1. CMC Limited
Twenty ninth annual report 2004 - 2005
Contents
Corporate Information 2
Notice 3
Directors’ Report 6
Management Discussion and Analysis 14
Corporate Governance Report 19
Auditors’ Certificate on Corporate Governance 26
Company Secretary’s Responsibility Statement 27
Auditors’ Report 28
Balance Sheet 32
Profit & Loss Account 33
Cash Flow Statement 34
Schedules & Notes on Accounts 35
Balance Sheet Abstract 50
Details of Subsidiary Company 51
Auditors’ Report on the Consolidated Accounts 52
Consolidated Accounts 54
Annual General Meeting on Friday,
Proxy/Attendance Sheet 69
June 17, 2005 at 2.30 p.m. at Bhartiya
Payment of Dividend by Electronic Clearing Services 71
Vidya Bhavan Auditorium, BVB
Hyderabad Kendra
No. 5-9-1105, Basheerbagh-King Koti
This annual report can be
Road, Hyderabad-500029
accessed at www.cmcltd.com
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2. CMC Limited
Twenty ninth annual report 2004 - 2005
CORPORATE INFORMATION Principal Bankers
Canara Bank
BOARD OF DIRECTORS State Bank of Bikaner & Jaipur
ICICI Bank
Chairman
Audit Committee
Mr S Ramadorai
Dr KRS Murthy
Managing Director & CEO Mr Surendra Singh
Mr R Ramanan Mr C B Bhave
Directors Share Transfer-cum-Shareholders
Grievance Committee
Mr Ishaat Hussain
Mr Surendra Singh
Dr KRS Murthy
Mr R Ramanan
Mr Surendra Singh
Mr Shardul Shroff
Mr C B Bhave Mr Vivek Agarwal
Mr Shardul Shroff
Remuneration Committee
Company Secretary & Head - Legal Dr KRS Murthy
Mr Vivek Agarwal Mr S Ramadorai
Mr C B Bhave
Statutory Auditors
Ethics and Compliance Committee
M/s S.B. Billimoria & Co.
Chartered Accountants Mr Surendra Singh
Mr R Ramanan
Secretarial Auditors Mr Shardul Shroff
Chandrasekaran Associates Mr Vivek Agarwal
Company Secretaries
Registrars & Share Transfer Agents
Registered Office M/s Karvy Computershare Private Limited
CMC Centre Karvy House, 46, Avenue 4, Street No 1
Old Mumbai Highway Banjara Hills, Hyderabad 500 034
Gachibowli
Stock Exchanges where Company’s
Hyderabad-500019 (A.P.)
Securities are listed
Corporate Office The Stock Exchange, Mumbai
PTI Building, 5th Floor National Stock Exchange of India Ltd.
4, Sansad Marg The Calcutta Stock Exchange Ass. Ltd.
New Delhi-110001
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3. NOTICE
Notice is hereby given that the 29th Annual General Meeting of the Members of CMC Limited will be held on Friday, June 17,
2005 at 2.30 P.M. at the Bhartiya Vidya Bhavan Auditorium, BVB Hyderabad Kendra No.5-9-1105 Basheerbagh-King Koti Road,
Hyderabad-500 029, A.P. to transact the following:
ORDINARY BUSINESS:
To receive, consider and adopt the audited Profit and Loss Account for the year ended 31st March, 2005 and the Balance
1.
Sheet as at that date and the Reports of the Board of Directors and the Auditors thereon.
2. To declare a dividend.
3. To appoint a Director in place of Dr KRS Murthy, who retires by rotation and, being eligible, offers himself for re-appointment.
4. To appoint a Director in place of Mr Shardul Shroff, who retires by rotation and, being eligible, offers himself for re-
appointment.
5. To appoint Statutory Auditors and to fix their remuneration.
BY ORDER OF THE BOARD
For CMC LIMITED
Mumbai VIVEK AGARWAL
April 18, 2005 COMPANY SECRETARY & HEAD - LEGAL
Registered Office:
CMC Centre
Old Mumbai Highway, Gachibowli
Hyderabad-500 019
Notes:
1. A Member entitled to attend and vote is entitled to appoint a Proxy to attend and vote at the meeting instead of
himself and the Proxy need not be a Member of the Company. The Proxy Form must be deposited at the Registered
Office of the Company not later than 48 hours before the commencement of the meeting.
