one of
restrained exports (only ALS obligations) to a export ban and to free exports,
all within one year. This flip-flop has hurt Indiaís reputation, as a sugar exporter,
in the world trade circles and markets.
Even as major policies are being modified on an ad-hoc basis, a plethora of
controls and administrative measures by the Central and State Governments
continue to impact the industry and its overall performance on account of
unresolved contradictions and decision based on political considerations. These
include:
1. Release Order Mechanism: This measure was designed to manage stocks
and prices during times of scarcity and food insecurity. It has lost its relevance in
the current context of assured abundance. It has also become ineffective due to
the ability of the mills to sell above the release orders through court orders.
2. Reacting to prices in domestic Market by Banning Exports: It must be
noted that only 10% of sugar is now required by the Below Poverty Line
consumers with the balance being sold as Free Sale Quota. More than 2/3rd of
this is consumed by Processed Food and Beverages sector. Thus, the Govtís
role to ìcontrolî prices seems more a concern to manage WPI since Sugar
retains a very high (and unduly so) weightage in this Index.
3. Cane Pricing: Cane pricing is at both the State (State Advised Prices- SAPs)
and Central (Statutory Minimum Price- SMP) Governments level. The State
Governments announce cane prices without any way of linking it to Sugar
prices. There needs to be a proper linkage between cane price and sugar price
realisations.
4. Fuel ethanol industry is emerging and its policy framework is just
evolving: It is necessary that a fair and progressive framework is evolved to
encourage further investments into the sector. In fact, it is this sector that plays
a larger role in energy security and economic development of the country.
There appears to be conflict of interest between State and Central Govt. in the
area of revenue generated by this sector. While Alcohol sold to Potable Liquor
is excisable by State and forms an important revenue source, Alcohol used to
convert into Ethanol is a revenue for Centre. Thus for the nationís larger cause,
the Central and State Governments need to develop a clear path for Ethanol.
These contradictions have to be resolved soon. All controls on this industry must
be removed and Central Government must play a role only to manage strategic
12
directors 07.pmd 12
reserve stock to allay its concern on sugar availability and prices in ration shops.
As a country we need to take a long term view of sugar exports to carve out a
credible and sustainable share in the world sugar trade. The Indian sugar
industry has demonstrated its ability to keep up supplies even in the drought
years and the bogey of food security should not be used to restrain the industry.
Tamil Nadu - a Comparative Advantage assessment
Over 85% of Indian Sugar production is concentrated in and around five states
ñ UP, Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh.
Tamil Nadu (TN) has several specific advantages which are as follows:-
● Favourable agro climatic conditions and a two monsoons system
leading to longer availability of cane. Thus several mills in TN crush
for about 270 days as against the other states average of about 160
days. The longer crushing season also provides for a profitable
investment in cogeneration which further increases the overall
profitability of operation in TN.
● The sugarcane yield per hectare is significantly higher compared to
the other states and this helps in ensuring higher availability of cane
at an optimal cost as well as sustained farmersí interest in the crop.
● Two good ports in the State provide easy access to the export market
especially, South and South East Asia.
● Good infrastructure including linking roads, agri-credit through Banks,
power supply for irrigation etc.
● Progressive farmers and a strong R&D support from the Sugarcane
Breeding Institute, Tamil Nadu Agricultural University at Coimbatore.
However, the long crushing season is partially offset by low recovery period of
crushing and the distance from sugar deficit markets of India (except Kerala)
and high purchase tax on cane neutralises the above advantages thus
decreasing our competitiveness.
Movement of surplus molasses out of Tamil Nadu to other deficit states and
export is subject to several administrative controls besides payment of export
administrative service fee. On account of this, the producers in Tamil Nadu are
unable to realise better prices at the opportune time.
Current Situation of the State
Tamil Nadu is expected to produce a record high of 2.5 MMT of sugar this year
ñ a substantial jump from the previous year production of 2.17 MMT. Coming in
along with the national surplus, the pressure on prices is felt acutely here too.
SISMA has represented to the State Government for relief measures similar to
that offered by other states, and is awaiting response.
7/9/2007, 2:20 PM
 EID Parry (India) Ltd.
Sugar Daily Price
Performance review 1st April 2003 to 31st March 2007
Execution of the Growth and de-risking strategy:-
1. The companyís fifth sugar plant at Puducherry has commenced
operations and achieved the rated production capacity within a short
period of time. The projects to increase throughputs in the four sugar
units in Tamil Nadu are progressing well and the capacity is likely to
be increased to 19500 TCD by the year end. The Company is also
planning another green-field unit in Tamil Nadu to be completed in
record time to increase the overall capacity to 22000 TCD.
2. The 22 MW Cogeneration unit has been commissioned in Pugalur.
This, in addition to the existing two units with a total capacity of 43
MW is a 50 % increase in cogeneration capacity. Another cogeneration
plant is currently under construction in Pettavaittalai and will be
commissioned by the year end.
3. The existing Distillery at Nellikuppam is being converted into a multi-
product unit with ENA and Ethanol production facilities. The Unit is
also likely to be expanded and with two more distilleries planned, the
Company will be able to value-add all the Molasses it produces
(currently only 1/3rd).
The Company crushed 41.95 lakh tonnes (25.97) of cane with Y-O-Y growth of
62% with a recovery of 8.93% (8.80%), thus sugar production has increased to
3.81 LMT (3.05). The Company continued to make substantial revenues from
co-products, its export to grid were at 1630 lakh units (943) with a Y-O-Y growth
of 73%.

Sugar Score Card

(Rs. Lakhs)
2003-04 2004-05 2005-06 2006-07

Revenue 41517 55254 72463 55592

EBIDT 5510 8928 9909 5764

EBIT 3458 7012 7967 3080

Capital Employed 33912 34631 40082 51427

ROCE 10% 20% 20% 6%

Significant amount of insulation is provided from Cogen and Distillery operations,

which do not follow the sugar cycles. This is leading to a change in the overall
mix of revenues and profitability of the Sugar Division. The profitability of an
integrated sugar model is thus not dependent solely upon sugar prices.

13

directors 07.pmd 13 7/9/2007, 2:20 PM

 E.I.D. - PARRY (INDIA) LIMITED

(Rs. Lakhs)

Sugar Cogen Distillery Total

2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06
Revenue 48697 67574 5037 2919 1858 1970 55592 72463
EBIDT 1780 8170 2999 1592 985 147 5764 9909
EBIT 221 6815 1929 1052 930 100 3080 7967
Capital Employed 29066 25545 21465 13913 896 624 51427 40082

This change in the product mix lends greater stability and predictability to the level and personal accident at the grower level. Parry organises internet
financial performance of the Company. With the completion of new investments kiosks called ìParrys Cornerî to help the farmers avail cane services
in Co-products, the share of the profitability from Co-products will increase at their doorsteps. Banking services available at their doorstep are
substantially in the coming years and thus de-risking from Sugar cycles. special services offered for better business partnership.

EID Parry - USPs Marketing:

Parry has been able to achieve a position of leadership in Tamil Nadu and also The Company offers now a wider range of Sugar to broader & more diverse
be a player of national importance with the help of several business practices Customer base. Parry also specialises in making tailor-made products to suit
and innovations. These practices span all areas of operations. customer needs. This diversification effort is not restricted only to Sugar, but
Sugarcane: has been further extended to include ENA, Ethanol etc. This allows Company
to extract the inherent & intrinsic value of every part of the stick of Sugarcane.
1. Cane R&D:
a. Parry is the only sugar Company in India to run an exclusive R&D Expansions:
wing and breeding program which has generated several promising Taking forward its expansion plans, the Company has operationalised the newly
new high yielding cane varieties with higher sucrose-content and more acquired Puducherry unit at Ariyur, stabilised Pudukottai Cogeneration Unit,
pest resistance, matching the local soil conditions. commissioned Pugalur Cogeneration unit and is poised for growth in the entire
b. Satellite mapping: Parry is involved in conducting soil survey and segment in coming years.
map the same with the help of satellite imageries by developing farm
land database.
c. Drip irrigation systems: Parry is enabling the farmers to use low
cost drip irrigation system with estimated water savings of about 40%.
With the Tamil Nadu State Govtís recently announced capital subsidies,
the Company expects to increase cane acreage under drip irrigation
to at least 10 %.
2. Cane Development:
a. Extension: Parry gives extensive support to the farmers in managing
their cane through its Cane Extension team. The team has been further
strengthened by employing Agri-graduates from premier universities.
The team works closely with the farmers to help them in better farming
practices, monitoring the crop throughout the year, crop protection
from pests and diseases and increasing the land productivity.
b. Farmer Services: Parry transfers good farm management from lab-
to-land through demos,farmer training sessions for better yield
improvements; offers its cane growers agri credit through Banks and
unique insurance policies covering both the crop at the individual plot

14

directors 07.pmd 14 7/9/2007, 2:20 PM


200
180
40 40
Refinery Joint Venture
E.I.D.-Parry (India) Ltd and Cargill International S.A. have entered into a joint
venture to set up a port-based stand-alone sugar refinery in Kakinada, Andhra
Pradesh. With an ultimate capacity to produce one million tons of refined sugar
per year, this refinery set up in Kakinada will be the largest in the South Asian
region. The joint venture will be setting up the refinery close to the Kakinada
port. The refinery will be a processing operation, importing the entire raw
material, raw sugar, adding value by refining it, and exporting its entire
production. Parry holds 50% in the joint venture.
Risk Management
The Company continues to practise risk management to increase the probability
of the Company achieving its set Goals and Objectives.
And Risk Management, though often called as a Process, it is actually a Practice
in the Organisation.
The following are the major risks associated with the sugar business:
Raw material risk: Sugarcane is the main raw material for sugar and any
disturbance on its timely availability will have a substantial impact on operational
cost. This is likely to be caused by the following reasons:
Climatic conditions: The crop and availability of cane in TN is influenced
by both the monsoon (South-West and North-East). Local weather
conditions over the crop cycle affects both the quantity and quality of cane
available.
Cane Economics: The profitability of alternative crops will influence the
area of planting under cane; pests and disease and availability of farm
labour also impact the cost incurred by the cane grower.
15
directors 07.pmd 15
Mitigation Measure: The Company has always maintained an amicable
relationship with its farmers. It has paid up all dues on time, despite the
arrears having been on the rise in the industry as a whole. With its goodwill
and the time tested policy of ethical dealings, the Companyís risk of a raw
material short supply will be mitigated with the farmers in the addressable
area continuing to plant sugar cane. Further, with experiments in farm
mechanisation, drip irrigation, improved cane varieties (developed through
the Research and Development facility), carefully monitored scheduling of
cane planting and harvesting, the Company is confident of mitigating
the risk.
Policy risk: The policies on cane are regulated by both the Central and State
Government and they currently have a considerable hold on this industry by
being able to fix the raw material price and to influence the sugar selling price.
Further the control of the Governments (State and Central) include:-
Exports (Permission / incentives)
Imports ( Permission/tariffs)
Sugar pricing (Release orders and Levy)
Command Area demarcation from time to time
Molasses movement control
Mitigation Measure: The Company works closely with ISMA and SISMA
towards developing an industry point of view and appropriate policy
recommendations to have dialogue with the Government. These include
formulation of policy on Ethanol doping, review of cogeneration policy,
Decontrol of Sugar, review of sugar weightage in WPI etc.
Price risk: The cyclicality of Sugar business does have a final call on the
sugar prices and thus affecting profitability.
Mitigation Measure: The company has taken the following measures to
insulate itself against the price risk by two ways ñ
1. Focusing on value added products like Pharma grade refined sugar,
high quality plantation white sugar and retail packs to derive a better
margin.
2. Direct supplies to large Institutions and retail chains.
Outlook summary:
Indian sugar industry is going through a very critical phase where within a
short period of time the situation has turned from one of ìshort supply and high
pricesî to one of ìexcess supply and low pricesî. While part of this is due to
Government interventions, some of them are due to increased alignment with
world scenario.
While in the short term, relief measures have been announced to bring back
stability of sugar prices, the long term outlook for sugar remains positive and
promising for the following reasons:-
ï Growing demand for sugar especially internal consumption led strong GDP
growth and changing food habits
ï Opportunity from Fuel Ethanol blending program
7/9/2007, 2:20 PM
 E.I.D. - PARRY (INDIA) LIMITED

Financial Performance
(Rs. Lakhs)
Details 2004-05 2005-06 2006-07
Revenue 2026 2566 2627
EBIDT 521 629 519
EBIT 389 421 293
Capital employed 2206 3242 3720
ROCE 18% 13% 8%
The Bio Pesticides division of the Company has emerged as a significant
supplier in the Neem based bio-pesticide business and continues to focus on
its core product - the NEEMAZAL® range of products.

ï Opportunity from Cogeneration of Power Industry Scenario and Development

ï Opportunities for India to become a structural Sugar exporter and participate
in the South Asian Sugar market provided an enabling conducive policy
framework is put in place by GOI
ï Important developments in the World Ethanol program and its impact on
World Sugar availability.
The Global Bio pesticide market is estimated at Mn. 672 $ accounting for 2% of
global pesticide sale with the remaining 98% being markets for Synthetic
pesticides.
Neem based bio pesticides come under the category of ëPlant extractsí based
bio pesticides which accounts for Mn.60 $. The sale of Aza based products is
valued to be Mn. 25 $.

Bio Products By 2010, Global Bio pesticide is estimated to grow to Mn 1075 $ at a CAGR of
10%. On these growth projections, the Plant Extracts business will be at
A. Bio Pesticides Mn.160 $ and the business for Aza based products will be at Mn. 67 $.

Established : 1994 The Bio pesticide market is distributed in Americas (45%), Europe (35%) and
rest of the world (20%). Asia offers the highest growth potential because of the
Revenue, 2006-07 : Rs.26 Crore size of the prospective market.
Proportion of Companyís total Income : 4% Performance
Exports : Rs 18 Crore Export Sales and Revenues registered a growth over the previous year, with
America and Europe continuing to be the major markets. China and Korea
registered sales as planned.
Highlights 2006-07
During the year, Sales in the domestic markets did not grow due to
ï AVANA - Neem based bio pesticide granule was launched successfully
unfavourable seasonal conditions and change in Sales and Distribution Model
for controlling pests in the Sugarcane and Paddy in the domestic
from Trade Channel to Institution. This one time correction of shifting to
market.
Institutional model coupled with the season failure has resulted in reduced
ï With new registrations, export sales opened up in the markets like Columbia, sales in the Domestic markets.
Brazil, Korea and Australia. During the year, Thyagavalli unit reached a landmark of achieving 1000 kg production
ï Parry America Inc., wholly owned subsidiary of Parry, is taking all efforts in a month demonstrating the potential to reach the name plate capacity.
to establish significant presence in the Home & Gardens segment in Operating Results
America. Sales 2004-05 2005-06 2006-07
100% Technical (Kgs)
Divisional Performance ñ Domestic 1478 1464 716
ï Revenue at Rs.26 Crores & Aza Technical sales volumes at 4 MT remained ñ Exports 2320 2868 3212
more or less at the last year's level. Total 3798 4332 3928

16

directors 07.pmd 16 7/9/2007, 2:20 PM

 Risks The Organic Spirulina produced by your Company is the most certified Organic
a) Significant changes in climatic conditions resulting changes in cropping Spirulina in the world with 5 quality certifications and 3 Organic Certifications
pattern in the addressable markets are likely to affect the sale of the to its credit. The Organic Spirulina of the division was certified to meet stringent
Companyís products. standards such as US Pharmacopeia, USDA and Naturland - Germany.
b) A steady increase in the price of neem seeds is eroding the product
Nutraceuticals division
contribution and profitability.
c) With 70% of the current revenues coming in from the exports business, Business Established : March 2000
adverse exchange rates of the Rupee with US Dollar will impact on the Merged with EID Parry : 1st Sep 2006
profitability of the Division.
Revenues from 1st Sep 06 to 31st Mar 07 : Rs 11.12 Crore

Managing the risks Proportion of Company's total Income : 2%

a) The division operates in diversified markets across the world, which Exports : Rs 9.07 Crore
facilitates the management of the risks associated with climatic conditions.
Highlights 2006-07
b) Sourcing the Neem seeds in different grades from different States spread
During the year, two new strains of Algae were successfully experimented in
over a longer period of time will partly control the neem seed prices. Parry
small scale for commercial production of Omega 3 EPA and DHA. Additional
would also de-risk the cost partially by realising better values from sale of
ponds have been built to expand and commence limited commercial production.
by-products.
The products from these Algae would cater to heart health and brain health
c) Exchange fluctuations will be managed by taking Exchange cover at and is expected to hit the market in the 2nd half of the FY 2007-08.
appropriate time. The business operates in multiple markets with multiple
currencies thereby minimising the impact of exchange fluctuations. Financial Performance
Outlook (Rs. Lakhs)
The Division is operating in the ëPlant Extractsí segment of Bio pesticide industry, Details 2006-07 (7 months)
which is projected to grow to Mn.160 $ by 2010. The demand for organic and Revenue 1112
residue free food is continuing to grow worldwide. The Companyís products
EBIDT 171
command a premium over its competitors, both in the domestic and export
markets. EBIT 130
The Division is constantly working through its R&D team to continuously come Capital employed 2403
out with totally new and modified products. This will facilitate the business to ROCE 5%
address the growing and diversified customer requirements across the global
markets. Industry Scenario and Development

Going forward, the divisionís prospects are expected to be on the growth
path.
B. Nutraceuticals
Parry Nutraceuticals Ltd. merged with Parry effective 1st September, 2006 and
is currently functioning as a division of your Company.
The Nutraceuticals division clocked a turnover of Rs. 1112 lakhs for the 7 months
period ended 31st March, 2007. The products of this business continued to
grow in all the markets and is currently exported to 35 countries. Organic
Spirulina, the main product of this business continue to outperform competition
in its segment. In the current year the Company made inroads into New Zealand
by selling Organic Spirulina to one of the largest brands of Nutraceuticals
worldwide. The Company also got the prestigious account of Cosway, Malaysia
for its Organic Spirulina.
The size of the global Nutraceutical industry is estimated well over US $ 15
billion per annum growing at 10% per annum. With increasing medical care
costs and aging population in the west, Nutraceuticals as a category of
preventive health care is bound to grow at a steady pace. Within the category,
the Microalgal segment estimated at US $ 300 million and is growing at 7-8 %
per annum covering Spirulina, Carotenoids like beta carotene, Astaxanthin and
the fast growing omega 3 fatty acids.
The Nutraceutical industry is increasingly being regulated world wide for
standardisation and product claims. Much money is being spent by leading
players in the Nutraceutical industry establishing product claims through clinical
studies. There is also a clear trend of Nutraceutical integrating with food and
thereby establishing a fast growing segment called Functional foods.
The Division currently produces 3 different types of microalgae ñ Organic
Spirulina, Dunaliella (Natural Mixed Carotenoids) and Haematococcus
(Astaxanthin) at its Oonaiyur facility. The Company is also developing