2. The relevant details of item nos. 3 & 4 above pursuant to Clause-49 of the listing agreement are annexed hereto.
3. Members who hold shares in dematerialised form are requested to bring their DP ID and Client ID numbers for easy
identification of attendance at the meeting.
4. For the convenience of the Members, attendance slip is enclosed elsewhere in the Annual Report. Members/Proxy Holders/
Authorised Representatives are requested to fill in and affix their signatures at the space provided therein and surrender
the same at the venue. Proxy/Authorised Representatives of a Member should state on the attendance slip as ‘Proxy’ or
‘Authorised Representative’ as the case may be.
5. The Register of Members and the Share Transfer Books of the Company will remain closed from Tuesday, June 14, 2005 to
Friday, June 17, 2005 (both days inclusive).
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4. CMC Limited
Twenty ninth annual report 2004 - 2005
6. The dividend as recommended by the Board of Directors, if declared at the Annual General Meeting, will be paid at par
after June 17, 2005 (i) to those shareholders whose names appear on the Company’s Register of Members after giving
effect to all valid share transfers in physical form lodged with the Company on or before June 13, 2005; (ii) in respect of
shares held in electronic form to those ‘deemed’ members whose names appear in the statements of beneficial ownership
furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd. (CDSL) as at the
end of business hours on June 13, 2005.
7. In accordance with SEBI’s directions vide their Circular No. DCC/FITT/Cir-3/2001 dated October 15, 2001, arrangements
have been made to credit your dividend amount directly to your bank account through the Electronic Clearing Service
(ECS).
In case you hold shares in physical form, please furnish your bank details in the ECS Mandate Form enclosed separately
together with a xerox copy of your cheque leaf and return to our Registrars, Karvy Computershare Private Limited on or
before June 13, 2005. The said details in respect of the shares held in electronic form should be sent to your respective
Depository Participant and not to the Registrar as the Registrar is obliged to use only the data provided by the Depository
while making payment of dividend.
8. Pursuant to provisions of Section 205A(5) of the Companies Act, 1956, dividends which remain unclaimed for a period of
7 years from the date of transfer of the same to the Company’s unpaid dividend account will be transferred to the Investor
Education and Protection Fund established by the Central Government. Shareholders who have not encashed their
dividend warrant(s) so far are requested to make their claim to the Registrar & Share Transfer Agents of the Company. The
Company has been periodically reminding the shareholders concerned to claim their dividend from the Company.
9. Pursuant to Section 109A of the Companies Act, 1956, shareholders are entitled to make nomination in respect of shares
held by them. Shareholders desirous of making nominations are requested to send their requests in Form No. 2B in
duplicate (which will be made available on request) to the Registrar & Share Transfer Agents of the Company.
10. As an austerity measure, copies of the Annual Report will not be distributed at the Annual General Meeting. Members are
requested to bring their copies to the meeting.
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5. DETAILS OF DIRECTORS RETIRING BY ROTATION AND SEEKING REAPPOINTMENT
(In Pursuance of Clause 49 of the Listing Agreement)
Name Dr KRS Murthy Mr Shardul Shroff
Date of Birth 22.03.1938 01.10.1955
Date of Appointment 16.10.2001 16.10.2001
Doctorate in Business Administration B.Com. (Hons) from Sydenham
Qualifications
from Harvard Business School, Master College, Mumbai, LL.B. from
in Mgmt. from Sloan School, MIT, Government Law College, Mumbai,
Gold Medalist of Mysore University. Advocate on Record, Supreme Court.
Expertise in specific functional areas Business Management Legal, Project Finance, Mergers &
Acquisitions, Insurance, Corporate
Finance etc.
Directorships in National Stock Exchange- Infrastructure Development
other Companies Public Representative Finance Co. Limited
Apollo Tyres Limited
NIIT Limited
BILT Limited
Chairman/Member of Committees CMC Limited CMC Limited
of the Board of Companies of Audit Committee - Chairman Share Transfer cum Shareholders
which he is a Director Remuneration Committee - Chairman Grievance Committee
Infrastructure Development
Finance Corporation Ltd.
Audit Committee
Apollo Tyres Limited
Share Grievance Committee
NIIT Limited
Share Grievance Committee
Audit Committee
BY ORDER OF THE BOARD
For CMC LIMITED
Mumbai VIVEK AGARWAL
April 18, 2005 COMPANY SECRETARY & HEAD - LEGAL
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6. CMC Limited
Twenty ninth annual report 2004 - 2005
DIRECTORS’ REPORT
TO THE MEMBERS OF CMC LIMITED
Your Directors have pleasure in presenting the Twenty-Ninth Annual Report and the Audited Statement of Accounts for
the year ended 31st March, 2005.
1. FINANCIAL RESULTS
(Rs. in Crores)
Particulars 2004-05 2003-04
Income from Sales and Services 775.67 747.07
Other Income 6.80 16.60
Total Income 782.47 763.67
Operating Expenses 736.14 685.65
Profit before Depreciation, Interest and Tax 46.33 78.02
Depreciation 9.16 8.75
Interest 4.22 3.56
Profit before Tax 32.95 65.71
Provision for Taxation (incl. deferred Income Tax) 9.89 17.72
Profit after Tax 23.06 47.99
Add: Profit brought forward from previous year 130.93 97.14
Amount available for appropriations 153.99 145.13
Appropriations
Proposed Dividend 6.82 8.33
Tax on Proposed Dividend 0.96 1.07
Transfer to General Reserve 2.31 4.80
Balance carried to Balance Sheet 143.90 130.93
153.99 145.13
1.1 OPERATING RESULTS
The operating revenue for the year at Rs. 775.67 crores registered an increase of 3.8% over the previous year,
primarily driven by 32.5% increase in international revenue from Rs. 135.38 crores to Rs. 179.32 crores. The
Company’s total revenue for the year at Rs. 782.47 crores registered an increase of 2.5% over the previous year.
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7. The profit before tax at Rs. 32.95 crores registered a decrease of 49.9% over the previous year, primarily on
account of higher write offs and provisioning of bad and doubtful debts by Rs. 19.07 crores and lower other
income by Rs. 9.80 crores. The profit after tax stood at Rs. 23.06 crores registering a decrease of 51.9% over
the previous year.
2. DIVIDEND
Your Directors recommend payment of dividend at 45% of paid-up equity share capital for the year ended
March 31, 2005.
3. BUSINESS OPERATIONS
2004-05 2003-04
Others
E&T
ITES E&T Others
0.5%
3.6% ITES
2.4% 2.4% 1.1%
4.4%
SI CS
SI CS
28.8% 64.7%
25.0% 67.1%
Total Revenue: Rs. 782.47 crores Total Revenue: Rs. 763.67 crores
3.1 Customer Services (CS)
Customer Services Strategic Business Unit (SBU) undertakes activities of IT Infrastructure development and
management, network design, consultancy and management, storage management, security solutions,
business continuity/disaster recovery, third party maintenance and equipment supply and integration.
The CS SBU earned revenue of Rs. 506.70 crores during the year compared with Rs. 512.29 crores earned
during the previous year registering a decline of 1.1%. The CS SBU faced increased competition in the
domestic market resulting in pressure on pricing and margins. The CS SBU continued to be a dominant
provider of end-to-end IT solutions and services with strong pan India presence, as your Company executed
some of the largest IT infrastructure projects for banks and insurance companies during the year with over
1000 locations across length and breadth of the Country.