17

directors 07.pmd 17 7/9/2007, 2:20 PM

 E.I.D. - PARRY (INDIA) LIMITED
technologies for the production of Omega 3 fatty acids EPA and DHA from 2
new strains of microalgae.
Performance
The Division has emerged as a global leader in Organic Spirulina business
and is continuing with its R&D efforts to research new strains of algae to widen
its product basket.
During 2006-07, the acceptance of the Companyís products continued to grow
in all the markets serviced by it.
Risks
Since 82% of the current revenue is from exports, adverse fluctuation in dollar
prices will impact the revenues of the division.
The microalgae production is weather dependant and changes in
weather patterns will have an adverse impact in productivity and cost
of production.
Managing the risks
Exchange fluctuations will be managed by taking Exchange cover at
appropriate time.
The business operates in multiple markets with multiple currencies thereby
minimising the impact of exchange fluctuations.
Operation of multiple algae varieties requiring differing weather conditions will
provide us opportunities to minimise impact due to changes in weather patterns.
Outlook
The Nutraceutical industry is set to play a significant role in managing increasing
health care costs and improving the quality of life in aging population world
wide, with increasing shift in customer preferences to natural alternate
ingredients to synthetic components with emphasis on disease prevention rather
than disease treatment. The Company is set to participate in a very significant
segment of Omega 3 fatty acids which is currently the fastest growing segment
backed by scientific claims and studies. The Food Safety and Standards Bill
2006 will trigger the growth of this nascent industry in India.
Internal Control and Systems
Internal control and proper systems are essential to ensure efficient
functioning of the operations of the Company. Companyís growth and
profitability can get affected by inadequate and weak internal controls and
processes. The Company is conscious of the importance of internal processes
and controls and has thereby set up a robust business planning and review
mechanism.
The Company has established a system of internal control across all its business
operations. The Board, Audit Committee and the Management ensure that the
18
directors 07.pmd 18
internal control system operates effectively in the organisation. The Companyís
well established Enterprise Resource Planning (ERP) system helps in
continuously monitoring the adequacy and effectiveness of the internal control
across the various businesses and the status of compliance with operating
systems, internal policies and regulatory requirements. Efforts continue to be
directed on securing adequacy and effectiveness of systems and policies that
have been laid down.
In-house Internal Audit team supported by external experts as and when
required, review the adequacy of internal control systems and suggests
necessary checks and balances to increase the effectiveness of the system.
Validation of IT security continues to receive attention of the internal audit team,
which includes IT audit specialists. Further, Internal Audit team carries out
periodic Audits on Assurance, Operations, Technical , Statutory Compliance
and Projects.
The Company views the requirements under the revised listing agreement
regarding internal controls as an opportunity and continues to review its internal
control systems on an ongoing basis.
Information Technology
The Company continues to make investments in Information Technology for
improving the robustness of the business processes. With ERP in place, it
helps in improving the business processes and thereby the internal control
systems. Early warning systems helps the business in ensuring the key
parameters are managed through alerts by fixing threshold limits thereby
ensuring preventive controls.
Besides the above, SAP has in-built controls at the master data, transaction
and configuration level to ensure that transactions are recorded accurately
and interface between all modules are maintained correctly.
During the year, the Company has implemented SAP in its new unit at
Puducherry and in Cogeneration plant at Pugalur. Web Enabled Cane
Procurement and Management System is implemented successfully and has
been functioning well. This will improve controls and also enable quicker services
to Sugarcane growers. Also, Employee Self Service System has been activated
to capture exhaustively all employee related services.
Financial Review
Revenue:
The Company achieved a Gross Turnover of Rs.58323 lakhs as compared to
Rs.97846 lakhs (Rs.74693 lakhs excluding Parryware) in 2005-06.
The drop in Turnover was mainly due to a decline of 30.15% in Sugar sales
volume. But Sales of Power showed a growth of 73% over last year mainly
due to commissioning of Cogeneration plant at Pudukottai (18 MW) in
March, 2006.
7/9/2007, 2:20 PM
 Sales Analysis:
2006-07 2005-06
SEGMENTS Unit Qty Value Realisation Qty Value Realisation
Rs.Lakhs Rs./Unit Rs.Lakhs Rs./Unit

Sugar Tonnes 266306 46740 17551 380833 65212 17124

Alcohol Kilolitres 105 1858 17.70 109 1970 18.11

Power KWH 1630 5037 3.09 943 2919 3.10

Bio Pesticides Kgs 3928 2121 53993 4332 2226 51879

Nutraceuticals 1112

Sanitaryware & Fittings † † † 23153

Others including services 1455 2366 †

Total 58323 97846

Profits: EBIT:
EBIDTA: Operating EBIT was Rs. 5010 lakhs as against Rs. 9604 lakhs of previous
year. The reduction in EBIT was mainly on account of 61% decline in Sugar
The Earnings before Interest, Depreciation, Tax and Amortisation excluding
segment.
One-time Profit on sale of investments was Rs. 8297 lakhs as against
Rs.11958 lakhs (after excluding Parryware business and Profit on sale of
investment) in 2005-06. The drop in sugar profits by 42% mainly contributed
for lower operating EBIDTA during current year.

19

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 E.I.D. - PARRY (INDIA) LIMITED

PAT:
PAT excluding Profit on sale of investment and tax thereon, stood at Rs. 3570
lakhs as against Rs. 9299 lakhs of previous year. Overall PAT has grown by
10 % to Rs.12742 lakhs from Rs.11584 lakhs in 2005-06.

the current assets by Rs.25856 lakhs. Due to the above movements, the net
increase in Net Current Assets was Rs.2485 lakhs.
Rating:
* Previous yearís figure includes Parryware business The Company continues to enjoy AA rating for Long Term Debt and P1+ rating
for short term borrowings from CRISIL and Prime rating from its main banker
Finance Charges:
State Bank of India.
The Company has incurred finance charges of Rs.1629 lakhs for the year
2006-07 as compared to Rs.1234 lakhs in 2005-06. The increase was due to Book Value and Earnings per Share:
higher Working Capital Borrowing and higher rate of interest. Correspondingly, The Book value per share as on 31st March, 2007 was Rs 60.07. The Earnings
the interest income earned in 2006-07 increased to Rs.1840 lakhs as against per share (EPS) for the year was Rs. 14.28 per share. Excluding one-time
Rs.495 lakhs in 2005-06 mainly arising from sale of investments held in profit on sale of investments, EPS was Rs. 4 per share.
Parryware Glamourooms Pvt Ltd. This resulted in a Net Interest income to the
tune of Rs.211 lakhs for 2006-07 as compared to Net Finance charges of
Rs.739 lakhs in 2005-06.
Capital Structure:
The Networth of the company increased from Rs. 48563 lakhs in 2005-06 to
Rs. 53615 lakhs in 2006-07. During the year, adjustment to General Reserve
was carried out to the extent of Rs.35 lakhs (net debit) being the excess of
assets over liabilities after adjusting the cost of investments of the Company
in the amalgamating company while accounting for amalgamation of Parry
Nutraceuticals Limited with the Company and to the extent of Rs.420 lakhs
on account of transitional provision under AS-15 (Revised ) on Employee
benefits.
Working Capital:
The Net Current Assets as on 31st March, 2007 was at Rs. 35616 lakhs as
against Rs.33131 lakhs in 2005-06. There was an increase of Rs.16074 lakhs
in Short term deposits made out of amounts received towards Business Transfer
and Sale of investments of Parryware Glamourooms Pvt Ltd. and an increase
in Inventory by Rs. 15054 lakhs together resulted in increased Current Asset.
However reduction in Trade receivables and Loans and advances brought down

20

directors 07.pmd 20 7/9/2007, 2:20 PM

 Ratio Analysis Risk Management
Key Profitability Ratios Risk is any real or potential event, action or omission, internal or external,
which will reduce the likelihood of the Organisation achieving the defined
Particulars 2006-07 2005-06 objective.
EBIDTA/Total Income 28.44% 18.16% Risk management is the Culture, processes and structures that are directed
PAT/Sales 23.10% 12.51% towards the effective management of adverse effects and potential opportunities
thereby avoiding surprises. Risk management is not a single event or
PAT/ Networth (ROE) 23.77% 23.85%
ìhappeningî. It is the summation of many management practices and actions
that permeate and are inherent in business.
Higher profitability ratios achieved during the year was mainly due to one time
profit on sale of investments in Parryware Roca Private Ltd.(formerly Parryware Risk management involves the following processes:
Glamourooms Private Ltd.) to the tune of Rs. 11812 lakhs. ï Identification of risks and risk owners
Key Capital structure Ratios ï Evaluation of the risks as to likelihood and consequences
ï Assessment of options for accommodating the risks
Particulars 2006-07 2005-06 ï Prioritising the risk management efforts
Debt/Equity ratio 0.66 0.51 ï Development of risk management plans
ï Authorisation for the implementation of the risk management plans
Long Term Debt/Equity ratio 0.34 0.44
ï Review of the risk management efforts
Outside liabilities/Networth 1.10 0.94
Types of Risks
Net Fixed Assets/Networth 0.91 0.70
For each of the business, the risks were classified under the following heads
Net Fixed Assets/Turnover 0.89 0.37
and the probability of occurrence and the impact of each of them were mapped
and the risk mitigation process was also prepared by the management and
Higher working capital borrowing over previous year by Rs. 13857 lakhs was
presented to the Board.
due to higher sugar inventory of 101937 MT (Previous year 2091 MT) which
has also resulted in higher debt equity ratio as on 31st March, 2007. Repayment ï Business Risks
of Long term loans of Rs. 5034 lakhs during the year led to a better long term ï Operational Risks
debt/equity ratio. ï Environmental Risks
ï Management Risks
Liquidity Ratios ï Financial Risks
Particulars 2006-07 2005-06* This will be a continuous process.
Current Ratio 1.46 1.59 The Company has also formed a Committee called as Risk Committee chaired
Inventory Turnover (days) 90 15 by the Managing Director and the business heads, Chief Financial Officer and
Receivables (day gross sales) 46 69 the Company Secretary as the members.

*Previous year Liquidity ratios is after excluding Parryware divison. The Chairman of the Committee would appraise the Board about the risk
assessment and minimisation procedure at periodic intervals.
Earnings and Dividend Ratios
Human Resources
Particulars 2006-07 2005-06
Every successful company is built on a brand that is taken seriously in the
Dividend 295%* 225%* market place. Towards this, your Company has been focused on building a
Dividend Payout 47.40% 39.5% team with complementary skills and a common value system to achieve
Earnings Per share (Rs.) 14.28 12.98 business goals year on year. Despite a buoyant talent market, the Parry brand
* Includes Special Interim dividend of 225% declared during 2006-07 on account continues to attract the required human capital.
of profit on sale of investments in Parryware Glamourooms Pvt. Ltd. and The best index of a successful corporation is its longevity. The growth and longevity
Special Dividend of 90% on account of profit on sale of investment in of your Company come from strong relationships with its stakeholders - Customers,
2005-06. Farmers, Investors, Employees, Govt. and the society at large.

21

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 E.I.D. - PARRY (INDIA) LIMITED

In an industry which constantly grapples with the unforeseen and uncontrollable,
your Company considers Human Resource Management as the key enabler
in managing this business reality. The emphasis on offering people opportunities
for cross functional and cross business exposure nurtures and challenges their
ability and creativity.
To meet the competitive environment, your Company believes in linking HR to
its investment plans. Your Company focused on manpower planning for key
talent acquisition for functions which are strategic to business like Projects,
Cane, R&D, Extension & Plant Operations. Manning of skilled work force at
our new acquisition (Puducherry Plant) was completed smoothly, which enabled
commencement of operations in a record time.
To facilitate speed of execution, the Cane organisation has been re-structured
on a regional basis.
Your Company continued to maintain industrial peace and harmony by
continuing an environment of trust, transparency, openness and through a
collective bargaining process.
The Nellikuppam and Pugalur Plants bagged State level safety awards, an
indication of our continued work in the area of Safety, Health and Environment
The total number of employees in EID Parry as of 31st March, 2007 is 1698.
Cautionary Statement
Statements in this Management Discussion and Analysis describing the
Companyís objectives, projections, estimates and expectations may constitute
ìforward looking statementsî within the meaning of applicable laws and
regulations. Actual results might differ materially from those either expressed
or implied.
On behalf of the Board
Chennai A. VELLAYAN
May 4, 2007 Chairman

22

directors 07.pmd 22 7/9/2007, 2:20 PM

 REPORT ON CORPORATE GOVERNANCE
Corporate governance refers to the manner in which a Company is directed, None of the Directors on the Board is a Member on more than 10 Committees
and laws and customs affecting that direction. It includes the manner in which and Chairman of more than 5 Committees (as specified in Clause 49 of the
a Company operates under the laws governing Companies, the bylaws Listing Agreement), across all companies in which he is a Director.
established by the Company itself, and the structure of the Company. The
The independent directors have confirmed that they satisfy the ëcriteria of
corporate governance structure specifies the relationship, and the distribution
independenceí as stipulated in the amended Clause 49 of the listing agreements.
of rights and responsibilities, among primarily three groups of participants, viz.,
the board of directors, managers, and shareholders. This system spells out the Changes in the composition of the Board during the year 2006-2007
rules and procedures for making decisions on corporate affairs; it also provides
the structure through which the Company objectives are set, as well as the Sl.No. Name Date of Cessation
means of attaining and monitoring the performance of those objectives.
The fundamental concern of corporate governance is to ensure the conditions 1. Mr. S.M. Datta 19.07.2006
whereby a Companyís directors and managers act in the interests of the
2. Mr. Biswajit Choudhuri 19.07.2006
Company and its various stakeholders.
3. Mr. V. Thyagarajan 19.03.2007
Corporate Governance in E.I.D.-Parry
E.I.D.- Parry, a member of the Murugappa Group of Companies, is committed (b) Details of Directors reappointment
to the principles and features of good corporate governance and follows the Mr.A.Vellayan, Chairman, and Mr.S.Viswanathan, Director, retire by
same in every sphere of activities. The Board of Directors, comprising of eminent rotation at the ensuing Annual General Meeting and being eligible, offer
individuals from various disciplines, ensure fairness in dealings with all themselves for reappointment.
stakeholders of the Company. Relevant details relating to them are furnished in the Notice convening
Board of Directors the Annual General Meeting to be held on 26th July, 2007, sent along with
the Annual Report.
Composition
The Company has seven directors in the Board with a non-executive (c) Board Meetings and Attendance at Board Meetings & Annual General
Chairman. The Board of Directors consist of professionals drawn from diverse Meeting
fields. The majority of the Directors on the Board including the Chairman are The Board of Directors met 5 times during the financial year 2006-07
Non Executive Directors. The day to day Management of the Company is i.e. 24.4.2006, 19.7.2006, 19.10.2006, 25.1.2007 and 19.3.2007. The
done by the Managing Director subject to the supervision and control of the maximum gap between any two meetings was less than 4 months as
Board of Directors. stipulated under Clause 49 of the Listing Agreement.
st
(a) The composition and category of the Board of Directors as at 31 March, 2007 and the number of other Directorships / Committee memberships
held by them are as under:
Sl.No. Name of Director Promoter/Executive/ Number of other Number of membership on
Non Executive/Independent Directorships* other Board Committees**

1. Mr. A. Vellayan@ Promoter, Non Executive 9 of which 4 as Chairman 4

Chairman
2. Mr. Anand Narain Bhatia Non Executive, Independent 1 2 of which 1 as Chairman
3. Mr. S.B. Mathur Non Executive, Independent 13 of which 3 as Chairman 4 of which 1 as Chairman
4. Mr. P. Rama Babu Executive 4 ó
Managing Director
5. Mr. R.A. Savoor Non Executive, Independent 2 of which 1 as Chairman 4 of which 1 as Chairman
6. Mr. S. Viswanathan Non Executive, Independent 2 ó
7. Mr. M.M. Venkatachalam Promoter, Non Executive 12 of which 2 as Chairman 3 of which 1 as Chairman

@ Took over as Chairman w.e.f. 19.7.2006 * Excludes Private Companies, Foreign Companies and Section 25 Companies. ** Denotes memberships in Audit Committee and
Shareholders / Investors Grievance Committee.

23

directors 07.pmd 23 7/9/2007, 2:20 PM

 E.I.D. - PARRY (INDIA) LIMITED

The attendance of each Director at these meetings and at the last internal control systems, scope of audit and observations of the Auditors/
Annual General Meeting was as follows: Internal Auditors;
b) Discussion with internal auditors on significant audit findings and follow
up thereon;
Sl.No. Name No. of Board Attendance at last
Meetings attended AGM c) To review compliance with internal control systems;
d) To review the quarterly, half-yearly and annual financial results of the
1. Mr. S.M. Datta 2* Yes Company before submission to the Board;
2. Mr. A. Vellayan 5 Yes e) To make recommendations to the Board on any matter relating to the
financial management of the Company, including the Audit Report;
3. Mr. Anand Narain 5 Yes
f) Recommending the appointment/reappointment of statutory auditors and
Bhatia fixation of their remuneration.

4. Mr. Biswajit Choudhuri 2 ** Yes The scope of the Audit Committee includes amongst other matters which are set
(Nominee of IDBI out in Clause 49 of the Listing Agreement with the Stock Exchanges as amended
as Lender) from time to time read with Section 292A of the Companies Act,1956.

5. Mr. S.B. Mathur 5 Yes Composition & Meetings

The committee at present comprises of three Non-Executive Directors out of
6. Mr. P. Rama Babu 5 Yes
which two are independent Directors including the Chairman of the Committee.
7. Mr. R.A. Savoor 4 Yes All the members have good financial knowledge and one of the members is a
qualified finance professional.
8. Mr. V. Thyagarajan 3$ Yes
Audit Committee meetings are attended by the head of internal audit, Chief
9. Mr. S. Viswanathan 5 Yes
Financial Officer and senior management members. The statutory auditors and
10. Mr. M.M. Venkatachalam 5 Yes cost auditor are also invited to attend the meetings. The Company Secretary
acts as the Secretary of the Audit Committee.
* Retired at the AGM held on 19.7.2006 st
The Committee met five times during the year ended 31 March, 2007 and
** Nomination withdrawn by IDBI and ceased to be a director w.e.f. 19.7.2006 the gap between two meetings did not exceed four months.
$ Resigned w.e.f. 19.3.2007
The composition of the Audit Committee and the attendance of each Director
Board Committees at these meetings are given below :
Audit Committee
Overall purpose/Objective Sl.No. Name Chairman/ Number of
The purpose of the Audit Committee (the ìCommitteeî) is to assist the Board of Member Meetings attended
Directors (the ìBoardî) in reviewing the financial information which will be
1. Mr. S.M. Datta Chairman * 2
provided to the shareholders and others, reviewing the systems of internal
controls which management and the Board have established, appointing, 2. Mr. Biswajit Choudhuri Member ** 2
retaining and reviewing the performance of independent accountants and 3. Mr. R.A. Savoor Chairman @ 4
overseeing the Companyís accounting and financial reporting processes and 4. Mr. S. Viswanathan Member 5
the audits of the Companyís financial statements. 5. Mr. V. Thyagarajan Member $ 1

Terms of reference 6 Mr. A. Vellayan Member # 3

* Retired at the AGM held on 19.7.2006
The Company had constituted an Audit Committee in the year 1987. The terms
** Nomination withdrawn by IDBI and ceased to be a director w.e.f. 19.7.2006
of reference of the Audit Committee broadly are as under: @ Took over as Chairman w.e.f. 19.7.2006
a) To hold periodic discussions with the Statutory Auditors and Internal $ Co-opted w.e.f. 19.7.2006 and resigned w.e.f. 19.3.2007
Auditors of the Company concerning the financial reports of the Company, # Co-opted w.e.f. 19.7.2006

24

directors 07.pmd 24 7/9/2007, 2:20 PM

 Remuneration and Nomination Committee
Objective
The Committee reviews and determines the Companyís policy on managerial
remuneration and recommends to the Board on the specific remuneration of
Executive Directors, so as to ensure that they are fairly rewarded for their
individual contributions to the Companyís overall performance and their
remuneration is in line with industry standards.
Terms of Reference
The broad terms of reference to the Remuneration & Nomination Committee
are to recommend to the Board salary (including annual increments), perquisites
and commission / incentives to be paid to the Companyís Managing Director
(MD), to finalise the perquisites package within the overall ceiling fixed by the
Board, to recommend to the Board retirement and other benefits to MD. The
committee also recommends to the Board on any new appointments including
re-appointments and the tenure of office, whether of executive or of non-
executive Directors.
The Non-Executive Directors (NEDs) are paid remuneration by way of
commission besides sitting fees. In terms of the shareholders approval and the
Central Government approval obtained from time to time, the commission is
paid at a rate not exceeding 1% per annum out of the profits of the Company
(computed in accordance with Section 349 of the Companies Act, 1956). The
distribution of commission amongst the Non Executive Directors is placed before
the Board for its decision.
The actual commission paid to the Directors is restricted to a fixed sum. This
sum is reviewed periodically taking into consideration various factors such as
performance of the Company, time spent by the Directors for attending to the
affairs and business of the Company and extent of responsibilities cast on
Directors under general law and other relevant factors. The aggregate
commission paid to all Non-Executive Directors is well within the limit of 1% of
the net profits as approved by the shareholders. The Non-Executive Directors
are also paid sitting fees as permitted by government regulations for every
Board / Committee meeting attended by them.
The Company currently does not have stock options scheme.