3.2 Systems Integration (SI)
The SI SBU undertakes the activities of solution deployment that includes software development, software
maintenance and support, turnkey project implementation and systems consultancy.The SI SBU earned revenue
of Rs 225.68 crores during the current year compared with Rs. 191.15 crores earned in the previous year,
registering an increase of 18.1%. The growth in the revenue of SI SBU was primarily driven by strong growth in
the international markets. Some of the key solutions and embedded systems offerings of SI SBU got increased
acceptance in the international markets. The SI SBU has become one of the leading embedded systems service
provider from India to some of the fortune 100 companies worldwide. In the domestic market the SI SBU
continues to be dominant player in general insurance sector, securities sector and e-Governance space.
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8. CMC Limited
Twenty ninth annual report 2004 - 2005
3.3 IT Enabled Services (ITES)
ITES SBU is a value added service provider providing OMR/ICR based forms processing services, document
management services, managed network services, Electronic Data Interchange (EDI) services, web design
and hosting services, facility management etc. The ITES SBU earned revenue of Rs 19.18 crores during the
current year compared with Rs. 33.85 crores earned in the previous year registering a decline of 43.4%. The
ITES SBU is facing increased competition from un-organised sector in domestic market. However the ITES
SBU has been able to leverage its experience and expertise in the international markets and position itself
for large projects overseas.
3.4 Education & Training (E&T)
E&T SBU of the Company offers courses on information technology including professional courses, vendor
certified courses, career development courses, through its own and franchisee centers. The E&T SBU turned
around during current year with revenue of Rs. 28.12 crores compared with Rs. 18.48 crores registering an
increase of 52.2%. The E&T has benefited from general upsurge in E&T market. In addition, the E&T SBU is
repositioning itself in corporate training segment and re-orientating its career courses.
3.5 International Operations:
Increased focus on international markets has been a part of the core strategy of your Company. The Company
increased its International revenue by 32.5% to Rs. 179.32 crores during current year. The international market
strategy of the Company revolves around leveraging TCS’s international presence and CMC’s products and
solutions. The increase in international revenue is primarily due to 219% increase in revenue from Embedded
Systems Services primarily from the customers in the USA and Europe and 46% growth from solutions
implementation primarily for the customers in Europe and Middle East & African Region. Your Company
suspended work for two international clients following their organizational restructuring. As an abundant
precaution your Company has provisioned for Rs. 16.00 crores for their dues.
4. SUBSIDIARY COMPANY
Your Company has one wholly owned subsidiary CMC Americas; Inc. in the United States of America. In
terms of approval granted by the Central Government under Section 212(8) of the Companies Act, 1956,
copies of the Balance Sheet, Profit & Loss Account and Report of the Auditors of the Subsidiary Company
have not been attached.
The Annual Accounts of the Subsidiary Company and 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 Company are also kept for inspection by any investors at the Registered Office of
your Company. However, pursuant to Accounting Standard 21 issued by the Institute of Chartered
Accountants of India, the Consolidated Financial Statements presented by the Company include the financial
information of its Subsidiary.
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9. 5. FIXED DEPOSIT
During the year, the Company has not accepted any fixed deposits under Section 58A of the Companies Act,
1956.
6. LISTING
The equity shares of the Company are listed with Calcutta Stock Exchange, The Stock Exchange, Mumbai
and National Stock Exchange.
7. DIRECTORS
Dr KRS Murthy and Mr. Shardul Shroff are retiring from the Board by rotation at the ensuing Annual General
Meeting and, being eligible, offer themselves for re-election.
8. COMMUNITY DEVELOPMENT
The Company is committed to improve the quality of the underprivileged community. As a part of fulfilling its
social obligations, the Company generates active participation among the staff members so that emphasis
shifts from donation to volunteering on the part of its staff members. As part of this, staff members keenly
participated in different ways such as blood donation, educating the underprivileged children, conducting
Quiz on Science in the schools, imparting skills in tailoring, stitching, etc. to the underprivileged women, arranging
exhibition-cum-sale stall for selling the products manufactured by the National Blind Association, etc.
CMC staff members made generous financial contribution to the Tata Relief Fund to help the victims of the
recent national tragedy resulting from Tsunami. CMC volunteers also visited the Tsunami affected areas and
did physical help, distributed materials like clothes etc.