Composition & Meetings Remuneration for the year

This Committee comprises of three independent non-executive Directors. The eligible Non-Executive Directors are paid commission up to a maximum of
Mr.R.A. Savoor is the Chairman of the Committee. The Committee met three 1% of the net profits of the Company as specifically computed for this purpose.
st
times during the year ended 31 March, 2007. Non-Executive Directors are also paid a sitting fee of Rs.15000 for every
meeting of the Board and Rs.10000 for every Committee meeting attended.
The composition and the attendance of each Director at these meetings are
given below : All fees/compensation paid to the Non-Executive Directors and Independent
Directors are approved by Board of Directors and have shareholdersí approval.
Sl.No. Members of the Chairman/ Number of
Details of the remuneration of Non-executive Directors and Executive Directors
Committee Member Meetings attended
for the year ended 31st March, 2007 are as follows :
1. Mr. S.M. Datta Chairman * 2
Non-Executive Directors
2. Mr. R.A. Savoor Member @ 2
3. Mr. S. Viswanathan Member 3 Name Sitting Fees paid for Commission payable
4. Mr. Anand Narain Member 1 Board and (Rupees)
Bhatia # Committee Meetings
(Rupees)
* Retired at the AGM held on 19.7.2006
@ Took over as Chairman w.e.f. 19.7.2006
Mr. S.M. Datta 70000 60274
# Co-opted w.e.f. 19.7.2006 Mr. A. Vellayan 105000 200000
Remuneration Policy Mr. Anand Narain Bhatia 85000 200000
The Company while deciding the remuneration package of the senior Mr. Biswajit Choudhuri 50000 60274 @
management takes into consideration the following items: Mr. S.B. Mathur 75000 200000 @@
a. job profile and special skill requirements
Mr. R.A. Savoor 120000 200000
b. prevailing compensation structure in companies of similar size and in the
industry Mr. V. Thyagarajan 55000 193425
c. remuneration package of comparable managerial talent in other industries. Mr. S. Viswanathan 185000 200000
For the last few years, effort has also been made to link the annual variable Mr. M.M. Venkatachalam 105000 200000
pay of senior management with the performance of the Company in general
and their individual performance for the relevant year measured against specific @ payable to Industrial Development Bank of India Ltd.
Key Result Areas which are aligned to the Companyís objectives. @@ payable to Life Insurance Corporation of India

25

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 E.I.D. - PARRY (INDIA) LIMITED

Executive Director General Body Meetings

The location and time where the last three Annual General Meetings were
Name Salary/ Contribution Value of Incentive**
Allowances to funds * perquisites (Rupees) held are given below:
(Rupees) (Rupees) (Rupees)
For the year ended Venue Day and date Time
31st March
Mr. P. Rama 9216842 683696 278800 2199060
Babu 2004 The Music Academy Thursday 10.30 a.m.
168 TTK Road, 29.07.2004
* Represents contributions to Provident Fund, Superannuation Fund and Gratuity Fund
** Represents maximum amount payable. Actual amount will be determined by the
Royapettah,
Remuneration and Nomination Committee. Chennai- 600 014

Mr.P.Rama Babu was re-appointed as the Managing Director for a period of 2 2005 Same as above Saturday 11.00 a.m.
years with effect from 1st February, 2005 up to 31st January, 2007. On conclusion 23.07.2005
of this term, the Board has, subject to the approval of the shareholders,
2006 Same as above Wednesday 4.00 p.m.
reappointed Mr.P.Rama Babu as Managing Director for a period of 15 months
from 1st February, 2007 to 30th April, 2008. The notice period is three months 19.07.2006
and no severance compensation is payable.
Details of Special Resolutions passed during the last 3 Annual General
Shareholders / Investors Grievance Committee
Meetings
Terms of reference
The Shareholders/Investors Grievance Committee oversees the Companyís Date of Whether any Special Particulars
relationship with the shareholders and ensures that the shareholders grievances AGM Resolution was passed
are redressed in time.
29.07.2004 No -
Composition & Meetings
The Committee was constituted in 2001. The Committee consists of three 23.07.2005 No -
Directors of whom Mr. S. Viswanathan, the Chairman is a non-executive and 19.07.2006 No -
independent Director. Ms. G. Jalaja, Company Secretary, is the compliance
officer of the Company.
st Postal Ballot
During the year ended 31 March, 2007, the Committee met three times to
During the last year no special resolution was passed through postal ballot.
review the shareholders correspondence including the complaints received
from the shareholders and their redressal. As of now there is no proposal for conducting any special resolution through
postal ballot.
The details of the members of the Committee and their attendance at the
meetings are given below:
Code of Conduct
Sl.No. Name Chairman / Number of The Board has laid down a ìCode of Conductî (Code) for all the Board members
Member meetings attended and the senior management of the Company, and the Code is posted on the
1. Mr. S. Viswanathan Chairman 3 website of the Company www.eidparry.com. Annual declaration regarding
compliance with the Code is obtained from every person covered by the Code
2. Mr. P. Rama Babu Member 2
of Conduct. A declaration to this effect signed by the MD is forming part of this
3. Mr. M.M. Venkatachalam Member 3 report.

The Shareholders / Investors Grievance Committee has prescribed norms for
attending to the shareholders requests and these norms have been mostly
complied with.
The Company received and redressed 7 complaints during the financial year
2006-07.
Risk Management
The Company has laid down procedures to inform board members about the
risk assessment and minimisation procedures. The Board periodically discusses
the significant business risks identified by the management and the mitigation
process being taken up.

26

directors 07.pmd 26 7/9/2007, 2:20 PM

 Prevention of Insider Trading
The Company has framed a Code of Conduct for Prevention of Insider Trading
based on SEBI (Insider Trading) Regulations, 1992. This code is applicable to
all directors/officers /designated employees. The code ensures the prevention
of dealing in Companyís shares by persons having access to unpublished price
sensitive information.
Disclosures
There were no materially significant related party transactions, with Directors/
promoters/management which had potential conflict with the interests of the
Company at large.
Periodical disclosures from Senior Management relating to all material financial
and commercial transactions, where they had or were deemed to have had
personal interest, that might have had a potential conflict with the interest of
the Company at large were placed before the Board.
Transactions with the Related Parties are disclosed in Note No. 21 of Schedule
19 to the Accounts in the Annual Report.
The Company has followed the Guidelines of Accounting Standards laid down
by the Institute of Chartered Accountants of India (ICAI) in preparation of its
financial statements.
During the year under review, the Company has not raised any funds from
public issue, rights issue or preferential issue.
During the last three years, there were no strictures or penalties imposed on
the Company either by Stock Exchanges or by SEBI or any statutory authority
for non-compliance on any matter related to capital markets.
Compliance
The Board reviews periodically compliance reports of all laws applicable to the
Company, prepared by the Company as well as steps taken by the Company
to rectify instances of non compliances, if any.
Subsidiary Companies
The Company does not have any material non listed Indian Subsidiary Company.
The Audit Committee reviews the financial statements and in particular, the
investments made by unlisted subsidiary companies. The minutes of the Board
meetings as well as statements of all significant transactions of the unlisted
subsidiary companies are placed before the Board of Directors of the Company
for their review.
Compliance with Corporate Governance Norms
The Company has complied with the mandatory requirements of the Code of
Corporate Governance as stipulated in Clause 49 of the Listing Agreement
with the Stock Exchanges. The Company has submitted the compliance report
in the prescribed format to the stock exchanges for the quarters ended
June 30, 2006, September 30, 2006, December 31, 2006 and March 31, 2007.
The Statutory Auditors have certified that the Company has complied with the
conditions of corporate governance as stipulated in Clause 49 of the listing
agreements with the stock exchanges. The said certificate is annexed to the
Directorsí Report and will be forwarded to the Stock Exchanges and the Registrar
of Companies, Tamil Nadu, Chennai, along with the Annual Report.
27
directors 07.pmd 27
As regards the non-mandatory requirements, the following were adopted:
1. As detailed in the earlier paragraphs, the Company has constituted a
remuneration and nomination committee.
2. A newsletter from the Managing Director enclosing the financial results for
the half-year ended 30th September, 2006 and highlighting the significant
achievements during the six months was sent to all the shareholders of the
Company.
3. The Company has adopted a Whistle Blower Policy with the objective to
provide employees, customers and vendors an avenue to raise concerns,
in line with E.I.D.- Parry (India) Limitedís commitment to the highest possible
standards of ethical, moral and legal business conduct and its commitment
to open communication.
To provide necessary safeguards for protection of employees from reprisals
or victimisation, for whistle blowing in good faith.
The Audit Committee reviews periodically the functioning of the Whistle
Blower mechanism.
The Whistle Blower Policy has also been posted in the Companyís website
www.eidparry.com.
4. Other non mandatory requirements have not been adopted by the Company.
Means of Communication
The quarterly/half yearly Unaudited financial results and the annual audited
financial results are normally published in a leading business daily, Business
Standard (English) or Business Line (English) and in Dinamani (Tamil). Book
closure and dividend declaration notices are normally published in Business
Standard (English) and Dinamani (Tamil). The financial results and press
releases are placed on Companyís website www.eidparry.com. Details of
Investor/Analysts/Brokers meetings whenever held are also posted on the
website.
As per Clause 51 of the Listing Agreement financial results and quarterly
compliance reports on corporate governance are filed on the Electronic Data
Information Filing and Retrieval (EDIFAR) website maintained by National
Informatics Centre (NIC).
Ms.G.Jalaja, Company Secretary as the Compliance Officer is responsible for
filing the above information in the EDIFAR system.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report forms part of the Annual
Report.
General Shareholder Information
A separate section has been included in the Annual Report furnishing various
details viz. AGM Date time and venue, share price movement, distribution of
shareholding etc.
On behalf of the Board
Chennai A.VELLAYAN
May 4, 2007 Chairman
7/9/2007, 2:20 PM
 E.I.D. - PARRY (INDIA) LIMITED

AUDITORS CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER

CLAUSE 49 OF THE LISTING AGREEMENT(S)

To the Members of
E.I.D.- Parry (India) Limited

We have examined the compliance of conditions of corporate governance by E.I.D.-Parry (India) Limited, for the year ended on 31st March, 2007 as stipulated in
Clause 49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation
thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on
the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of
Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the
management has conducted the affairs of the Company.

For Deloitte Haskins & Sells

Chartered Accountants

GEETHA SURYANARAYANAN
Chennai Partner
May 4, 2007 Membership No.29519

28

directors 07.pmd 28 7/9/2007, 2:20 PM

 DECLARATION ON CODE OF CONDUCT

The Board of Directors

E.I.D.-Parry (India) Limited
Dare House
Parrys Corner
Chennai- 600 001

Dear Sirs,

This is to confirm that the Board has laid down a code of conduct for all Board members and senior management of the Company. The code of conduct has also
been posted on the website of the Company.

It is further confirmed that all directors and senior management personnel of the Company have affirmed compliance with the Code of Conduct of the Company
for the year ended 31st March, 2007, as envisaged in Clause 49 of the Listing Agreement with stock exchanges.

Chennai P.RAMA BABU

April 30, 2007 Managing Director

29

directors 07.pmd 29 7/9/2007, 2:20 PM

 E.I.D. - PARRY (INDIA) LIMITED

GENERAL SHAREHOLDER vi. Stock Code

INFORMATION Name of the Stock Exchange/Depository Code/ISIN

Madras Stock Exchange Ltd. (MSE) EID

i. Annual General Meeting
National Stock Exchange of India Ltd. (NSE) EID PARRY EQ
• Date and Time 26th July, 2007 at 4.00 p.m.
Bombay Stock Exchange Ltd (BSE) 500125
• Venue The Music Academy
The Luxembourg Stock Exchange (LSE) EIDParry GDR ne
168, TTK Road, Royapettah,
Chennai -600 014. NSDL & CDSL INE 126A01023

ii. Financial Year 1st April to 31st March vii. Market Price Data
iii. Date of Book closure 5th July, 2007 to 26th July, 2007 Bombay Stock Exchange(BSE) National Stock Exchange(NSE)
(Both days inclusive) Period High Low Volume High Low Volume
Rs.P Rs.P (in nos) Rs.P Rs.P (in nos)
iv. Dividend Payment Date Within 10 days of AGM
Apr 2006 315.00† 262.60† 662856 320.95 251.05 1607534
v. Listing on Stock Exchanges Equity shares: May 2006 369.00† 241.30† 1426088 365.20 241.00 2294300
ï Madras Stock Exchange Ltd, Jun 2006 292.00† 160.30† 1026426 304.00 155.60 1861240
Exchange Building, Jul 2006 206.60† 163.00† 1166943 206.95 162.00 950322
Post Box No.183,
Aug 2006 220.90† 169.00† 1576487 220.90 169.00 3167805
11 Second Line Beach,
Chennai ñ 600 001. Sep 2006 175.00† 151.50† 1268982 176.00 151.75 2558458
Oct 2006 175.70† 156.05† 1017256 175.50 156.60 2017797
ï National Stock Exchange of
India Ltd, Nov 2006 165.50† 139.00† 2752524 165.65 139.10 2531586
Exchange Plaza, 5th Floor, Plot Dec 2006 153.20† 129.10† 754832 153.50 127.10 1597407
No.C/1, G. Block, Bandra Kurla Jan 2007 144.90† 117.00† 1408326 144.90 117.50 2318963
Complex, Bandra (E),
Feb 2007 134.95† 115.00† 1254265 134.90 112.00 4082576
Mumbai ñ400 051.
Mar 2007 133.00 118.60 626294 133.40 118.25 3014692
ï Bombay Stock Exchange Ltd,
Phiroze Jeejeebhoy Towers, viii. Performance in comparison to broad based indices such as BSE
Dalal Street, Fort, Sensex, CRISIL index etc.
Mumbai ñ 400 001.

Global Depository
Receipts(GDRs)

ï The Luxembourg Stock Exchange ,

11 Avenue De La Porte- Neuve L-2227,
Luxembourg

Listing fees paid for all the above Stock

Exchanges for 2006-2007

30

directors 07.pmd 30 7/9/2007, 2:20 PM

 Month/Year Closing Share Price Closing Sensex Complaints received and redressed
Rs. P Nature of Complaints 2006-07 2005-2006
Apr 2006 291.75 12042.56
May 2006 283.30 10398.61 Received Disposed Received Disposed
Jun 2006 203.35 10609.25
Jul 2006 186.70 10743.88 Non receipt of shares sent for 7 7 23 23
transfer, stock split,
Aug 2006 170.80 11699.05
subdivision and consolidation
Sep 2006 162.25 12454.42
and loss of shares
Oct 2006 163.85 12961.90
Nov 2006 139.75 13696.31 xi. Distribution of Shareholding as on 31.03.2007
Dec 2006 135.40 13786.91 a) By Ownership:
Jan 2007 118.95 14090.92 Category No. of % of share-
Feb 2007 124.60 12938.09 shares holding
Mar 2007 128.25 13072.10
Promoters 37362905 41.86
ix. Registrar and Karvy Computershare Private Limited,
Transfer Agents Plot No: 17 to 24, Vittal Rao Nagar, Mutual funds and UTI 7384703 8.27
Madhapur, Hyderabad ñ 500081. Banks/Financial Institutions
Tel: +91-040-23114058, and Insurance Cos. 11773207 13.19
Fax: +91-040-23420814 Foreign Institutional Investors/GDRs 10831843 12.14
E-Mail: vlakshmi@karvy.com; Private Corporate Bodies 2665648 2.99
jayaramanvk@karvy.com
Indian Public/HUF/Clearing Members 17953535 20.12
x. Share Transfer System: NRIs / OCBs / Foreign nationals 1226679 1.37
ï Share transfers are approved by a committee of Directors called as Madras Trusts 49995 0.06
Committee. Managing Director is individually authorised to approve
Total 89248515 100.00
transfers up to 5000 shares.
ï Some of the executives along with a director have been jointly authorised
to approve request for transfers up to 1000 shares per transferor/ b) By Number of shares held:
transferee.
No. of equity No. of % No. of shares %
ï Certain Executives have also been authorised to approve transfers up to
shares held shareholders
500 shares per transferor/transferee.
Details of Shares Transferred in physical form 1 - 5000 35011 98.42 10473221 11.73
5001-10000 273 0.77 1951701 2.19
2006-2007 2005-2006
Time Taken No. of No. of shares No. of requests No. of shares 10001-20000 120 0.34 1725483 1.93
requests received & 20001-30000 43 0.12 1110622 1.24
received & processed 30001-40000 22 0.06 764825 0.86
processed
40001-50000 11 0.03 510418 0.57
1-10 days 14 2780 20 7462
50001-100000 21 0.06 1558791 1.75
11-20 days 104 28245 199 38648
21-30 days 57 19665 130 17535 Above 100000 73 0.20 71153454 79.73
TOTAL 175 50690 349 63645 Total 35574 100.00 89248515 100.00

31

directors 07.pmd 31 7/9/2007, 2:20 PM

 E.I.D. - PARRY (INDIA) LIMITED

No. of % No. of shares % xiv. Plant Locations

share
Sugar
holders
1. Sugar Factory & Distillery 2. Sugar Factory
Shareholders in: † † † †
Nellikuppam - 607 105 Pettavaithalai - 639 112
Physical Mode 10009 28.14 4509986 5.05
South Arcot District Tiruchirapalli District
Electronic Mode 25565 71.86 84738529 94.95 Tamil Nadu Tamil Nadu
†††NSDL 20711 58.22 80660658 90.38
3. Sugar Factory 4. Sugar Factory
†††CDSL 4854 13.64 4077871 4.57
Pugalur ñ 639 113 Kurumbur ñ 614 622
Tiruchirapalli District Aranthangi Taluk
Tamil Nadu Pudukottai District, Tamil Nadu
c) Details of Shares held by Non-executive directors as on 31.03.2007:
5. Sugar Factory
Sl No. Name of the Director No. of shares held Ariyur, Kandamangalam Post
1 Mr. A. Vellayan 265270 Puducherry - 605 001
Bio Products
2 Mr. Anand Narain Bhatia NIL
6. Bio-Pesticides Factory 7. Nutraceuticals Factory
3 Mr. S. B. Mathur NIL Thyagavalli Village Kadiapatti, Nemathanpatti Road
4 Mr. R. A. Savoor NIL Via Alapakkam Rly. Station Panangudi Post - 622 505
Cuddalore Taluk - 608 803 Oonaiyur Village
5 Mr. S. Viswanathan 2250
South Arcot District Pudukottai District
6 Mr. M. M. Venkatachalam 100250 Tamil Nadu Tamil Nadu

xv. Address for correspondence

xii. Dematerialisation of Shares and 94.95 % of
Liquidity outstanding equity
have been
dematerialised as on
31st March, 2007.
Trading in the equity
shares of the
Company is in the
Compulsory
dematerialised form.
xiii.Outstanding GDRs/ADRs/Warrants 2395965 GDRs are
or any Convertible instruments, outstanding
conversion date and likely as on 31st March, 2007.
impact on equity Each GDR represent one
underlying equity share.
E.I.D. ñ Parry (India) Ltd,
Secretarial Division,
Dare House, Parrys Corner,
Chennai ñ 600 001.
Tel: +91-44-25306789
Fax: +91-44-25341609
E-Mail: investorservices@parry.murugappa.com
Other information for Shareholders
DIVIDENDS
Shareholders who have not encashed their dividend warrants (for earlier
periods) may approach our Registrars and Transfer Agent M/s. Karvy
Computershare Private Ltd, Hyderabad for issue of duplicate dividend warrant
quoting the Folio Number/Client ID. Please note that as per Section 205A of
the Companies Act 1956, dividend which remains unpaid/unclaimed over a
period of 7 years has to be transferred by the Company to the Investor Education
& Protection Fund (IEPF) and no claim shall lie for such unclaimed dividends
from IEPF by the members. Year wise details of the amount to be transferred
to IEPF are given below:

32

directors 07.pmd 32 7/9/2007, 2:20 PM

 Year Dividend Type Dividend Due for transfer to SEBI has, effective 1st February, 2005, removed the following charges relating
percentage the Investor to Dematerialisation:
Education and
Opening of a Beneficiary Owner Account (BO Account) except for
Protection Fund statutory charges as may be applicable;
(% )

Credit of securities into the BO Account; and
1999-00 Second Interim 50 05.06.2007
Custody of securities in case of opening of a BO Account on or
2000-01 Final 70 19.10.2008 after 1st February, 2005.
Further, the custody charges of securities have been removed from
2001-02 Interim 20 21.02.2009
1st April, 2005 for all the investors.
2001-02 Final 50 28.08.2009 Investors are advised to avail of the above facilities and get benefited.
2002-03 Final 60 25.08.2010
GENERAL
2003-04 Final 75 04.09.2011 Shareholders who have still not obtained the new share certificates of Rs.2/-
each are requested to surrender the old share certificates of Rs. 10/- each to
2004-05 Final 125 28.08.2012
our Registrar and Transfer Agents so as to enable them to release the new
2005-06 Final 225 24.08.2013 share certificates.
2006-07 Interim 225 24.08.2013 Shareholders/Beneficial owners are requested to quote their Folio No./DP &
Client ID Nos, Email ids, telephone/Fax numbers for prompt reply to their

ECS communications by the Company/Registrar and transfer agent.

The shareholders are advised to avail ìElectronic Clearing Serviceî(ECS) List of Promoters of the Company belonging to the Murugappa Group pursuant
available in all RBI centers for receiving the dividend by direct electronic to Regulation 3(e) (i) of SEBI(Substantial Acquisition of Shares & Takeovers)
credit to the bank account. ECS provides protection against fraudulent Regulations, 1997.
interception and encashment of dividend warrants or damage to dividend
warrants in transit or problem of revalidation/issuance of duplicate dividend Sl No. Name
warrants and there is no extra cost. Option of availing this facility may be 1. New Ambadi Estates Pvt. Ltd. and subsidiaries
informed to Karvy Computershare Private Ltd. in respect of the shares
2. Ambadi Enterprises Ltd. and subsidiaries
held in physical form and to the respective Depository Participant (DP) in
respect of shares held in electronic form. 3. Silkroad Sugar Private Ltd.

NOMINATION FACILITY 4. Tube Investments of India Ltd. and subsidiaries

Section 109A of the Companies Act, 1956 provides inter alia, the facility of 5. Cholamandalam DBS Finance Ltd. and subsidiaries
nomination to share holders. This facility is mainly useful for all holders 6. Coromandel Engineering Company Limited and subsidiaries
holding the shares in single name. In case where the securities are held in
7. Carborundum Universal Ltd and subsidiaries
joint names, the nomination will be effective only in the event of the death
of all the holders. 8. Laserwords Private Ltd. & subsidiaries
Investors are advised to avail of this facility, especially investors holding 9. Godavari Fertilisers & Chemicals Ltd
securities in single name, to avoid the process of transmission by law. 10. Parry Enterprises India Ltd.

BENEFITS OF DEMATERIALISATION 11. Presmet Private Ltd.
5.05 % of the shares are still in physical form. Those shareholders who 12. AMM Educational Foundation
are holding shares in physical form are advised to convert their holdings
13. AMM Arunachalam & Sons P Ltd.
into demat form, since the Companyís equity shares are under compulsory
demat trading. 14. AMM Vellayan Sons P Ltd.

33

directors 07.pmd 33 7/9/2007, 2:21 PM

 E.I.D. - PARRY (INDIA) LIMITED

Sl No. Name Sl No. Name

15. MM Muthiah Sons P Ltd. 25. S Vellayan & family
16. Kadamane Estates Company 26. A Vellayan & family
17. Yelnoorkhan Group Estates 27. A Venkatachalam & family
18. Murugappa & Sons 28. M M Murugappan & family
19. MM Muthiah Research Foundation 29. M M Venkatachalam & family
20. A R Lakshmi Achi Trust 30. M A Alagappan & family
21. AMM Foundation 31. Arun Alagappan & family
22. AMM Medical Foundation 32. M A M Arunachalam & family
23. M V Murugappan & family Family for the above purpose includes the spouse, dependent children
24. M V Subbiah & family and parents.

Ministry of Company Affairs, Government of India vide their Letter No.47/94/2007 - CL - III Dated 12th April, 2007 have granted exemption under Section 212(8)
of the Companies Act, 1956 from attaching the financial statements of the subsidiary Companies, to the Companyís accounts for the financial year ended
31st March, 2007. The annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary
company investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any investor
at the head office and that of the subsidiary company concerned.

34

directors 07.pmd 34 7/9/2007, 2:21 PM

 AUDITORS’ REPORT TO THE MEMBERS OF
E.I.D.- PARRY (INDIA) LIMITED
1. We have audited the attached Balance Sheet of E.I.D.- Parry (India)
st
Limited as at 31 March, 2007, the Profit and Loss Account and also the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Companyís
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditorís Report) Order, 2003 issued by
the Central Government of India in terms of sub-section (4A) of Section
227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in Paragraph 3 above,
we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes
of our audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination
of those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books
of account;
35
directors 07.pmd 35
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
(v) On the basis of written representations received from the directors
and taken on record by the Board of Directors, we report that none
st
of the directors is disqualified as on 31 March, 2007 from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956 as on the said date;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
st
Company as at 31 March, 2007;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date, and
(c) in the case of the Cash Flow Statement, of the cash flows for
the year ended on that date.
For DELOITTE HASKINS & SELLS
Chartered Accountants
Geetha Suryanarayanan
Place: Chennai Partner
Date : May 4, 2007 Membership No.29519
7/9/2007, 2:21 PM
 E.I.D. - PARRY (INDIA) LIMITED
Annexure referred to in Paragraph 3 of our report of even date
1. In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management
during the year and in accordance with a programme of verification
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. According to the information
and explanations given to us, no material discrepancies were noticed
on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do not
constitute a substantial part of the fixed assets of the Company and
such disposals has, in our opinion, not affected the going concern
status of the Company.
2. In respect of its inventories:
(a) As explained to us, inventories were physically verified by the
management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventory. The discrepancies noticed on physical verification between
physical stock and book records were not material.
3. (a) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956.
(b) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations given to
us, there are adequate internal control procedures commensurate with
the size of the Company and nature of its business with regard to the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls.
36
directors 07.pmd 36
5. In respect of contracts or arrangements referred to in Section 301 of the
Companies Act, 1956:
a. According to the information and explanations given to us, the
particulars of contracts or arrangements that needed to be entered
into the register have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts
or arrangements and exceeding the value of Rs.5,00,000 in respect
of any party during the year, have been made at prices which are
prima facie reasonable having regard to prevailing market prices at
the relevant time.
6. In our opinion and according to the information and explanations given to
us, the Company has complied with the provisions of Sections 58 and
58AA or any other relevant provisions of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public in prior years.
7. In our opinion, the Company has an internal audit system commensurate
with the size and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
in respect of products where pursuant to the Rules made by the Central
Government, the maintenance of cost records has been prescribed under
Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that
prima facie the prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of the
records with a view to determining whether they are accurate or complete.
9. Statutory and other dues
(a) According to the information and explanations given to us, the
Company has been regular in depositing undisputed statutory dues
including Provident Fund, Employeeís State Insurance, Income Tax,
Sales Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty,
Cess and other material statutory dues with the appropriate
authorities during the year.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax,
Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess were
st
in arrears, as at 31 March, 2007, for a period of more than six
months from the date they became payable.
7/9/2007, 2:21 PM
 (c) According to the information and explanations given to us, there are
no dues of Income Tax, Sales Tax, Customs Duty, Wealth Tax, Service
Tax, Excise Duty and Cess that have not been deposited on account
of any dispute except for the dues referred to in Note No. 23 of
Schedule 19.
10. The Company does not have any accumulated losses at the end of the
year. The Company has not incurred cash losses during the current and
immediately preceding financial year.
11. According to the information and explanations given to us by the
management, we are of the opinion that the Company has not defaulted
in repayment of dues to banks and financial institution.
12. According to the information and explanations given to us and based on
our examination of documents and records, we are of the opinion that no
loans or advances have been granted by the Company on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditorís Report) Order, 2003 are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
(xiv) of the Companies (Auditorís Report) Order, 2003 are not applicable
to the Company.
15. In our opinion and according to the information and explanations given to
us, the terms of conditions of standby letter of credit given by the Company,
for loans taken by a subsidiary company from a bank during the year are
not prejudicial to the interest of the company.
37
directors 07.pmd 37
16. In our opinion and according to the information and explanations given to
us, the term loans availed by the Company were, prima facie, applied by
the Company during the year for the purposes for which the loans were
obtained.
17. According to the information and explanations given to us and on an overall
examination of the balance sheet of the Company, funds raised on short term
basis have prima facie, not been used for long term investment.
18. The Company has not made preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Act.
19. According to the information and explanations given to us and the records
examined by us, the debentures issued during the year are unsecured.
20. The Company has not raised any money by public issues during the year.
21. To the best of our knowledge and belief and according to the information
and explanations given to us, no fraud on or by the Company was noticed
or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
Geetha Suryanarayanan
Place: Chennai Partner
Date : May 4, 2007 Membership No.29519
7/9/2007, 2:21 PM
 E.I.D. - PARRY (INDIA) LIMITED

Balance Sheet as at March 31, 2007

Rs. Lakhs
Schedule As at As at
March 31, 2007 March 31, 2006
I. SOURCES OF FUNDS
1. SHAREHOLDERS’ FUNDS:
(a) Share Capital 1 1785 1785
(b) Reserves and Surplus 2 51884 53669 46943 48728
2. LOAN FUNDS:
(a) Secured Loans 3 22212 23124
(b) Unsecured Loans 4 13024 35236 1756 24880
3. DEFERRED TAX LIABILITY (Note 18 of Schedule 19) 7367 4801
TOTAL 96272 78409
II. APPLICATION OF FUNDS
1. FIXED ASSETS: 5
Gross Block 73681 54407
Less: Depreciation 25766 22536
(a) Net Block 47915 31871
(b) Capital Work-in-Progress at cost 951 48866 2075 33946
2. INVESTMENTS 6 11736 11167
3. CURRENT ASSETS, LOANS AND ADVANCES:
(a) Inventories 7 18239 3185
(b) Sundry Debtors 8 9271 31205
(c) Cash and Bank Balances 9 24668 8675
(d) Other Current Assets - Interest Accrued 221 104
(e) Loans and Advances 10 6791 10713
59190 53882
Less :
CURRENT LIABILITIES AND PROVISIONS :
(a) Liabilities 11 22112 16171
(b) Provisions 12 1462 4580
23574 20751
NET CURRENT ASSETS 35616 33131
4. MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) 13 54 165
TOTAL 96272 78409
NOTES ON ACCOUNTS 19
The schedules referred to above form an integral part of these accounts
This is the Balance Sheet referred to in our Report of even date. On behalf of the Board

For Deloitte Haskins & Sells A. VELLAYAN

Chartered Accountants Chairman

GEETHA SURYANARAYANAN G. JALAJA D. KUMARASWAMY P. RAMA BABU

Partner Secretary Chief Financial Officer Managing Director
Membership No. 29519
Chennai
May 4, 2007

38
Profit and Loss Account for the year ended March 31, 2007
Rs. Lakhs
Schedule Year ended Year ended
March 31, 2007 March 31, 2006
INCOME:
Sales and Services 58323 97846
Less: Excise Duty 3151 55172 5228 92618
Other Income 14 15546 5198
70718 97816
EXPENDITURE:
Materials 15 34142 56335
Employee Cost 16 4107 5662
Other Costs 17 12360 18053
Depreciation 3301 2932
Less: Transfer from fixed assets revaluation reserve 14 3287 17 2915
Interest (Net) 18 (211) 739
53685 83704
PROFIT BEFORE TAX 17033 14112
Profit from continuing operations before tax 17033 11159
Less: Provision for Tax (Note 18 of Schedule 19)
Current 1680 1505
Less: MAT Credit Entitlement 61 1619 –
Deferred 2615 (275)
Fringe Benefit Tax 57 4291 88 1318
Profit from continuing operations after tax (a) 12742 9841
Profit from discontinuing operations before tax – 2953
Less: Provision for Tax
Current – 1145
Deferred – –
Fringe Benefit Tax – – 65 1210
Profit from discontinuing operations after tax (b) – 1743
PROFIT AFTER TAX (a + b) 12742 11584
Surplus brought forward 15554 11541
Balance in Profit & Loss Account of Amalgamating Company (1290) 9
Amount available for Appropriation 27006 23134
APPROPRIATIONS:
Interim Dividend on Equity Share Capital 4016 –
Proposed Dividend on Equity Share Capital 1250 4016
Dividend Tax 776 564
General Reserve 3000 3000
Balance carried to Balance Sheet 17964 15554
27006 23134
Earnings per Share-Basic and Diluted - in Rs. (Face value Rs. 2) 14.28 12.98
(Note 19 of Schedule 19)
NOTES ON ACCOUNTS 19
The schedules referred to above form an integral part of these accounts
This is the Profit and Loss Account referred to in our Report of even date. On behalf of the Board

For Deloitte Haskins & Sells A. VELLAYAN

Chartered Accountants Chairman

GEETHA SURYANARAYANAN G. JALAJA D. KUMARASWAMY P. RAMA BABU

Partner Secretary Chief Financial Officer Managing Director
Membership No. 29519
Chennai
May 4, 2007

39
 E.I.D. - PARRY (INDIA) LIMITED

Cash Flow Statement for the year ended March 31, 2007
Rs. Lakhs
Year ended Year ended
March 31, 2007 March 31, 2006

A. CASH FLOW FROM OPERATING ACTIVITIES

NET PROFIT BEFORE TAX 17033 14112
Adjustments for :
Depreciation 3287 2915
Interest expense (net) (211) 739
Investment income (1990) (1510)
(Profit) / Loss on sale of fixed assets (5) (365)
(Profit) / Loss on sale of investments (net) (11812) (2285)
Payment under voluntary separation scheme – (17)
Other non cash items (394) (11125) 71 (452)
Operating profit before working capital changes 5908 13660
Adjustments for : (Increase)/Decrease in:
Trade and other receivables 10005 (12598)
Inventories (14583) 13882
Current liabilities 5798 4263
Net current assets transferred on sale/amalgamation of business – 1220 (6972) (1425)
Cash generated from operations 7128 12235
Direct taxes paid net of refund (3424) (3125)
Net cash flow from operations 3704 9110
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets (17765) (15107)
Proceeds on sale of fixed assets 48 516
Proceeds on sale of business 16066 –
Purchase of investments (863) (318)
Investments in subsidiary companies (1652) (164)
Sale of investments 12106 2722
Interest received 1723 572
Investment income 1990 1113
Net cash used in investing activities 11653 (10666)

40
Cash Flow Statement for the year ended March 31, 2007
Rs. Lakhs
Year ended Year ended
March 31, 2007 March 31, 2006

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from long term borrowings 1765 12500
Repayment of long term borrowings (5034) (112)
Proceeds from other term borrowings (net) 11268 (3915)
Change in working capital finance 2241 (2016)
Interest paid (1593) (1263)
Dividends paid (8032) (2231)
Net cash flow from financing activities 615 2963
NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 15972 1407
Cash and cash equivalents as at 1st April 8696 7268
Cash and cash equivalents as at 31st March 24668 8675

Cash and cash equivalents as at 1st April, 2006 include Rs. 21 lakhs of the amalgamating company.

This is the Cash Flow Statement referred to in our report of even date.

On behalf of the Board

For Deloitte Haskins & Sells A. VELLAYAN

Chartered Accountants Chairman

GEETHA SURYANARAYANAN G. JALAJA D. KUMARASWAMY P. RAMA BABU

Partner Secretary Chief Financial Officer Managing Director
Membership No. 29519
Chennai
May 4, 2007

41
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
As at As at
March 31, 2007 March 31, 2006

SCHEDULE 1
SHARE CAPITAL :
AUTHORISED :
Preference Shares:
50,00,000 Redeemable Preference Shares of Rs.100 each 5000 5000
Equity Shares:
25,75,00,000 Equity Shares of Rs. 2 each 5150 5150
(2006- 25,75,00,000 Equity Shares of Rs. 2 each)
10150 10150
ISSUED AND SUBSCRIBED
8,92,48,515 Equity Shares of Rs.2 each fully paid up 1785 1785
(2006 - 8,92,48,515 Equity Shares of Rs. 2 each)
1785 1785
Of the above, 3,44,74,295 Equity Shares of Rs. 2 each have been allotted as fully
paid up for consideration other than cash.

SCHEDULE 2
RESERVES AND SURPLUS:
As at As at
April 1, 2006 Additions
Additions Deductions
Deductions March 31, 2007
CAPITAL RESERVES:
Capital Reserve 1348 – – 1348
Capital Redemption Reserve 3050 – – 3050
Fixed Assets Revaluation Reserve # 624 – 14 # 610
Securities Premium Account 8092 – – 8092
13114 – 14 13100
REVENUE RESERVES:
Investment Fluctuation Reserve 1400 – – 1400
General Reserve (Notes 2 and 9 of Schedule 19) 16875 3000 455 19420
18275 3000 455 20820
PROFIT AND LOSS ACCOUNT BALANCE 15554 17964
46943 51884

# Deduction during the year represents Rs. 14 lakhs transferred to Profit and Loss Account.
As at As at
SCHEDULE 3 March 31, 2007 March 31, 2006
SECURED LOANS: (Note 3 of Schedule 19)
(a) Term Loans from:
i) Government of India - Sugar Development Fund 2033 369
ii) Foreign Currency Loan from Industrial Development Bank of India – 93
iii) Banks – Foreign currency Loan – 3590
– Rupee Loan 16250 18283 17500 21552
(b) Cash Credit from Bank 3929 1572
22212 23124

42
Schedules forming part of Accounts
Rs. Lakhs
As at As at
March 31, 2007 March 31, 2006

SCHEDULE 4
UNSECURED LOANS:
(a) Fixed Deposits – 17
(b) Short Term loan from - Banks - Rupee Loan 13000 –
- Other than Banks – 1500
(c) Sales Tax Deferral Scheme – 125
(d) Security Deposits 24 114
13024* 1756*
*Repayable within one year 13000 1642

SCHEDULE 5
FIXED ASSETS : Rs. Lakhs

GROSS BLOCK DEPRECIATION NET BLOCK

Cost/Value Additions on Additions Deletions Cost/Value As at Additions on For Withdrawn As at As at As at
As at Amalgamation As at 01-04-2006 Amalgamation the 31-03-2007 31-03-2007 31-03-2006
01-04-2006 31-03-2007 year

Tangible Assets

Freehold Land 2114 24 571 – 2709 – – – – – 2709 2114

Leasehold Land 4 – – – 4 1 – – – 1 3 3

Buildings (Notes 1 and 2) 7045 256 1571 – 8872 2098 15 195 – 2308 6564 4947

Plant and Machinery 41643 863 15625 174 57957 18644 96 2530 101 21169 36788 22999

Furniture and
Office Equipment 2814 21 396 23 3208 1493 6 329 20 1808 1400 1321

Vehicles 557 2 239 97 701 218 – 170 67 321 380 339

Intangible Assets

Patent 230 – – – 230 82 – 77 – 159 71 148

54407 1166 18402 294 73681 22536 117 3301 188 25766 47915 31871

Previous Year 57536 – 10177 13306 54407 25506 – 2932 5902 22536

Capital Work-in-Progress 951 2075

48866 33946

Notes:
1. Includes cost of 131 shares of Rs.100 each (2006 - Rs 0.13 Lakh) in Shri Siddhi Vinayak Co-operative Housing Society Limited.
2. Includes cost of Rs.31 Lakhs ( 2006 - Rs.31 Lakhs) for which title deeds are yet to be received from the Registrar.