9. BUSINESS EXCELLENCE AND QUALITY INITIATIVES
Your Company continued its journey in the Tata Business Excellence Model (TBEM) by signing Brand Equity
and Business Promotion (BE-BP) Agreement with Tata Sons Limited during the current year. This agreement
entitles your Company to leverage the Tata brand and access to the group resources and expertise. Your
Company achieved CMM level 5 certification for its development center at Hyderabad during the year.
10. CORPORATE GOVERNANCE
As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management
Discussion and Analysis, Corporate Governance as well as the Auditors’ Certificate regarding compliance of
conditions of Corporate Governance forms a part of the Annual Report.
11. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required under the Companies (Disclosure of particulars in the Report of Board of Directors)
Rules, 1988 in respect of energy conservation, technology absorption and foreign exchange earnings and
outgo is given in Annexure-I to this Report.
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10. CMC Limited
Twenty ninth annual report 2004 - 2005
12. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors based on the
information and representations received from the operating management confirm that:
i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed
with no material departures;
ii) The Directors had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the
state of affairs of the Company as on 31st March, 2005 and of the profit of the Company for that
period;
iii) The Directors had taken proper and sufficient care to the best of their knowledge and ability 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 and
iv) The Directors had prepared the Annual Accounts on a ‘going concern’ basis.
13. AUDITORS
M/s S B Billimoria & Co., the Statutory Auditors of the Company, hold office until the ensuing Annual General
Meeting. The said Auditors have under Section 224(1) of the Companies Act, 1956, furnished the certificate
regarding their eligibility for re-appointment.
14. PARTICULARS OF STAFF
Information as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars
of Employees) Rules, 1975, as amended, regarding particulars of employees drawing remuneration of Rs. 24
lacs per annum or Rs. 2 lacs per month, as the case may be, is set out in the Annexure – II to this report. The
Ministry of Company Affairs has recently amended the Companies (Particulars of Employees) Rules, 1975 to
the effect that the particulars of the employees of the companies engaged in Information Technology sector,
posted and working outside India, not being directors or their relatives, need not be included in the statement
but, such particulars shall be furnished to the Registrar of Companies. Accordingly, the statement included
in this report does not contain the particulars of employees who are posted and working outside India.
15. ACKNOWLEDGEMENTS
The Directors wish to convey their appreciation to business associates for their support and contribution
during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers
and bankers for the continued support given by them to the Company and their confidence reposed in the
management.
For and on behalf of the Board
Mumbai S RAMADORAI
April 18, 2005 Chairman
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11. Annexure-I
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
A. CONSERVATION OF ENERGY
Your Company is not an Industry as listed in Schedule to rule 2 of the Companies (Disclosure of particulars in the Report of Board of
Directors) Rule, 1988.
B. TECHNOLOGY ABSORPTION
Efforts made in technology absorption - as per Form B given below:
FORM B
1. Research and Development (R&D)
a. Specific Areas in which Research and Development (R&D) is being carried out by the Company
Developing biometric solutions for access control and personal identification for civilian application.
Developing Point of Sales Systems using embedded technology
Global Positioning System (GPS) based vehicle tracking systems solutions
b. Benefits derived as a result of the above efforts:
The ability to develop and engineer solutions to meet the complex IT needs of customers is dependent on the pro-active
work being carried out in the above areas. This also helps the Company to develop and retain the talent pool, which is an
important element of its end-to-end turnkey solutions capability.
c. Future Plan of Action
Your Company is in the process of exchanging technological advances and developments with its parent Company Tata
Consultancy Services Limited. Your Company constantly gives training to its staff to enable them to adapt newer technologies
and apply them to the problem domains.
d. Expenditure on R&D
(Rs. in crores)
Particulars 2004-05 2003-04
A Capital 0.23 0.68
B Recurring 9.89 10.86
C Total 10.12 11.54
D Total R&D Expenditure as a Percentage of Turnover 1.29 1.51
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12. CMC Limited
Twenty ninth annual report 2004 - 2005
2. Technology absorption, adaptation and innovation
a. Efforts made towards technology absorption, adaptation and innovation
Your Company proactively develops technology for its business needs. It also uses available state-of-the-art technology in
conceptualizing solutions. Technologies developed by the Company are used extensively for providing solutions to its
customers.