43
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
SCHEDULE 6
INVESTMENTS:
Nos Rs Lakhs
Nominal Value April, 1 Acquisitions Sales March, 31 April, 1 Acquisitions Sales March, 31
Long Term Rs. 2006 2007 2006 2007
(A) Quoted
Equity Shares (Fully Paid up)
Trade Subsidiary Company
Coromandel Fertilisers Limited 2 87,719,035 – – 87,719,035 9,010 – – 9,010
Trade Others
Trichy Distilleries and Chemicals Limited 10 220,000 – – 220,000 9 – – 9
Non Trade Others
Kartik Investments Limited 10 23,600 – – 23,600 4 – – 4
Travancore Sugars and Chemicals Limited 10 100 – – 100 – – – –
State Bank of India 10 6,870 – – 6,870 3 – – 3
Cholamandalam DBS Finance Limited 10 225 – – 225 – – – –
Coromandel Engineering Company Limited 10 42,938 – – 42,938 4 – – 4
Carborundum Universal Limited 2 1,000 – – 1,000 – – – –
(A) Total Quoted Shares 9,030 – – 9030
(B) Unquoted
Equity Shares (Fully paid up)
Trade Subsidiary Companies
Parry America Inc. US $100 500 – – 500 24 – – 24
Parrys Sugar Limited 10 1,500,000 – – 1,500,000 150 – – 150
Parrys Investments Limited 10 250,150 – – 250,150 37 – – 37
Parry Infrastructure Company Private Limited 10 – 10,000 – 10,000 – 1 – 1
Parry Nutraceuticals Limited 10 – 2,050,400 2,050,400 # – – 237 237 # –

Non Trade
Coromandel Bathware Limited 10 1,939,998 – – 1,939,998 68 – – 68
Trade Others
Parry Monsanto Seeds Private Limited 10 2,455,031 – – 2,455,031 246 – – 246
Southern Energy Development Corporation Limited 10 10,000 – – 10,000 1 – – 1
Murugappa Management Services Limited 100 18,270 – – 18,270 18 – – 18
Silkroad Sugar Private Limited 10 – 1,000,000 – 1,000,000 – 362 – 362
(formerly Parrys Sugars Refineries Private Limited)
Parryware Roca Private Limited 10 1,500,000 – 432,580 1,067,420 150 – 44 106
(formerly Parryware Glamourooms Private Limited)
Non Trade - Others
Hawker Siddley Group Limited ( Shares of 25 pence each) 125 - - 125 - - - -
Indian Dairy Entrepreneur and Agricultural Co Limited 1 10,000 - - 10,000 - - - -
( Cost less amount written off Rs. 0.90 lakh)
Chennai Wellingdon Corporate Foundation 10 266 - - 266 - - - -
Indian Potash Limited 10 637,200 – - 637,200 32 - - 32
Bio Tech Consortium (India) Limited 10 100,000 - - 100,000 10 - - 10
E Commodities Limited 10 300,000 - - 300,000 30 - - 30
Murugappa Morgan Thermal Ceramics Limited 10 2 - - 2 - - - -

44
Schedules forming part of Accounts
Rs. Lakhs
SCHEDULE 6 (Contd.)

Nos Rs. Lakhs

Nominal Value April, 1 Acquisitions Sales March, 31 April, 1 Acquisitions Sales March, 31
Rs. 2006 2007 2006 2007

Parry Agrochem Exports Limited 10 9,500 – – 9,500 – – – –

Kulittalai Cane Farms Private Limited 100 20 – – 20 – – – –
Non Trade - Others Preference Shares
New Ambadi Estates Private Limited – 7% Redeemable
Preference Shares 100 250,000 – 250,000 – 250 – 250 –
(Redeemed during the year)
Parry Nutraceuticals Limited – 7% Redeemable 100 – 1,411,500 1,411,500 # – – 1,415 1,415 # –
Preference Shares
Mutual Funds 10 – 5,000,000 – 5,000,000 – 500 – 500
Public Sector Bonds
NABARD 5 Year 5.4% Redeemable Bonds 10,000 3,000 – – 3,000 300 – – 300
National Housing Bank 5 Year 5.45% Redeemable Bonds 10,000 4,700 – – 4,700 470 – – 470
Rural Electrical Corporation 5 Year 5.5% Redeemable Bonds 10,000 3,500 – – 3,500 350 – – 350
Government Securities ( Lodged as Security deposit) ** – – – – 1 – – 1
(B) Total unquoted shares 2,137 2,515 1,946 2,706
(A+B) Total Investments 11,167 2,515 1,946 11,736
Market Value of Quoted Investments 84176 57383
Notes:
a) 15 Shares in Kulittalai Cane Farms Private Limited and 125 shares in Hawker Siddley Group Limited are in the process of being transferred in the name of the Company.
b) The details of investments in Mutual Funds purchased and redeemed during the year are given below ( No of units )
DBS Chola Liquid Inst Daily Div Reinvestment Plan 101,685,314; Templeton Management Account Super Inst Plan - Daily Div Reinv 299,925.02 DBS Chola Short Term Floating Rate
Fund - Daily Div Rein Plan 70,024,871.26 ; DBS Chola FMP - Series 4 Qtrly Plan - 1 - Div 60,000,000; DBS Chola FMP - Series 5 Qtrly Plan - 1 - Div 20,000,000; DBS Chola Freedom Income
STP inst - Monthly Div 27,468,104.99 HDFC Liquid Fund - Premium Plus Plan - Div 24,244,383.385

# Cancelled on amalgamation
** Includes NSC Certificates amounting to Rs. 11,000 acquired on amalgamation

Rs. Lakhs
As at As at
March 31, 2007 March 31, 2006
SCHEDULE 7
INVENTORIES:
Raw Materials 211 349
Work-in-Progress 659 561
Finished Goods 16492 1527
17362 2437
Consumable Stores and Spares 877 748
18239 3185

45
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
As at As at
March 31, 2007 March 31, 2006

SCHEDULE 8
SUNDRY DEBTORS:
Debts outstanding for a period exceeding six months:
Unsecured - Considered Good 551 586
Unsecured - Considered Doubtful 143 129
694 715
Less: Provision for Doubtful Debts 143 551 129 586
Other Debts:
Secured - Considered Good – –
Unsecured - Considered Good 8720 8720 30619 30619
9271 31205

SCHEDULE 9
CASH AND BANK BALANCES:
Cash-in-hand and in-transit (including cheques on hand) 108 427
Balance with Scheduled Banks:
In Current Account 279 128
In Dividend Account 167 81
Short-term Deposit 24109 8035
Balance with other Banks:
In Current Accounts (Note 1 below) 5 4
24668 8675

As at Maximum As at Maximum
March 31, Balance March 31, Balance
Note
2007 during 2006 during
1. Balances with Other Banks 2007 2006
Cuddalore District Central Co-operative Bank Limited 3 84 3 105
Vallalar Grama Bank 1 8 1 8
Trichy District Co-operative Bank (2006 - Rs. 28,000) 1 79 – 20

SCHEDULE 10
LOANS AND ADVANCES:
Unsecured and considered Good unless otherwise stated :
Loans/ Advances to a Subsidiary Company – 940
Advance Tax less Provision for Tax Rs. 13778 lakhs,
including provision for Fringe Benefit Tax Rs. 210 Lakhs (2006 - Rs. 12041 lakhs
including Fringe Benefit Tax Rs. 153 Lakhs) 1078 571
MAT Credit Entitlement (Note 18 of Schedule 19) 61 –
Advance recoverable in cash or in kind or for value to be received:
– Unsecured and Considered Good 5652 9202
– Considered Doubtful 97 106
5749 9308
Less: Provision for Doubtful Advances 97 5652 106 9202
6791 10713

46
Schedules forming part of Accounts
Rs. Lakhs
As at As at
March 31, 2007 March 31, 2006

SCHEDULE 11
LIABILITIES:
Sundry Creditors (Note 8 of Schedule19)
– Dues to Small Scale Industrial Undertakings – –
– Dues to Other than Small Scale Industrial Undertakings 18527 13506
Advances and Deposits 340 191
Due to Directors - Commission (Net) 35 37
Investor Education and Protection Fund @
(a) Unpaid Dividend 167 81
(b) Unpaid Matured Deposits 1 3
(c) Unpaid Matured Debentures – 4
(d) Interest accrued on (a) to (c) above 2 170 3 91
Other Liabilities 2930 2273
Interest accrued but not due on loans 110 73
22112 16171
@ None of the amounts disclosed are more than seven years old as on the Balance Sheet date

SCHEDULE 12
PROVISIONS:
Proposed Dividend-Final 1250 4016
Dividend Tax 212 564
1462 4580

SCHEDULE 13
MISCELLANEOUS EXPENDITURE:
Voluntary Separation Scheme:
As per last Balance Sheet 165 259
Add: Expenses incurred during the year – 17
165 276
Written off during the year 111 111
54 165

47
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
Year Ended Year Ended
March 31, 2007 March 31, 2006
SCHEDULE 14
OTHER INCOME:
Profit on sale of Fixed Assets (Net) 5 365
Profit on sale of Investments (Net) 11812 2285
Liabilities/ Provisions no longer required (Note below) 547 188
Dividend Income:
Subsidiary Companies 1491 1316
Trade Investments 203 108
Other Investments 296 1990 86 1510
Sundry Income 1192 850
15546 5198

Note - Includes Provision made for Doubtful debts/advances written back 22 Nil

SCHEDULE 15
MATERIALS:
Raw Materials Consumed 48517 39362
Purchase of Finished Goods 299 7185
(Increase)/Decrease in Stocks
Opening Stock - Work-in-progress 561 532
- Finished Goods 1527 14476
Add : Opening Stock of Amalgamating Company 389 –
2477 15008
Less: Stocks relating to erstwhile Parryware division (2006) – 3132
2477 11876
Closing Stock - Work-in-progress 659 561
- Finished Goods 16492 1527
17151 (14674) 2088 9788
34142 56335

SCHEDULE 16
EMPLOYEE COST : (Note Nos. 9 & 17.1 of Schedule 19)
Salaries, Wages and Bonus 3294 4552
Contribution to Provident and Other Funds 338 441
Workmen and Staff Welfare Expenses 475 669
4107 5662

48
Schedules forming part of Accounts
Rs. Lakhs
Year Ended Year Ended
March 31, 2007 March 31, 2006

SCHEDULE 17
OTHER COSTS :
Consumption of Stores 1277 1267
Power and Fuel 1071 4020
Rent 138 235
Repairs and Maintenance - Buildings 71 84
- Plant and Machinery 2000 2071 1788 1872
Insurance 265 315
Rates and Taxes (Net) 1367 497
Packing, Despatching and Freight 2381 3672
Commission to Selling Agents 24 38
Rebates and Discounts 98 922
Auditors’ Fees and Expenses 22 19
Directors’ Fees and Commission 46 49
Sales Promotion and Publicity 505 1486
Fixed Assets scrapped 3 11
Professional Charges 915 847
Provision for Doubtful Debts and Advances 10 46
Bad Debts/Advances written off 13 12
Less: Provision for Doubtful Debts/ Advances adjusted 3 10 – 12
General Manufacturing, Selling and Administration Expenses 2157 2745
12360 18053

SCHEDULE 18
INTEREST:
Interest on
– Debentures 478 197
– Other Fixed Loans 971 431
[Net of capitalisation Rs. 370 lakhs (2006 - Rs. 367 lakhs)]
– Others 180 606
1629 1234
Less: Interest Income on Deposits etc. (Gross) 1840 495
[Tax deducted at source Rs. 392 lakhs ( 2006 - Rs. 87 lakhs)]
(211) 739

49
 E.I.D. - PARRY (INDIA) LIMITED
Schedules forming part of Accounts
SCHEDULE 19
NOTES ON ACCOUNTS
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Accounting Convention
The financial statements are prepared under the historical cost
convention in accordance with the generally accepted accounting
principles in India and the provisions of the Companies Act, 1956,
except for certain fixed assets which are revalued.
1.2 Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets
and liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognised
in the period in which the results are known / materialised.
1.3 Fixed Assets
Fixed Assets (other than those which have been revalued) are stated
at historical cost. Cost includes related taxes, duties, freight, insurance
etc. attributable to acquisition and installation of assets and borrowing
cost incurred up to the date of commencing operations, but excludes
duties and taxes that are recoverable subsequently from taxing
authorities. The revalued fixed assets are restated at their estimated
current replacement values as on date of revaluation as determined
by the valuers.
Intangible Assets are stated at cost of acquisition less accumulated
amortisation.
1.4 Depreciation
Depreciation on fixed assets (other than revalued land and buildings
and leased assets) is calculated on Straight line method on following
basis:
Assets acquired up to June 30, 1987 on the basis of specified period
under section 205(2) (b) of the Companies Act, 1956.
In respect of assets acquired after June 30, 1987, Buildings and Plant
and Machinery are depreciated based on estimated useful life of the
assets determined by technical evaluation at the following annual rates:
Buildings 1.67% to 3.65%
Plant and Machinery 4.75% to 25.89%
Vehicles, Computers and Furnitures and Office Equipments are being
depreciated based on estimated useful life at the following annual
rates as against rates specified in Schedule XIV to the Companies
Act, 1956 :
Vehicles 23.75%
Computers 31.67%
Furniture & Office Equipments 4.75 % to 23.75%
50
Rs. Lakhs
Leased assets are fully depreciated over the primary lease period. In
respect of additions and deletions during the year, depreciation charge
is provided on pro- rata basis. Assets costing individually Rs 5,000 or
less are fully depreciated in the year of addition.
The difference between the depreciation for the year on revalued
buildings and depreciation calculated on the original cost is recouped
from the fixed assets revaluation reserve.
Cost of patent are amortised over the expected period of future benefits.
1.5 Investments
Long term investments are stated at cost. The diminution in the market
value of such investment is not recognised unless such diminution is
considered permanent in nature. Current Investments are carried at
lower of cost or market value.
1.6 Inventories
Raw materials, consumables and stores and spares are valued at or
below cost. Cost in respect of raw materials is ascertained on First in
First out basis and for others on weighted average basis. Cost includes
all taxes and duties, but excludes duties and taxes that are
subsequently recoverable from taxing authorities. Work in progress
has been valued at or below cost. By-products are valued at net
realisable value. Finished Goods have been valued at lower of cost
and net realisable value.
Cost includes all direct costs and applicable production overheads to
bring the inventories to the present location and condition.
1.7 Revenue Recognition
i) Sales include Excise duty recovered and is net of trade discounts
and sales returns.
ii) Export benefits under DEPB License are accounted on accrual
basis.
iii) Dividend income is accounted for in the year in which the right to
receive payment is established.
1.8 Foreign Currency Transactions
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of the transaction. At the year end, all monetary
assets and liabilities denominated in foreign currency are restated at
the year end exchange rates. The premium/discount on forward
contracts are amortised over the period of the contract. Exchange
differences arising on actual payment/realisation and year end
reinstatement referred to above are adjusted:
i) in respect of fixed assets acquired outside the country to the related
cost of fixed assets and
ii) in all other cases in the profit and loss account.
Schedules forming part of Accounts
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS
1.9 Research and Development
Revenue expenditure on research and development is charged off as
and when incurred.
1.10 Employee Benefits
i. DEFINED CONTRIBUTION PLANS
a. Provident Fund
Contributions are made to the Company’s Employees
Provident Fund Trust in accordance with the fund rules. The
interest rate payable by the trust to the beneficiaries every
year is being notified by the Government. The Company has
an obligation to make good the shortfall, if any, between the
return from the investments of the trust and the notified interest
rate.
The Company also contributes to a government administered
pension fund on behalf of its employees.
b. Superannuation
Fixed contributions to the Superannuation Fund, which is
administered by trustees and managed by LIC, are charged
to the Profit and Loss Account. The Company has no liability
for future Superannuation Fund benefits other than its annual
contribution and recognises such contributions as an expense
in the year incurred.
ii. DEFINED BENEFIT PLAN
Gratuity
The Company makes annual contribution to a Gratuity Fund
administered by trustees and managed by LIC. The Company
accounts its liability for future gratuity benefits based on actuarial
valuation, as at the balance sheet date, determined every year
by LIC using the Projected Unit Credit method.
iii. SHORT TERM EMPLOYEE BENEFIT
Short term employee benefits, including accumulated
compensated absences, are recognised as an expense as per
the Company’s scheme based on expected obligations on
undiscounted basis.
1.11 Miscellaneous Expenditure
Voluntary Separation Scheme expenditure is amortised over the
expected period of future benefits.
1.12 Taxation
Provision for Current tax is made based on the liability computed in
accordance with the relevant tax rates and tax laws. Provision for
deferred tax is made for timing differences arising between the taxable
51
Rs. Lakhs
income and accounting income computed using the tax rates and the
laws that have been enacted or substantively enacted as of the balance
sheet date. Deferred tax assets are recognised only if there is a virtual
certainty that they will be realised and reviewed for the appropriateness
of their carrying values at each balance sheet date.
1.13 Impairment of Fixed Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
Company’s fixed assets. If any indication exists, an asset’s recoverable
amount is estimated. An impairment loss is recognised whenever the
carrying amount of an asset exceeds recoverable amount.
1.14 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the notes.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
2. AMALGAMATION
Parry Nutraceuticals Limited (PNL), a wholly owned subsidiary, was
amalgamated with the Company effective September 1, 2006 as per
the Order of the Hon’ble High Court of Madras, dated April 17, 2007.
PNL was carrying on the business of manufacture of natural food
supplements.The amalgamation has been accounted for under the
“pooling of interest” method as prescribed by the Accounting Standard
14 “Accounting for Amalgamations” issued by the Institute of Chartered
Accountants of India. In accordance with the scheme of amalgamation
sanctioned by the Hon’ble High Court of Madras, the assets, liabilities
and reserves of PNL as at September 1,2006 have been taken over
at their book value and Rs.35 lakhs being the excess of assets over
liabilities after adjusting the cost of investments of the Company in the
amalgamating company has been debited to the General Reserve.
3. SECURED LOANS
Term Loans and Cash Credit
i) Loan from Sugar Development Fund (Government of India)
for modernisation/expansion/Cogeneration amounting to
Rs.1832 lakhs is secured by an exclusive second charge on the
whole of the movable properties including plant and machinery
(save and except book debts) relating to Pugalur sugar unit and
further secured by an exclusive second charge on the immovable
properties of the Pugalur sugar unit by way of an equitable
mortgage to the extent of Rs.81 lakhs and by way of a Bank
Guarantee from State Bank of India to the extent of Rs.1751 lakhs.
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS

ii) Working Capital facilities from State Bank of India and guarantee
given by it in respect of the Sugar Development Fund Loan
amounting to Rs.233 lakhs from Government of India are secured
by hypothecation of sugar and other stocks, stores, book debts
and liquid assets and further secured by a second charge over
the immovable properties of the Company (other than Pugalur)
and a third charge on the movable and immovable properties of
the Pugalur sugar unit.
iv) The Rupee term loan from HDFC Bank Limited amounting to
Rs.2500 lakhs is secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other
movable assets both present and future situated at Pugalur and
Pudukottai and further secured by a pari passu first charge on
the immovable properties both present and future situated at
Pugalur and Pudukottai.

iii) The Rupee term loan from BNP Paribas amounting to
Rs.5000 lakhs is secured by a pari passu first charge by way of
hypothecation of all movable fixed assets, both present and future
situated at Cuddalore, Nellikuppam and Pudukottai and further
secured by a pari passu first charge on the immovable properties
both present and future situated at Cuddalore, Nellikuppam and
Pudukottai.
v) The corporate / term loan from State Bank of India amounting to
Rs.10000 lakhs is secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other
movable assets both present and future situated at Nellikuppam,
Pugalur and Pudukottai and further secured by a pari passu first
charge on the immovable properties situated at Nellikuppam,
Pugalur and Pudukottai.

2007 2006
Rs.Lakhs Rs.Lakhs

4. a) Estimated amount of contracts remaining to be executed on capital account and not provided for 9280 4667
b) Claims for excise duty under dispute in respect of fixed assets Nil 77

5. Other monies for which the Company is contingently liable

(a) Letters of Credit & Bank Guarantees established for purchases of Raw Materials, Spares and Capital
Goods and for financing a subsidiary 5325 1110
(b) Income Tax demands contested for which no Provision has been made 526 1974

(c) Claims against the Company for Sales Tax, Excise Duty and others including Industrial Disputes not
acknowledged as Debt and not provided for 563 483

(d) Certain Industrial Disputes are pending before Tribunal / High Courts. No provision has been made in the
accounts as the liability of the Company in respect of these disputes depends upon the final outcome of
such cases and the quantum of which is not currently ascertainable.
(e) The Statutory Minimum Price of sugar cane for the sugar year 2002-03 notified on December 12, 2002 at 1115 826
Rs.645/MT was increased to Rs.695/MT on January 9, 2003. Since the increase was arbitrary the same was
legally challenged by the South Indian Sugar Mills Association (of which the Company is a member) and the
matter is pending before the Hon’ble Supreme Court of India. Based on legal advice, pending disposal of cases,
no provision has been considered in the Accounts.
The Statutory Minimum Price of sugar cane for the sugar year 2003-04 was fixed at Rs. 730/MT, which was
challenged by the South Indian Sugar Mills Association and the matter is pending before the Hon’ble High Court
of Madras. Pending disposal of cases, no provision has been considered in the Accounts.
(f) The Company had an opening export obligation of 73,841 MT arising out of raw sugar imported against Advance
licences in earlier years. No fresh raw sugar imports were made during the year and hence no additional export
obligation has arisen. Balance export obligations out of the opening export obligations of 73,841 MT is 23,160
MT as on 31st March, 2007. The time limit for export of this balance obligation quantity is up to February, 2008.

52
Schedules forming part of Accounts
Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS

2007 2006
Rs. Lakhs Rs. Lakhs

6. Capital advances included in Loans and Advances 1815 1062

7. Exchange difference
a) Debited to Profit and Loss account 80 248
b) in respect of forward exchange contracts to be accounted in the subsequent period Nil 25

8. Sundry creditors under Schedule 11 include amount due to Small Scale Industrial undertaking (SSI) as per information
available with the Company. There are no dues to SSIs which are outstanding for more than 30 days. Based on the Nil Nil
information available with the Company, there are no dues outstanding to Micro and Small Enterprises as defined
under Micro, Small and Medium Enterprises Development Act, 2006 for more than 45 days as at March 31, 2007.

9. The Company has adopted Accounting Standard-15 (Revised 2005) “Employee Benefits” effective from 1st April
2006. Pursuant to this, the Company has reassessed its liability on various employee benefits as on that date and the
additional liability arising thereon amounting to Rs. 420 lakhs (net of tax expense of Rs. 88 lakhs) has been adjusted
against General Reserve in accordance with the transitional provisions in the Standard. Further, as a result of this
change, the charge to profit & loss account for the year is higher by Rs. 56 Lakhs.

The following table sets forth the status of the Gratuity Plan of the Company, which are wholly funded and the
amounts recognised in the Balance Sheet and Profit and Loss Account.

Particulars 2007
Rs. Lakhs
Present Value of obligations at the beginning of the period 546
Current service cost 14
Interest cost 43
Actuarial loss/(gain) 66
Benefits paid (65)
Present Value of obligations at the end of the period 604
Amounts recognised in the balance sheet
Projected benefit obligation at the end of the period 604
Fair value of plan assets at end of the period 714
Funded status of the plans – (asset)/ liability (110)
recognised in the balance sheet
Cost for the period
Current service cost 14
Interest cost 43
Expected return on plan assets (48)
Net actuarial (gain)/loss recognised in the period 36
Net cost 45
Assumptions
Discount rate 7.50%
Expected rate of salary increases 3.50%
Note : This being the first year of disclosure, previous year figures have not been furnished.

53
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS

2007 2006
Rs. Lakhs Rs. Lakhs
10. Total Excise Duty on Sales for the year has been disclosed as reduction from the turnover.
Excise duty related to the difference between the closing stock and opening stock has been
included in Schedule 17 “ Other Costs”.
11. Depreciation for the year includes Rs.114 Lakhs being the extra charge on account of change in
estimated useful life of certain classes of assets.
12. Rates & Taxes included in Raw material consumption 3374 2366
13. Revenue expenses on Research and Development included under various heads of accounts. 423 355
14. General Manufacturing, Selling and Administration expenses include an amount of donation
made to a political party. 5 Nil
15. Repairs and maintenance includes Stores and spare parts consumed 1349 1126
16. Auditors’ remuneration and Expenses:
i) Audit fees 8 8
ii) Tax Audit 2 2
iii) Fees for other services 10 7
iv) Reimbursement of out of pocket expenses 2 2
22 19@
@ Includes paid to Branch auditor Nil 1

17. Directors’ Remuneration:

17.1 Whole time Directors

Salaries and Allowances 56 46
Contribution to Provident and other Funds 7 6
Other Benefits 20 16
Commission 22 22
105 90
17.2 Non Whole time Directors:
Commission to Non Whole Time Directors 15 18
Directors’ Sitting Fees 9 9
24 27

17.3 Computation of Directors Commission

Profit as per Profit & Loss Account: 17033 14112
Add:
Directors’ Sitting Fees 9 9
Whole Time Directors’ Remuneration including Commission / Non Whole Time Directors’ Commission 120 108
Provision for Doubtful Debts/ Advances 10 46
Voluntary Separation Scheme 111 111
17283 14386

54
Schedules forming part of Accounts
Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS

2007 2006
Rs. Lakhs Lakhs
Less:
Provision for Deferred Repairs/Doubtful Debts / Advances/Contingencies Written back (Net) 22 35
Profit on sale of Fixed Assets as per books (Net) 5 365
Profit on sale of Investments (Net) 11812 2285
11839 2685
Profit as per Section 349 5444 11701
Commission to Whole Time Director restricted to 22 22
Commission at 1% on the profit as per Section 349 54 117
Commission at 1% as above for Non-Whole Time Directors restricted to 15 18
18. Provision for Tax and Deferred Tax
(a) Provision for Tax amounting to Rs. 1680 lakhs has been made under the provisions of Section
115JB of the Income Tax Act, 1961 and MAT Credit has been taken to the extent of Rs. 61 lakhs,
being the difference between the tax computed under Section 115JB and the tax payable based on
the computation under the provisions other than Section 115JB.
(b) Break up of Net Deferred Tax Liability is as under 2007 2006
Deferred Tax Deferred Tax
Liability/(Asset) Liability/(Asset)
Rs. Lakhs Rs. Lakhs
Difference between tax and book written down value of fixed assets 7531 4847
Debited on account of AS-15 (Revised) Transitional provision (88) -
Others (76) (46)
Net Deferred Tax Liability 7367 4801
19. Earnings per share:
Profit after tax as per Profit and Loss Account - Rs. Lakhs 12742 11584
Number of Equity shares of Rs. 2 each outstanding at the begining of the year (2006 - Rs. 10) 8,92,48,515 1,78,49,703
Number of Equity shares of Rs. 2 each outstanding at end of the year 8,92,48,515 8,92,48,515
Earnings per Share - Basic and Diluted (Rs.) 14.28 12.98
20. Segment Reporting as at March 31, 2007
Composition of Business Segments
Primary Segments
Sugar Bio products Others
Sugar, Chemicals and Power Neem, Organic Manure and Nutraceuticals Corporate
Secondary Segments
North America Europe Rest of the World India
Inter Segment Transfer Pricing:
Inter Segment prices are normally negotiated amongst the segments with reference to cost, market prices and business risks, within an overall optimisation
objective for the enterprise.

55
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS
Primary Segments Rs. Lakhs

Sugar Parryware Bio Products Others Elimination Overall

2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
Revenue (Sales/Income): 11 Months ended
28.02.2006

(Gross of Excise Duty)

External Customers 55592 72463 – 23248 3747 2566 728 972 60067 99249
Inter-segmental Sales 958 451 – – – – – – (958) (451)
Total 56550 72914 – 23248 3747 2566 728 972 (958) (451) 60067 99249
Results :
Operating Profit/(Loss) 3080 7967 – 2962 423 421 (483) (294) 3020 11056
Profit on Sale of Investments 11812 2285
Dividend Income 1990 1510
Interest Expenses (Net) 211 (739)
Profit before Tax 17033 14112
Income Tax - Current
(Net of MAT Credit) (1619) (2650)
- Deferred (2615) 275
- Fringe Benefit Tax (57) (153)
Net Profit 12742 11584
Other Information :
Segment Assets 71265 54377 – – 6479 3340 29227 28765 106971 86482
Unallocated Corporate Assets 12875 12678
Total Assets 119846 99160
Segment Liabilities 19838 14295 – – 356 98 3380 6358 23574 20751
Unallocated Corporate Liabilities 42603 29681
Shareholders’ Funds 53669 48728
Total Liabilities 119846 99160
Capital Expenditure 16123 11026 – 752 772 119 383 90 17278 11987
Depreciation 2684 1942 – 561 267 208 336 204 3287 2915
Non-cash expenditure 94 124 – 29 1 – 39 27 134 180
(excluding Depreciation)

Secondary Segments
North America Europe Rest of the World India Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
Segment Revenue 1469 1160 848 13504 984 643 56766 83942 60067 99249
Carrying Amounts of :
Segment Assets 954 565 212 4045 189 62 118491 94488 119846 99160
Segment Liabilities 119846 99160 119846 99160
Capital Expenditure 17278 11987 17278 11987

56
Schedules forming part of Accounts
Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS

21. Related Party Disclosures for the year ended March 31, 2007
List of related Parties :
21.1 Subsidiary Companies
1. Coromandel Fertilisers Limited
2. Parry Chemicals Limited
3. Parry America Inc.
4. Parrys Investments Limited
5. Coromandel Bathware Limited
6. Parrys Sugar Limited
7. Parry Infrastructure Company Private Limited
Associates/Joint Venture Companies
1. Parryware Roca Private Limited (formerly Parryware Glamourooms Private Limited)
2. Parry Monsanto Seeds Private Limited
3. Godavari Fertilisers and Chemicals Limited
4. Prathyusha Chemicals and Fertilisers Limited
5. Silkroad Sugar Private Limited (formerly Parrys Sugars Refineries Private Limited)
21.2 Key Management Personnel (KMP)
Mr.P.Rama Babu, Managing Director
21.3 Transactions with related parties Rs. Lakhs
2007 2006
Subsidiary Associates/ KMP Subsidiary Associates/ KMP
Companies Joint Companies Joint
Ventures Venture
Sale of Goods 1281 1104
Rendering of services 42 250 95
Receiving of services 1
Dividend Income 1491 196 1316 106
Interest Income 34 3
Deputation Charges Received 104 24
Purchase/Receipt of Goods 34 57 2887
Letter of Credit Established 446
Subscription to Equity Shares 363
Inter Corporate Deposits - Given/Repaid 3120 940
Closing Balance - Debit 900 20 17613 2

For remuneration to KMP refer Note 17.1 above.

57
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS

22. Details of Interest of the Company in Joint Venture: Rs. Lakhs

Name of the Joint Venture entity Country of Incorporation Principal Activities Ownership interest Original cost of Investment
Parry Monsanto Seeds Private India Development, Production 49% 246
Limited & Marketing of hybrid
seed varieties
Parryware Roca Private Limited India Manufacture and trading 50% 106
of Sanitaryware
Silkroad Sugar Private Limited India Manufacture of Sugar 50% 362

Aggregate amounts related to interest in Joint Venture Entities:

Parry Monsanto Parry Monsanto Parryware Parryware Silkroad Sugar
Seeds Private Seeds Private Roca Private Roca Private Private
Limited Limited Limited Limited Limited
2007 2006 2007 2006 2007*
Assets 583 607 12273 10954 364
Liabilities 234 316 2325 10285 1
Income 808 866 13988 5602 –
Expenditure 611 651 13049 6143 –
Profit after Tax 197 215 939 (541) –

*Note: This being the first year of operations for the Company, Profit and Loss Account has not been drawn by the Company.

23. Disputed Statutory dues:

The following dues have not been deposited on account of a dispute

Sl No Name of the Statute Nature of Dues Rs. Lakhs Rs. Lakhs Forum where the dispute is
2007 2006 pending
1. Central Excise Act, 1944 Excise Duty 569 570 Assistant Commissioner / Deputy
Commissioner, Commissioner, CESTAT
2. Finance Act, 1994 (Service Tax) Service Tax dues 9 1 Commissioner (Appeals)
3. Customs Act, 1962 Customs Duty Nil 77 Deputy Commissioner
4. Various State Sales Tax Acts Sales Tax Local 153 160 Assistant Commissioner / Deputy
Commissioner, Tribunal
5. Central Sales Tax Act, 1956 Sales Tax CST 29 27 Assistant Commissioner / Deputy
Commissioner, Tribunal, High Court
6. Tamil Nadu General Sales Tax TNGST Act 12 Nil Assistant Commissioner/ Deputy
Act, 1959 Commissioner, Tribunal, High Court
7. Income Tax Act, 1961 Income Tax 82 210 Income Tax Appellate Tribunal

58
Schedules forming part of Accounts
Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS

24. Licensed/installed capacities and production details for the year ended March 31, 2007 (As Certified by the Management)
LICENSED INSTALLED ACTUAL
CAPACITY CAPACITY PRODUCTION
CLASSES OF GOODS ** UNIT 2007 2006 2007 2006 2007 2006
Sugar CANE MT/DAY NA NA 16,500 14,500 380,718 304,953
Spirit KLTS/YEAR NA NA 13,500 13,500 10,673 9,694
Sanitaryware MT/YEAR NA NA Nil 34,500 Nil 30,414
Power KWH NA NA 64,500 42,500 248,533,452 147,541,619
Neem Technicals KGS/YEAR NA NA 7,500 7,500 5,333 5,552
Algae KGS/YEAR NA NA 524,100 Nil 74,415 Nil

** Details furnished only in terms of Finished products

NA-Not applicable. These products are not covered by the list of Industries in respect of which industrial licensing is compulsory.
25. Particulars in respect of Finished Goods Stock
OPENING STOCK CLOSING STOCK
2007 2006 2007 2006
CLASSES OF GOODS QTY VALUE QTY VALUE QTY VALUE QTY VALUE
Rs. Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs
Sugar MT 2091 338 78056 11,090 101937 14,687 2091 338
Sanitaryware and Fittings Nil — 1,980 Nil — Nil
Others 1189 1,406 1,805 1,189
1527 14,476 16,492 1,527

Closing stock excludes excess / shortages including damaged stocks.

26. Particulars in respect of Finished Goods – Purchases and Sales

PURCHASES SALES
2007 2006 2007 2006
CLASSES OF GOODS QTY VALUE QTY VALUE QTY VALUE QTY VALUE
Rs. Lakhs Rs. Lakhs Rs. Lakhs Rs. Lakhs
Sugar 266306 46,740 380833 65,212
Sanitaryware and Fittings Nil 7,160 Nil 23,153
Others including services 299 25 11,583 9,481
299 7,185 58,323 97,846

27. Analysis of raw materials consumed

2007 2006
DESCRIPTION UNIT QTY Value QTY Value
Rs. Lakhs Rs. Lakhs
Sugarcane MT 4093000 47,277 2596519 26,983
Raw Sugar MT 1538 187 83368 9,974
Others 1,053 2,405
48,517 39,362

59
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Accounts

Rs. Lakhs
SCHEDULE 19 (Contd.)
NOTES ON ACCOUNTS

28. Value of imported Raw materials and stores and spare parts consumed and the value of all indigenous raw materials
and stores and spare parts similarly consumed and percentage of each to total consumption
2007 2006
Rs. Lakhs % Rs. Lakhs %
Imported 230 Nil 10017 24
Indigenous 50914 100 31738 76
51144 100 41755 100
Raw Materials 48517 39362
Stores and Spare Parts 2627 2393
51144 41755

29. Value of Imports on C.I.F basis

Raw Materials Nil 8909
Components, Stores and Spare Parts 49 32
Traded Goods 54 35
Capital Goods 27 10
130 8986

30. Expenditure in Foreign Currency

Travel 40 38
Interest 123 408
Professional Fee 18 35
Others 164 125
345 606

31. Earnings in Foreign Exchange

FOB Value of Exports 3273 15289
Other Income—Despatch Money 40 18
3313 15307

32. Remittances in foreign currencies of dividends

to non resident shareholders of the Company
Equity Equity
Shares Shares
No.of Shareholders 42 42
No. of Shares held 3180605 3429305
Net amount remitted (Rs. lakhs) 286 86

60
Schedules forming part of Accounts
Rs. Lakhs
SCHEDULE 19 (Contd.)
33. Balance Sheet abstract and Company's general business profile as per Part IV to Schedule VI to the Companies Act, 1956.
Particulars
I Registration Details
Registration No. 6989
State Code 18
Balance Sheet Date March 31, 2007
II Capital raised during the year (Amount in Rupees Thousand)
Public Issue NIL
Rights Issue NIL
Bonus Issue NIL
Private Placement NIL
III Position of Mobilisation and Deployment of funds :
(Amount in Rupees Thousand)
Total Liabilities 1,19,84,575
Total Assets 1,19,84,575
Sources of Funds:
Paid-up Capital 17,84,97
Reserves and Surplus 51,88,391
Secured Loans 22,21,242
Unsecured Loans 13,02,367
Deferred Tax liability 7,36,744
Application of Funds:
Net Fixed Assets 48,86,576
Investments 11,73,645
Net Current Assets 35,61,623
Miscellaneous Expenditure 5,397
IV Performance of the Company :
(Amount in Rupees Thousand)
Turnover (including other income) 70,71,804
Total Expenditure 53,68,494
Profit / (Loss) before tax 17,03,309
Profit / (Loss) after tax 12,74,210
Earnings Per Share (Rs.) 14.28
Dividend Rate (%) 295
V Generic Names of principal products of the Company
Item Code No. (ITC Code) 170111.00
Product Description Sugar
Item Code No. (ITC Code) 380810
Product Description Insecticides
Item Code No. (ITC Code) 12122009
Product Description Algae
34. Previous year's figures include the figures of erstwhile Parryware division for a period of 11 months and the Current Year’s figures include the figures of
erstwhile Parry Nutraceuticals Limited for a period of 7 months and hence strictly not comparable.
35. Previous year’s figures have been regrouped to conform to the presentation of Current year’s accounts.

On behalf of the Board

Chennai G. JALAJA D. KUMARASWAMY P. RAMA BABU A.VELLAYAN

May 4, 2007 Secretary Chief Financial Officer Managing Director Chairman

61
E.I.D. - PARRY (INDIA) LIMITED

Consolidated
Financial Statements

62
Auditors’ Report to the Board of Directors of E.I.D. - Parry (India) Limited on the Consolidated Financial Statements of
E.I.D. - Parry (India) Limited and its Subsidiaries, Associates and Joint Ventures
1. We have audited the attached Consolidated Balance Sheet of E.I.D.Parry
(India) Limited and its subsidiaries Coromandel Fertilisers Limited and
its subsidiaries and associates, Parry America Inc., Parry Infrastructure
Company Private Limited, Parrys Sugar Limited, Coromandel Bathware
Limited, Parrys Investments Limited and its Joint Venture Parry Monsanto
Seeds Private Limited, Silkroad Sugar Private Limited (formerly Parrys
Sugars Refineries Private Limited) and Parryware Roca Private Limited
(formerly Parryware Glamourooms Private Limited) as at 31st March,
2007 and also the Consolidated Profit and Loss Account and the
consolidated cash flow statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of E.I.D.Parry
(India) Limited's management and have been prepared by the
management on the basis of separate financial statements and other
financial information regarding components. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes, examining
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
3. We did not audit the financial statements of subsidiary companies
viz.,Coromandel Fertilisers Limited and its subsidiaries and associates,
Parry America Inc., Coromandel Bathware Limited, Parry Infrastructure
Company Private Limited, Parrys Investments Limited, Parrys Sugar
Limited, and its Joint Venture Parry Monsanto Seeds Private Limited
and Parryware Roca Private Limited (formerly Parryware Glamourooms
Private Limited), whose financial statements reflect total assets of
Rs.187,117 lakhs as at 31.3.2007, the total revenues of
Rs.222,550 lakhs and cash flows amounting to Rs.14,087 lakhs for the
year then ended. These financial statements and other financial
information have been audited by other auditors whose reports have
been furnished to us, and our opinion, is based solely on the report of
63
the other auditors. As stated in Note 14 in Schedule 18 to the consolidated
financial statements, the valuation of investments in Joint Venture
Companies have been done based on un-audited financial statements.
4. Attention is invited to Note No. 4 of Schedule 18 regarding accrual of
subsidy amounting to Rs.3261.81 lakhs for the period July 1, 2006 to
March 31, 2007 based on management estimates pending final
announcement by the Government of India.
5. We report that the consolidated financial statements have been prepared
by the Company in accordance with the requirements of Accounting
Standard (AS) 21, Consolidated Financial Statements, Accounting
Standard (AS) 23, Accounting for Investments in Associates in
Consolidated Financial Statements, and Accounting Standard (AS) 27,
Financial Reporting of Interests in Joint Ventures, issued by the Institute
of Chartered Accountants of India.
6. Based on our audit and on consideration of reports of other auditors on
separate financial statements and on the other financial information of
the components, and to the best of our information and according to the
explanations given to us, we are of the opinion that the attached
consolidated financial statements read with paragraph 4 (a) above give
a true and fair view in conformity with the accounting principles generally
accepted in India:
(a) In the case of Consolidated Balance Sheet, the state of affairs of
E.I.D.-Parry (India) Limited and its subsidiaries, associates and Joint
Ventures as at 31st March, 2007; and
(b) In the case of Consolidated Profit and Loss Account, of the profit for
the year ended on that date; and
(c) In the case of Consolidated Cash Flow Statement, of the cash flows
for the year ended on that date.
For Deloitte Haskins & Sells
Chartered Accountants
Geetha Suryanarayanan
Chennai Partner
May 4, 2007 Membership No. 29519
 E.I.D. - PARRY (INDIA) LIMITED

Consolidated Balance Sheet As at March 31, 2007

Schedule As at As at
March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs

I. SOURCES OF FUNDS
1. SHAREHOLDERS’ FUNDS:
(a) ShareCapital 1 1785 1785
(b) Reserves and Surplus 2 86146 64719
(c) Capital Suspense 16 –
(d) Capital Reserve on Consolidation 5183 93130 5183 71687
2. MINORITY INTEREST 17051 14257
3. LOAN FUNDS:
(a) Secured Loans 3 48856 44217
(b) Unsecured Loans 4 41381 90237 23624 67841
4. DEFERRED TAX LIABILITY (Net) 15371 13508
TOTAL 215789 167293
II. APPLICATION OF FUNDS
1. FIXED ASSETS: 5
(a) Gross Block 146585 129938
(b) Less: Depreciation 61051 54579
Net Block 85534 75359
(c) Share in Joint Ventures 6870 8
(d) Capital Work-in-Progress at cost 2078 94482 5575 80942
2. INVESTMENTS 6 23952 20912
3. CURRENT ASSETS, LOANS AND ADVANCES :
(a) Inventories 7 61195 46816
(b) Sundry Debtors 8 25507 26194
(c) Cash and Bank Balances 9 42935 13347
(d) Other Current Assets - Interest Accrued 238 118
(e) Loans and Advances 10 50584 57748
180459 144223
Less :
CURRENT LIABILITIES AND PROVISIONS :
(a) Liabilities 11 78080 70524
(b) Provisions 12 5082 8425
83162 78949
NET CURRENT ASSETS 97297 65274
4. MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) 58 165
TOTAL 215789 167293
NOTES ON ACCOUNTS 18
The schedules referred to above form an integral part of these accounts
This is the Balance Sheet referred to in our Report of even date
For Deloitte Haskins & Sells On behalf of the Board
Chartered Accountants