Projects are executed that span across technology groups such as use of Java & Web technologies for embedded systems,
use of FPGA for Finger Print Identification.
b. Benefits derived as a result of the above efforts
Upgradation of the Company’s product portfolio on new technologies.
Social benefits arising out of the use of IT in core sectors and ‘IT-enabling’ the Country-especially in Law and Order.
c. Information regarding Imported Technology
Your Company has not imported any technology.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
1. Activities Relating to Exports, initiatives to increase exports, Developments of new export markets for products and
services & export plan
As a part of its core strategy, the Company is focusing on increasing exports of its services by leveraging wide marketing reach of
its parent company Tata Consultancy services Limited. The Company has established itself as a major supplier of Embedded
System Services and software solution in key industry verticals and e-Governance space.
2. Total Foreign Exchange Earnings & Outgoings
The foreign exchange earnings of the Company during the year were Rs. 123.24 Crores while the outgoings were Rs. 71.01 Crores.
For and on behalf of the Board
Mumbai S RAMADORAI
April 18, 2005 Chairman
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13. Annexure-II
STATEMENT PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT 1956 AND THE COMPANIES
(PARTICULARS OF EMPLOYMENT) RULES, 1975.
Name Age Designation/ Remuneration Qualification Experience Date of Last
(Yrs.) Nature of Duties (Rs.) (Yrs.) commence- employment
ment of held,
employment Designation
(A) Personnel who are in receipt of remuneration aggregating not less than Rs. 24,00,000 per annum and employed throughout
the year.
NIL
(B) Personnel who are in receipt of remuneration aggregating not less than Rs. 2,00,000 per month and employed for part of the
year
Jonnavithula Suryaprakash 41 Technical Head- 1,451,998 M Tech- 16 17.11.2004 CISCO - USA
XIDC Digital System
Notes:
i. The above remuneration includes salaries, allowances, contribution to Provident Fund and perquisites valued in accordance with the Income
Tax Rules 1962.
ii. The company has contributed to the Gratuity Fund an appropriate amount based on actual valuation.
For and on behalf of the Board
Mumbai S RAMADORAI
April 18, 2005 Chairman
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14. CMC Limited
Twenty ninth annual report 2004 - 2005
MANAGEMENT DISCUSSION AND ANALYSIS
Overview
The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956 and Generally Accepted
Accounting Principles (GAAP) in India. There are no material departures from prescribed accounting standards in the adoption of the
accounting standards. The management of CMC Limited accepts responsibility for the integrity and objectivity of these financial statements,
as well as for various estimates and judgements used therein. These estimates and judgements relating to the financial statements have
been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the form and substance
of transactions and the state of affairs and profits for the year.
Industry structure and development
As per the early estimates of NASSCOM, the Indian IT industry is estimated to have grown about 30% during 2004-05. Domestic IT spends
is estimated to have grown by about 25%, whereas exports have estimated to have grown by about 35% during 2004-05.
The domestic growth has been driven mainly by increased IT spends by Government, Banks, Financial Services & Insurance, Telecom,
Manufacturing/Automotive and Retail. Indians have started outsourcing core area functions, such as finance, supply chain management
and procurement to MNCs using IT as a competitive differentiator for conducting business.
Software exports from India are clearly demonstrating increased offshore delivery model. Indian Vendors have started expanding their
service offerings to include new service lines, such as, package software implementation, integration, R&D Engineering and network
management.
Opportunity and Threats
Opportunity:
The Company is strong in providing IT infrastructure setup, support and management as well as in the system integration business in the
domestic market, namely in verticals like insurance and banking etc. It also has built up capabilities in back office data conversion and data
center applications.
The Company is on the threshold of becoming a major provider of embedded systems services from India addressing varied requirements
of electronic, telecom, and other high technology industries.