A. VELLAYAN
Chairman
Geetha Suryanarayanan
Partner
Membership No.29519 G. JALAJA D. KUMARASWAMY P. RAMA BABU
Chennai Secretary Chief Financial Officer Managing Director
May 4, 2007

64
Consolidated Profit and Loss Account For the year ended March 31, 2007

Year ended Year ended

Schedule March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs
Income :
Sales and Services 268812 297530
Less : Excise Duty (6813) (9013)
Add : Sales - Share in Joint Ventures 14149 276148 720 289237
Other Income 13 15818 5227
291966 294464
Expenditure :
Materials 14 187199 202217
Employee Cost 15 12469 11118
Other Costs 16 50286 46524
Depreciation 7727 6681
Interest 17 2809 2199
260490 268739
PROFIT BEFORE TAX 31476 25725
Less : Provision for Tax
– Current 6897 7225
– MAT Credit Entitlement (61) –
– Deferred 2776 (244)
– Fringe Benefit Tax 171 275
– Excess Tax provision written back (288) 9495 (204) 7052
PROFIT AFTER TAX 21981 18673
Share of Associates Profit 1598 1065
Minority Interest (3523) (2588)
20056 17150
Balance brought forward 9342 6047
Surplus brought forward from Amalgamation of Parry Nutraceuticals Limited (1290) –
Surplus brought forward from Amalgamation & Coromandel Bathware Limited – (162)
Balance brought forward- Share in Joint Venture 61 –
Amount Available for Appropriation 28169 23035
APPROPRIATIONS:
Interim Dividend paid on Equity Share Capital 4139 98
Proposed Dividend on Equity Share Capital 2212 4684
Dividend Tax 1257 881
Transferred to General Reserve 9595 8030
Transferred to Debenture Redemption Reserve 311 –
Balance Carried to Balance Sheet 10655 9342
28169 23035
Earnings per Share-Basic and Diluted - in Rs. (Face Value Rs.2) 22.47 19.22
(2006-Face value Rs.2; EPS: Rs.19.22) Note 12 of Schedule 18
NOTES ON ACCOUNTS 18
The schedules referred to above form an integral part of these accounts
This is the Profit & Loss Account referred to in our Report of even date
For Deloitte Haskins & Sells On behalf of the Board
Chartered Accountants

A. VELLAYAN
Chairman
Geetha Suryanarayanan
Partner
Membership No.29519 G. JALAJA D. KUMARASWAMY P. RAMA BABU
Chennai Secretary Chief Financial Officer Managing Director
May 4, 2007

65
 E.I.D. - PARRY (INDIA) LIMITED

Consolidated Cash Flow Statement for the year ended March 31, 2007

Year ended Year ended

March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs

A. CASH FLOW FROM OPERATING ACTIVITIES

Net profit before tax 31476 25725
Adjustments for :
Depreciation 7727 6681
Interest expense (net) 2809 2199
Investment income (513) (401)
(Profit) / loss on sale of fixed assets 170 59
(Profit) / loss on sale of investments (net) (11842) (2286)
Preoperative Expenses (4) –
Payment under voluntary separation scheme – (17)
Other non cash items (924) (2577) 220 6455
Operating profit before working capital changes 28899 32180
Adjustments for (increase)/decrease in:
Trade and other receivables 4149 (22822)
Inventories (14582) (2572)
Current liabilities 4664 27939
Net current assets trfd on sale/amalgamation – (5769) (6972) (4427)
Cash generated from operations 23130 27753
Direct taxes paid net of refund (9472) (5480)
Net cash flow from operating activities 13658 22273
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets (26580) (28573)
Proceeds on sale of fixed assets 185 601
Proceeds on sale of business 16066 –
Purchase of investments (2779) (23571)
Investments in subsidiary companies (1652) (2857)
Sale of Investments 12335 25391
Interest received 1837 571
Grant received/Inter Corp Deposits 1650 –
Investment income 832 (42)
Net Cash flow from investing activities 1894 (28480)

66
Consolidated Cash Flow Statement for the year ended March 31, 2007

Year ended Year ended

March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of share capital 9212 –
Proceeds from long term borrowings 11233 13511
Repayment of long term borrowings (8950) (2290)
Proceeds from other term borrowings (net) 10798 6273
Change in working capital finance 6372 (2254)
Interest paid (4662) (3437)
Dividends paid (9127) (3192)

Net cash flow from financing activities 14876 8611

NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 30428 2404
Cash and cash equivalents as at 1st April 12507 10943
Cash and cash equivalents as at 31st March 42935 13347

Note :
1. Cash and cash equivalents as at 1st April, 2006,
a. excludes Rs.980 lakhs relating to Parryware Glamourooms Pvt. Ltd. being a Joint Venture between the Company and
Roca Sanitario SA on 50:50 basis.
b. includes Rs. 119 lakhs of Ficom Organics Ltd. and Rasilah Investments Limited on their amalgamation with
Coromandel Fertilisers Ltd, subsidiary of EID Parry.
c. includes Rs. 21 lakhs of Parry Nutraceuticals Ltd. on amalgamation with the Company during the year.

This is the Cash Flow Statement referred to in our report of even date

For Deloitte Haskins & Sells On behalf of the Board

Chartered Accountants

A. VELLAYAN
Chairman
Geetha Suryanarayanan
Partner
Membership No.29519 G. JALAJA D. KUMARASWAMY P. RAMA BABU
Chennai Secretary Chief Financial Officer Managing Director
May 4, 2007

67
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Consolidated Accounts

As at As at
March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs
SCHEDULE 1
SHARE CAPITAL :
AUTHORISED :
Preference Shares:
50,00,000 Redeemable Preference Shares of Rs.100 each 5000 5000
Equity Shares:
25,75,00,000 Equity Shares of Rs.2 each 5150 5150
(2006 - 25,75,00,000 Equity shares of Rs. 2 each)
10150 10150
ISSUED AND SUBSCRIBED
8,92,48,515 Equity Shares of Rs.2 each fully paid up 1785 1785
(2006 - 8,92,48,515 Equity shares of Rs 2 each)
1785 1785

Of the above 3,44,74,295 Equity Shares of Rs. 2 each have been allotted as fully paid up for consideration other than cash.
SCHEDULE 2
RESERVES AND SURPLUS: Rs. Lakhs
As at As at
Additions Deductions
March 31, 2006 March 31, 2007
CAPITAL RESERVES
Capital Subsidy 11 – – 11
Capital Reserve 1348 890 – 2238
Capital Redemption Reserve 3536 – – 3536
Fixed Assets Revaluation Reserve (Note 1 ) 624 – 14 610
Securities Premium Account 14098 8670 – 22768
Debenture Redemption Reserve 1304 311 – 1615
20921 9871 14 30778
REVENUE RESERVES
Statutory Reserve 2 – – 2
Pre acquisition Reserve 6889 – – 6889
Investment Fluctuation Reserve 1400 – – 1400
General Reserve (Note 2) 49363 12188 962 60589
Profit and Loss Account balance 9342 1313 – 10655
Adjustments on Consolidation as per AS-21/23/27 ( Note 3) (23198) (969) – (24167)
64719 22403 976 86146
Note :
1. Deduction during the year represents Rs.14 lakhs transferred to profit and loss account.
2. Addition during the year includes adjustment for prior year dividend received Rs.1491 lakhs.
3. Detailed Break up of Adjustments
Transfer to Capital Reserve on Consolidation (5183) (5183)
Effect on conversion of subsidiary into JV – 788
Transfer to minority interest (10882) (12741)
Adjusted as Pre-acquisition Reserve (7142) (7142)
Share of Pre/Post-acquisition Reserves in Associates 8 111
Share in Joint Venture 1 –
(23198) (24167)

68
Schedules forming part of Consolidated Accounts

As at As at
March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs

SCHEDULE 3
SECURED LOANS:
(a) Debentures 7500 7500
(b) Term Loans from:
i) Government of India -Sugar Development Fund 2033 369
ii) Financial Institutions – 93
iii) Banks 31796 28584
33829 29046
(c) Cash Credit from Banks 7527 7671
48856 44217
SCHEDULE 4
UNSECURED LOANS:
(a) Fixed Deposits – 17
(b) Short Term loan from Banks 24780 18445
(c) Sales Tax Deferral Scheme 63 –
(d) Other than Banks
- Short term 13000 1500
- Others 3538 3662
16538 5162
41381 23624
SCHEDULE 5
FIXED ASSETS : Rs. Lakhs

GROSS BLOCK DEPRECIATION NET BLOCK

Cost/Value Additions Additions Dele- Cost/ As at Additions For the With- As at As at As at
As at on tions/ Value 31-03-06 on Year drawn/ 31-03-07 31-03-07 31-03-06
31-03-06 Amalga- Adjust- As at Amalga- Adjust-
mation ments 31-03-07 mation ments
Leasehold Land 1862 451 – 661 1652 103 – 25 1 127 1525 1759
Freehold Land 2636 24 571 162 3069 – – – – – 3069 2636
Buildings (Note 1 & 2) 13486 423 1952 1561 14300 3295 15 328 9 3629 10671 10191
Railway Siding 471 – 33 – 504 206 – 24 – 230 274 265
Plant and Machinery 105547 2933 17734 5372 120842 48003 96 6141 645 53595 67247 57544
Furniture and
Office Equipments 4520 50 528 427 4671 2384 6 438 127 2701 1970 2136
Motor Vehicles 1175 41 432 342 1306 495 – 262 158 599 707 680
Patent 241 – – – 241 93 – 77 – 170 71 148
129938 3922 21250 8525 146585 54579 117 7295 940 61051 85534 75359
PREVIOUS YEAR 124035 – 21512 15609 129938 54961 – 6700 7082 54579
Capital Work-in-Progress 2078 5575
Add: Share in Joint Venture 6870 8
94482 80942

Notes:
1. Includes cost of 131 shares of Rs.100 each (2006 - Rs 0.13 Lakh) in Shri Siddhi Vinayak Co-operative Housing Society Limited.
2. Includes cost of Rs.31 Lakhs ( 2006 - Rs.31 Lakhs) for which title deeds are yet to be received from the Registrar.

69
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Consolidated Accounts

As at As at
March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs
SCHEDULE 6
INVESTMENTS :
Long Term
A) QUOTED (Fully Paid)
Trade - Equity Shares :
- Associates 17225 15483
[Capital Reserve/ (Goodwill) on acquisition of shares in Associates is Rs.10009 lakhs]
Others 12 9
Non-Trade - Equity Shares :
- Others 211 22
17448 15514

B) UNQUOTED (Fully Paid)

Trade - Equity Shares :
- Associates – 393
[Capital Reserve/ (Goodwill) on acquisition of shares in Associates - Rs.234 lakhs]
Others 4056 2716
Non-Trade - Equity Shares :
- Others 332 432
4388 3541

C) NON-TRADE - OTHERS
Others 2 726
2 726
D) Mutual Funds - Unquoted 993 –
E) Government Securities 1 1
F) Public sector Bonds 1120 1130
(A+B+C+D+E+F) 23952 20912
Market Value of Quoted Investments 17470 11934

SCHEDULE 7
INVENTORIES:
Raw Materials 18166 18940
Work-in-Progress 1496 1572
Finished Goods 36071 23180
55733 43692
Consumable Stores and Spares 3157 3119
Add : Share in Joint Ventures 2305 5
61195 46816

70
Schedules forming part of Consolidated Accounts

As at As at
March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs
SCHEDULE 8
SUNDRY DEBTORS:
Debts outstanding for a period exceeding six months:
Secured - Considered Good 78 53
Unsecured - Considered Good 1102 967
Unsecured - Considered Doubtful 743 817
1923 1837
Less: Provision for Doubtful Debts 743 1180 817 1020
Other Debts:
Secured - Considered Good 2074 1565
Unsecured - Considered Good 21343 23417 23588 25153
Add : Share in Joint Ventures 910 21
25507 26194

SCHEDULE 9
CASH AND BANK BALANCES:
Cash-in-hand and in-transit (including cheques on hand) 119 453
Balance with Scheduled Banks:
In Current Account 17274 3236
In Dividend Account 167 110
Short-term Deposit 24136 9484
Balance with other Banks:
In Current Account 6 4
Add : Share in Joint Ventures 1233 60
42935 13347

SCHEDULE 10
LOANS AND ADVANCES:
Unsecured and considered Good unless otherwise stated:
MAT Credit entitlement Account 61 –
Advance recoverable in cash or in kind or for value to be received
– Unsecured and Considered Good 49555 57722
– Considered Doubtful 103 120
49658 57842
Less: Provision for Doubtful Advances 103 49555 120 57722
Add : Share in Joint Ventures 968 26
50584 57748

71
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Consolidated Accounts

As at As at
March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs
SCHEDULE 11
LIABILITIES:
Sundry Creditors 68948 64548
Advances and Deposits 1918 1857
Due to Directors - Commission (Net) 35 37
Investor Education and Protection Fund
(a) Unpaid Dividend 203 110
(b) Unpaid Matured Deposits 2 7
(c) Unpaid Matured Debentures – 4
(d) Interest accrued on (a) to (c) above 3 208 4 125
Other Liabilities 3919 3075
Interest accrued but not due on loans 815 648
Add : Share in Joint Ventures 2237 234
78080 70524

SCHEDULE 12
PROVISIONS :
Provision for Tax (Net) 1003 2487
Deferred Repairs – 149
Proposed Dividend on Equity Shares - Final 2212 4684
Dividend Tax 647 867
Others 1068 236
Add: Share in Joint Ventures 152 2
5082 8425

Year ended Year ended

March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs

SCHEDULE 13
OTHER INCOME:
Profit on sale of Investments (Net) 11812 2286
Liabilities/Provisions no longer required written back 655 387
Investment Income 499 386
Sundry Income 2547 2022
Add : Share in Joint Ventures 305 146
15818 5227

72
Schedules forming part of Consolidated Accounts

Year ended Year ended

March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs
SCHEDULE 14
MATERIALS:
Raw Materials consumed 188151 168328
Purchase of Finished Goods 9104 27700
Purchase of Work-in-Progress 164
(Increase) / Decrease in Stocks
Opening Stock - Work-in-progress (Note No.2(c) of Sch 18) 1469 1476
- Finished Goods (Note No.2(c) of Sch 18) 20766 29063
22235 30539

Closing Stock - Work-in-progress 1496 1572

- Finished Goods 36071 23180
37567 (15332) 24752 5787

Add : Share in Joint Ventures 5276 238

187199 202217
SCHEDULE 15
EMPLOYEE COST :
Salaries, Wages and Bonus 8604 9001
Contribution to Provident and other Funds 843 842
Workmen and Staff Welfare Expenses 1134 1244
Add : Share in Joint Ventures 1888 31
12469 11118
SCHEDULE 16
OTHER COSTS :
Consumption of Stores 7429 6099
Power and Fuel 6782 9887
Rent 400 410
Repairs and Maintenance - Buildings 239 127
- Plant & Machinery 4667 4906 3984 4111
Insurance 558 604
Rates and Taxes (Net) 1955 1170
Packing, Despatching and Freight 14515 13577
Commission to Selling Agents 143 77
Rebates and Discounts 98 1025
Auditors’ Fees and Expenses 24 28
Directors’ Fees and Commission 55 58
Sales Promotion and Publicity 505 1537
Fixed Assets scrapped 3 11
Loss on sale of fixed assets 163 59
Provision for Doubtful Debts and Advances 66 190
Bad Debts/Advances written off 121 217
General Manufacturing, Selling and Administration Expenses 7156 7187
Add : Share in Joint Ventures 5407 277
50286 46524

73
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Consolidated Accounts

Year ended Year ended

March 31, 2007 March 31, 2006
Rs. Lakhs Rs. Lakhs
SCHEDULE 17
INTEREST :
Interest on
– Debentures 2258 1551
– Other Fixed Loans 971 669
– Others 1606 1666
Add : Share in Joint Ventures (39) 2
4796 3888
Less: Interest Income on loans and advances and others (Gross) 1987 1689
2809 2199
SCHEDULE 18
NOTES ON ACCOUNTS:

Statement of Significant Accounting Policies

1. a. Basis of Preparation of Financial Statement

The financial statements are prepared under the historical cost convention except so far as they relate to revaluation of certain land and buildings in
accordance with generally accepted accounting principles in India.

b. Principles of consolidation
i) The consolidated financial statements relate to E.I.D. - Parry (India) Limited ('the Company') and its Subsidiary Companies, Associates and Joint
Venture Companies. The consolidated financial statements have been prepared on the following basis.
The financial statements of the Company and its Subsidiaries have been prepared based on a line-by-line consolidation by adding together the book
values of like items of assets, liabilities, income and expenses as per the respective financial statements duly certified by the auditors of the
respective companies except in the case of Coromandel Bathware Limited, which is consolidated based on unaudited accounts. Intra-group balances
and intra-group transactions and the unrealised profits on stocks arising out of intra-group transactions have been eliminated.
Equity method of Accounting has been followed for Investments in Associates in accordance with AS 23- Accounting for Investments in Associates,
wherein Goodwill/ Capital Reserve arising at the time of acquisition and share of profit or losses after the date of acquisition has been adjusted in
investment value, based on the unaudited financial statements of the associates. Investors share in assets, liabilities, income and expenses as
appearing in the unaudited financial statements of the Joint Venture companies Parry Monsanto Seeds Private Ltd. and Silkroad Sugar Private Ltd.
and audited financial statements for Parryware Roca Private Limited have been included, as per AS 27 Financial Reporting of Interest in Joint
Venture.
The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar
circumstances except in the case of certain Subsidiaries and Associates the impact of which is not quantifiable.
The excess/lower of cost to the Company and its subsidiaries of their investments in their subsidiaries/fellow subsidiaries is recognised in the
financial statements as goodwill/capital reserve.

74
Schedules forming part of Consolidated Accounts
SCHEDULE 18 (Contd.)
ii) The Subsidiary Companies considered in the consolidated financial statements are :
Name of the Company Country of % of voting power % of voting power
incorporation held on held on
March 31, 2007 March 31, 2006
Direct Indirect Direct Indirect
Parry Chemicals Limited (PCHL) India 69.05 69.05
Parry America Inc. (PAI) USA 100.00 100.00
Coromandel Bathware Limited (CBL) India 99.99 99.99
Coromandel Fertilisers Limited (CFL) India 69.05 69.05
Parry Infrastructure Company Pvt Ltd (PICPL) India 100.00 –
Parrys Investments Limited (PIL) India 100.00 100.00
Parrys Sugar Limited (PSL) India 100.00 100.00
Parryware Roca Private Ltd. (PRPL) @ India – 100.00

The financial statement of Parry Chemicals (subsidiary) and GFCL ( Associate) of Coromandel Fertilisers Limited have been drawn up to
March 31, 2007 and those of Prathyusha Chemicals & Fertilisers Limited (PCFL) are for the year ended March 31,2006. Since the Group share of
losses in PCFL has exceeded the carrying amount of the investment in Coromandel Fertilisers Ltd, recognition of further losses has been discontinued
and the investment is reported at 'nil' value in the consolidated financial statement of Coromandel Fertilisers Ltd.

iii) Details of Interest in Joint Venture Companies

Name of the Company Country of % of voting power % of voting power

Incorporation held on held on
March 31, 2007 March 31, 2006
Parry Monsanto Seeds Private Limited (PMSL) India 49% 49%
Parryware Roca Private Limited (PRPL) @ India 50% –
Silkroad Sugar Private Limited (SSPL) India 50% 49%

@ became joint venture pursuant to agreement entered into with Roca Sanitario of Spain .

iv) Details of Investments in associates held by the Company directly or indirectly through its Subsidiaries : Rs. Lakhs
Name of the Associate Country Ownership Original Cost
of incorporation Interest % of Investments
Godavari Fertilisers & Chemicals Limited (GFCL) India 45.07 13418
Prathyusha Chemicals & Fertilisers Limited (PCFL) India 26.00 143
Total 13561

c. Other Significant Accounting Policies

These are set out in the notes to accounts under 'Significant Accounting Policies' of the financial statements of the Company and its subsidiaries
PCHL, PAI, CBL, CFL, PICPL, PIL and PSL , Associates GFCL and PCFL and PRPL, PMSL, and SSPL Joint Venture Companies.
2. AMALGAMATION
a. Amalgamation of Parry Nutraceuticals Ltd. (PNL) with the Company
Parry Nutraceuticals Limited (PNL) a wholly owned subsidiary was amalgamated with the Company effective September 1, 2006 as per the Order
of the Hon'ble High Court of Madras dated April 17, 2007. PNL was carrying on the business of manufacture of natural food supplements.The
amalgamation has been accounted for under the "pooling of interest" method as prescribed by the Accounting Standard 14 "Accounting for
Amalgamations" issued by the Institute of Chartered Accountants of India. In accordance with the scheme of amalgamation sanctioned by the
Hon'ble High Court of Madras, the assets, liabilities and reserves of PNL as at September 1,2006 have been taken over at their book value and

75
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Consolidated Accounts

SCHEDULE 18 (Contd.)

Rs 35 lakhs being the excess of assets over liabilities after adjusting the cost of investments of the Company in the amalgamating company has
been debited to the General Reserve.

b. Amalgamation of Ficom Organics Limited and its wholly owned subsidiary, Rasilah Investments Limited with Coromandel Fertilisers
Ltd, subsidiary of the Company
a) Pursuant to the Scheme of Amalgamation ('the Scheme') of the erstwhile Ficom Organics Limited ('Ficom') and its wholly owned subsidiary, Rasilah
Investments Limited (Rasilah) with Coromandel Fertilisers Ltd. (CFL)as approved by the Hon'ble High Courts of Judicature of Andhra Pradesh and
Bombay on 10th April, 2007 and 27th April, 2007, respectively, the entire business and undertaking of Ficom and Rasilah including all assets,
liabilities, duties and obligations have been transferred to and vested in CFL with effect from April 1, 2006. CFL is in the process of completing certain
formalities, (including filing of certified copies of the sanction/approvals of the Hon'ble High Courts with the Registrars of Companies, Maharashtra
and Andhra Pradesh) in this regard.
b) The operations of Ficom include manufacture and sale of agrochemicals of technical grade and pesticides. Rasilah is engaged in the business of
investment and finance.
c) The Amalgamation has been accounted for under the 'Purchase Method' as prescribed by Accounting Standard 14, "Accounting for Amalgamations",
issued by the Institute of Chartered Accountants of India. In accordance with the Scheme, the assets and liabilities of Ficom and Rasilah have been
taken over at their fair values determined by an independent valuer as on April 1, 2006 and Rs. 852.88 lakhs being the excess of the fair value of the
net assets over the consideration payable has been credited to the Capital Reserve in the books of CFL.
d) As per the Scheme, 3,140,567 Equity Shares of Rs. 10/- each of Ficom held by the Company and 91,000 Equity Shares of Rs. 10/- each of Rasilah
held by Ficom, stand cancelled.
e) In terms of the Scheme, CFL required to allot 831,981 Equity Shares of Rs. 2/- each as fully paid-up to the shareholders of Ficom in the proportion
of three fully paid-up Equity Shares of Rs. 2/- each of CFL for every eleven fully paid-up Equity Shares of Rs. 10/- each of Ficom.
f) Investments, assets, liabilities and licenses held in the name of erstwhile Ficom Organics Limited and erstwhile Rasilah Investments Limited are in
the process of being transferred in the name of CFL.
c. Opening Stock adjustment
Opening Stock as at April 1, 2006 includes Rs. 430 lakhs of Stock taken over, pursuant to the amalgamation of Ficom Organics Limited and Rasilah
Investments Limited with Coromandel Fertilisers Ltd. and Rs. 389 lakhs of stock taken over by EID Parry from Parry Nutraceuticals Ltd. (PNL) on
merger of PNL with EID Parry during the year. It excludes stock valuing Rs. 3336 lakhs pertaining to Parryware Roca Pvt Ltd, included in the closing
stock as at 31.03.2006 as subsidiary which became Joint Venture Company during the year 2006-07.

31.3.2007 31.3.2006
Rs. Lakhs Rs. Lakhs

3. a Estimated amount of contracts remaining to be executed 10055 6600

on capital account and not provided for
b. Commitment towards Investments * 17445 Nil
c. Claims for Excise duty/stamp duty under dispute in Nil 77
respect of fixed assets
d. Obligations for duty free imports under EPCG Scheme 143 –

* Includes Rs.14329 lakhs, pursuant to the Share Purchase Agreement with Indian Farmers Fertilisers Co-operative Limited (IFFCO) and the
consequent open offer made to the shareholders of Godavari Fertilisers Limited (GFCL) in accordance with the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeover) Regulations, 1997. The Company has since acquired equity shares of GFCL - 15,51,960
through the open offer and 80,01,000 from IFFCO at Rs.150/ per share on April 2, 2007 and April 12,2007 respectively.

76
Schedules forming part of Consolidated Accounts
SCHEDULE 18 (Contd.) 31.3.2007 31.3.2006
Rs. Lakhs Rs. Lakhs
e. Other monies for which the Group is contingently liable:
i. Letters of Credit established for purchases of Raw Materials, Spares and Capital Goods
and financing a subsidiary. 5377 1256
ii. Income tax demands contested for which no provision has been made. 816 2264
iii. Claims against the company for Sales Tax, Excise Duty and others including Industrial Disputes not 703 899
acknowledged as Debt and not provided for.
iv. Certain Industrial disputes are pending before Tribunal/High Courts. No provision has been made in the
accounts as the liability of the Company in respect of these disputes depends upon the final outcome of
such case and the quantum of which is not currently ascertainable.
v. The Statutory Minimum Price of sugar cane for the sugar year 2002-03 notified on 12th December 2002,
at Rs. 645/MT was increased to Rs. 695/MT on 9th January, 2003. Since the increase was arbitrary the
same was legally challenged by the South Indian Sugar Mills Association (of which the Company is a
member) and the matter is pending before the Hon'ble Supreme Court of India. Based on legal advice,
pending disposal of these cases, amount not provided for in the accounts.
The Statutory Minimum Price of sugar cane for the sugar year 2003-04 was fixed at Rs. 730 / MT 1115 826
which was challenged by South Indian Sugar Mills Association and the matter is pending before
the High Court of Madras, pending disposal of cases, no provision has been considered in the accounts.
vi. The Company had an opening export obligation of 73841 MT arising out of raw sugar imported
against Advance licenses in earlier years. No fresh raw sugar imports were made during the
year & hence no additional export obligation has arisen. Balance export obligation out of the
opening export obligation of 73841 MT is 23160 MT as on 31st March, 2007. The time limit for
export of this balance obligation quantity is up to February, 2008.

4. The Government of India grants price concessions on sale of Phosphatic Fertilisers to Coromandel Fertilisers Limited. Pending announcement of final rates of
concession for the period July 1, 2006 to March 31, 2007, differential subsidy income ( in excess of the Base rate ) of Rs.3261.81 lakhs has been recognised
having regard to the existing concession scheme and according to the management estimates of final price concession receivable.

5. During the year, CFL has received a grant of Rs.99.29 lakhs from United Nations Industrial Development Organisation towards implementation of the
Montreal Protocol for eliminating ozone depleting substances. As per the requirements of the Accounting Standard 12, 'Accounting for Government
Grants', the said grant has been adjusted against the cost of the fixed Assets, towards which it was received.

6. Employee Benefits
The Company has adopted Accounting Standard-15 (Revised 2005) "Employee Benefits "effective from 1st April 2006. Pursuant to this, the company has
reassessed its liability on various employee benefits as on that date and the additional liability arising thereon amounting to Rs.420 lakhs (net of tax
expenses of Rs.88 lakhs) in case of EID and Rs.506.67 lakhs (net of tax expenses of Rs.257.07 lakhs) in case of CFL has been adjusted against General
Reserve in accordance with the transitional provisions in the Standard. Further in the case of EID as a result of this change the charge to profit & loss
account for the year is higher by Rs.56 lakhs.

i. DEFINED CONTRIBUTION PLANS

a. Provident Fund
Contributions are made to the Company's Employees Provident Fund Trust in accordance with the fund rules. The interest rate payable by the trust
to the beneficiaries every year is being notified by the Government. The Company has an obligation to make good the shortfall, if any, between the
return from the investments of the trust and the notified interest rate. The company also contributes to a government administered pension fund on
behalf of its employees

77
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Consolidated Accounts

SCHEDULE 18 (Contd.)
b. Superannuation
Fixed contributions to the Superannuation Fund, which is administered by trustees and managed by LIC are charged to the Profit and Loss Account.
The Company has no liability for future Superannuation Fund benefits other than its annual contribution and recognizes such contributions as an
expense in the year incurred.

ii. DEFINED BENEFIT PLAN

Gratuity
The company makes annual contribution to a Gratuity Fund administered by trustees and managed by LIC. The company accounts its liability for
future gratuity benefits based on actuarial valuation, as at the balance sheet date, determined every year by LIC using the Projected Unit Credit
method.

iii. SHORT TERM EMPLOYEE BENEFIT

Short term employee benefits, including accumulated compensated absences, are recognized as an expense as per the Company's scheme based
on expected obligations on undiscounted basis.
In the case of one subsidiary, Coromandel Fertilisers Ltd, the company has considered a portion of employee leave encashment as long term
benefits, whereas the same has been considered as short term benefits by EID.-Parry.

7. MISCELLANEOUS EXPENDITURE
Voluntary separation scheme expenditure is amortised over the period the expected period of future benefits.

8. MINORITY INTEREST
31.3.2007 31.3. 2006
Rs Lakhs Rs Lakhs
Minority Interest as at the date of Investment in the Subsidiaries 5166 5166
Minority Interest in post acquisition Reserve 7646 5864
Minority Interest in net Income / (Losses) 3523 2588
Minority Interest in Associate's Net Worth 716 639
Total 17051 14257

9. In respect of overseas subsidiary company, Income and Expenses are translated at the average exchange rate for the year. Current assets and
liabilities are translated at period end exchange rate. The fixed assets are translated at the rate that prevailed on the date of transactions. Net foreign
exchange difference on translation is recognised in the Profit and Loss account.
10. Composition of Business Segments :
Primary Segments
Farm Inputs Sugar Bio products Others
Fertilisers Sugar, Neem Corporate
Pesticides Chemicals Organic Manure Others
Power Nutraceuticals
Secondary Segments
North America India Rest of the World Europe

Inter Segment Transfer Pricing :

Inter Segment prices are normally negotiated amongst the segments with reference to cost, market prices and business risks, within an overall
optimisation objective for the enterprise.

78
Schedules forming part of Consolidated Accounts
SCHEDULE 18 (Contd.)

Segment Revenues, Results and Other Information :

Rs.Lakhs
Primary Segments
Farm Inputs Sugar Parryware Bio Others Elimination Overall
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
Revenue
(Sales/Income) :
(Gross of Excise Duty)
External Customers 211781 189853 55592 82321 25211 3923 2146 16326 3946 287622 303477
Inter-segmental Sales - - 958 451 – – (958) (451) – –
Total 211781 189853 56550 82772 25211 3923 2146 16326 3946 (958) (451) 287622 303477
Results :
Operating Profit/(Loss) 17413 12591 3080 9348 3251 528 60 (484) 1969 2285 20537 24934
Profit on sale of Investments 11812 2285
Dividend Income 499 386
Share in Joint Venture PBIT 1476 319
Interest Expenses (Net) (2848) (2199)
Profit before Tax 31476 25725
Income Tax - Current (6897) (7021)
- MAT Credit Entitlement 61 –
- Deferred (2488) 244
- Fringe Benefit Tax (171) (275)
Net Profit before Minority Interest 21981 18673
Less : Minority Interest’s share (3523) (2588)
Add : Share of Associates’ Profits 1598 1065
Net Profit relating to the Group 20056 17150
Other Information :
Segment Assets 155879 133854 71265 54377 21360 6261 2929 29301 12690 262706 225210
Share in Joint Venture 12293 120
Unallocated Corporate Assets 23952 20912
Total Assets 298951 246242
Segment Liabilities 53674 51255 19838 14295 - 4442 408 (125) 1918 6359 75838 76226
Share in Joint Venture 2560 236
Unallocated Corporate Liabilities 108910 83836
Shareholders’ Funds 94592 71687
Minority Interest 17051 14257
Total Liabilities 298951 246242
Capital Expenditure 6155 3438 16123 18268 3686 763 120 383 90 23424 25602
Depreciation 3992 3716 2684 1942 609 269 209 336 204 7281 6680
Depreciation-Share in Joint Venture 446 1
Non-cash expenditure 232 94 124 - 30 1 19 27 134 413
(excluding Depreciation)

Secondary Segments
India North America Europe Rest of the World Total
2007 2006 2007 2006 2007 2006 2007 2006 2007 2006
Segment Revenue 282864 288184 2926 1160 848 13490 984 643 287622 303477
Carrying Amounts of :
Segment Assets 297987 245731 964 511 298951 246242
Segment Liabilities 298025 245900 926 342 298951 246242
Capital Expenditure 23413 25601 11 1 23424 25602

79
 E.I.D. - PARRY (INDIA) LIMITED

Schedules forming part of Consolidated Accounts

SCHEDULE 18 (Contd.)

11. Related Party transactions

List of Related Parties:

a) Associates / Joint Venture Companies

1. Prathyusha Chemicals & Fertilisers Limited
2. Godavari Fertilisers & Chemicals Limited
3. Parry Monsanto Seeds Private Limited
4. Silkroad Sugar Private Limited
5. Parryware Roca Private Limited

b) Key Management Personnel (KMP)

1. Mr. P. Rama Babu, Managing Director in E.I.D.- Parry (India) Limited
2. Mr. V. Ravichandran, Managing Director in Coromandel Fertilisers Limited

c) Transactions with related parties

Rs. Lakhs
2006-2007 2005-2006
Associates/ KMP Associates/ KMP
Joint-venture Joint-venture
Sale of Goods 404 94
Purchase of Assets 44
Purchase of Goods 59 2965
Rendering of services 449 24
Receiving of services 184
Interest Income 39

Dividend Income 484 250

Purchase of Investments 363
Material given/returned on loan 856 534
Material taken/returned on loan 704 489
Managerial Remuneration *
Loan recovered/refunded – 10 4
Intercorporate Deposit given/received 4120 1000
Closing Balance–Debit 73 1080
Closing balance–Credit – 13

* Details of remuneration to Directors is disclosed in the respective accounts of the Company and its subsidiary - CFL.

80
Schedules forming part of Consolidated Accounts
SCHEDULE 18 (Contd.)

12. Earnings per Share

31.3.2007 31.3.2006

a. Profit after tax as per Consolidated Profit and Loss 20056 17150
Account (Rs. lakhs)
b. Number of Equity Shares of Rs. 2/10 each outstanding 89248515 17849703
at the beginning of the year
c. Number of Equity Shares of Rs.2 each outstanding 89248515 89248515
during the year
d. Earnings per Share-Basic and Diluted (Rs) 22.47 19.22

13. Deferred Tax

Break up of Net Deferred Tax Liability is as under
2007 2006
Deferred Tax Deferred Tax
Liability/ (Assets) Liability/ (Assets)
Rs. Lakhs Rs. Lakhs

Difference between tax and book written down value of fixed assets 16355 13866
Debited on account of AS- 15 (Revised) Transitional Provision (345) –
Others (639) (358)
Net Deferred Tax Liability 15371 13508

14. The equity accounting of associates and financial reporting of interest in joint ventures for the current year are based on unaudited/audited financial statements.
The previous year's figures which were earlier based on unaudited financial statements have been revised to give effect to change in the audited financials.

15. Previous year figures have been regrouped to conform to the presentation of current year’s accounts.
On behalf of the Board

A. VELLAYAN
Chairman

Chennai G. JALAJA D. KUMARASWAMY P. RAMA BABU

May 4, 2007 Secretary Chief Financial Officer Managing Director

81
 E.I.D. - PARRY (INDIA) LIMITED

Statement pursuant to exemption received under Section 212(8) of the Companies Act, 1956
relating to subsidiary companies Rs. Lakhs
Name of Subsidiary Coromandel Fertilisers Parry Chemicals Limited Coromandel Parry Infrastructure Parrys Investments Parry America Inc Parrys Sugar
Company Limited Bathware Limited Co. Pvt. Ltd. Limited Ltd.
for the period for the period
ended ended
2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 31-03-2007 2006-07 2005-06 2006-07 2005-06 31-03-2007
Share Capital 2558 @ 2541 50 50 194 194 1 25 25 22 22 150
Reserves & Surplus 51678 41258 75 75 (193) (193) – 14 13 9 (32) 10
Other Liabilities $ 118788 105733 411 1031 – – – – – 930 521 –
Total Assets # 173024 149532 536 1156 1 1 1 39 38 961 511 160
Total Income (including other income) 212085 190606 85 3265 – 1 – 1 1 1400 665 11
Profit Before Tax 14635 11536 6 21 – (22) – 1 1 44 (10) 10
Provision for Tax 4561 3182 6 14 – – – – – 3 4 –
Profit after Tax 10074 8354 – 7 – (22) – 1 1 41 (14) 10
Proposed Dividend
(including Dividend Tax) 2557 2462 – – – – – – – – – –
Details of Investments
(Other than in Subsidiaries)
Long Term - At cost
Trade
Quoted Equity Shares
Godavari Fertilisers and Chemicals Ltd 13419 13419
Rs 10 each fully paid (Nos.) 14422252 14422252
Chennai Petroleum Corporation Ltd – –
Rs 10 each fully paid (Nos.) 300 300
Glaxo Smithkline Pharmaceuticals Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 38)
Morarjee Realties Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 49)
TATA Motors Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 28)
Alpha Laval Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 47) 3
Corporation Bank Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 500)
Birla Global Finance Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 36)
PH Capital Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 2900)
Gupta Carpets Udyog Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 140)
Indian Card Clothing Co Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 2)
Indian Seamless Metal Tubes Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 100)
Indian Seamless Steel Alloys Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 300)
I G Petrochemicals Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 13000)
$ (Secured Loan + Unsecured Loan + Deferred Tax Liability + Current Liabilities – Deferred Tax Assets)
# (Net Fixed Assets + Current Assets + Investments)
@ including capital suspense of Rs.16 lakhs.
82
 Rs. Lakhs
Name of Subsidiary Coromandel Fertilisers Parry Chemicals Limited Coromandel Parry Infrastructure Parrys Investments Parry America Inc Parrys Sugar
Company Limited Bathware Limited Co. Pvt. Ltd. Limited Ltd.
for the period for the period
ended ended
2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 31-03-2007 2006-07 2005-06 2006-07 2005-06 31-03-2007

Laxmi Electricals Control Systems Ltd

Rs. 10/- each Fully paid
(No of eq. Shares - 2)
UTI Master Shares
Rs. 10/- each Fully paid
(No of eq. Shares - 1000)
Super Sales Agencies Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 80)
Tata Iron and Steel Co Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 49)
Tata Power Co Ltd
Rs. 10/- each Fully paid
(No of eq. Shares - 120)
Indian Seamless Steel Alloys Ltd
Rs. 10/- each Fully paid
(No of debentures- 30)
Unquoted Equity Shares
Indian Potash Limited 5 5
Rs 10 each fully paid (Nos.) 90000 90000
Prathyusha Chemicals & Fertilisers Ltd 143 143
Rs 10 each fully paid (Nos.) 1430000 1430000
Foskor (PTY) Limited 2693 2693
South African Rand 1 each fully paid (Nos.) 199590 199590
“B” Class shares of South African
Rand 1 each fully paid up (Nos.) 23500000 23500000
Tunisian Indian Fertilisers S.A. 1193
Tunisian Dinars 10 each (Nos.) 1350000
Bharuch Enviro Infrastructure Limited 1
Rs.10/- each fully paid (Nos.) 16100
Bharuch Eco Aqua Infrastructure Limited 28
Rs.10/- each fully paid (Nos.) 275000
Other than Trade Investments Unquoted
IDBI Flexibonds 2 –
Murugappa Management Services Ltd 8 8
Rs 100 each fully paid (Nos.) 8001 8001
Cholamandalam Factoring Limited 1 1
Rs 10 each fully paid (Nos.) 6500 6500
Silkroad Sugar Pvt Ltd Rs 49000
Rs 10 each fully paid (Nos.) 4900
Parry Infrastructure Company Pvt. Ltd. Rs 49000
Rs 10 each fully paid (Nos.) 4900

On behalf of the Board

A. VELLAYAN
Chairman

Chennai G. JALAJA D. KUMARASWAMY P. RAMA BABU

May 4, 2007 Secretary Chief Financial Officer Managing Director

83
Notes
FORWARD LOOKING STATEMENT
This Annual Report contains certain “Forward Looking Statements” relating to our future business developments and
economic performance. These are based on our judgement and future expectations. The actual results could be
materially different in terms of future performance and outlook due to a number of risks, uncertainties and other
important factors and E.I.D.- Parry is under no obligation to publicly revise any forward looking statement to reflect
future events or circumstances.
E.I.D.-Parry (India) Limited
“Dare House”, Parrys Corner, Chennai 600 001
Ph: +91-44-25306789 Fax: +91-44-25340858
www.eidparry.com