The Company now has the extended reach and brand equity of the TATA group to market its products and services in unrepresented
geographies and newer customer segments.
Services will continue to be a key business area and will be strengthened to improve price performance and market share. Appropriate
business alliance will be entered into to compliment internal efforts towards consolidation and growth.
Threats:
The competition from international IT players in the domestic solutions projects has intensified. Further in some of the areas being addressed
by ITES SBU, there is increased competition from un-organised sector, who are able to provide stiff price competition leading to stress on
margins.
The Company has duality of relationship with its major suppliers. In specific instances the Company partners with the suppliers to offer the
most competitive products at optimal prices to its customers and there are many instances where the company ends up competing with
them.
Financial Performance:
Revenues:
During the year under review, the Company earned total revenue of Rs.782.47 crores compared with Rs. 763.67 crores during the last year
registering a growth 2.5%. The income from sales and services at Rs. 775.67 crores registered a growth of 3.8% compared with Rs. 747.07
crores earned during the last year. Increase in revenue is mainly on account of International and Education & Training business. The share of
equipment business in total revenue during the current year declined marginally from 50.5% to 48.8%. The services revenue has increased
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15. by 7.24% from Rs. 370.24 crores to Rs. 397.05 crores resulting in increase of its share in total revenue from 49.5% to 51.2%. Other income
declined by 59% from Rs. 16.60 crores to Rs. 6.80 crores during the year.
The segment-wise breakdown of total revenue is given below:
(Rs. Crores)
Segment 2004-05 2003-04
Domestic
- Customer Services 476.86 476.32
- Systems Integration 74.93 85.24
- ITES 16.97 32.34
- Education & Training 27.59 17.79
International 179.32 135.38
Other Income 6.80 16.60
Total 782.47 763.67
Expenditure:
During the year under review, the operating expenses at Rs.736.14 crores increased by 7.4% compared with Rs. 685.65 crores incurred in the
corresponding last year. These expenses, as a percentage of total revenue, registered an increase from 89.8% to 94.1%. The increase in
operating expenses is primarily attributable to higher provisioning of bad & doubtful debts at Rs. 21.55 crores in the year, including an
amount of Rs. 16 crores provided against dues from two international clients, compared with Rs. 2.48 crores in the previous year.
Manpower cost has increased by 7.7% from Rs.131.72 crores to Rs. 141.86 crores during the year mainly on account of 6% increase in
manpower strength from 2985 to 3162, and the impact of normal increases in remuneration due to increments/promotions. The manpower
cost as a percentage of revenue has increased from 17.2% to 18.1%. The manpower productivity measured as value addition to manpower
ratio has declined from 2.83 to 2.81. Living expenses for employees deployed abroad has increased from Rs. 52.61 crores to Rs. 64.57 crores
in line with increased international operations. Living expenses, as a percentage of international revenue, declined from 39% to 36%.
The interest cost increased by 18.5% to Rs. 4.22 crores during the year under review compared with Rs. 3.56 crores incurred in the previous
year mainly on account of increase in borrowings from Rs. 66.18 crores to Rs. 81.72 crores. Depreciation charge increased from Rs. 8.76
crores to Rs. 9.16 crores primarily due to addition of assets worth Rs. 9.17 crores during the year. As a result, Profit Before Tax (PBT) has
declined by 49.9% from Rs. 65.70 crores to Rs. 32.95 crores during the year ended March 2005. PBT as a percentage of total revenue has
decreased from 8.6% to 4.2%.
The provision for taxation (including deferred tax) declined to Rs. 9.89 crores during the year under review from Rs. 17.72 crores in the
previous year, resulting in a reduction of 44.0%, primarily due to lower profits. The effective tax rate has, however, increased to 30% from
27% during the year, mainly on account of decline in export profits due to provision of Rs. 16 crores as doubtful debts from two international
clients.
As a result, Profit After Tax (PAT) has decreased by 51.9% to Rs. 23.06 crores during year under review compared with Rs. 47.99 crores earned
during the previous year. PAT as a percentage of total revenue has declined from 6.3% to 3.0%.
Financial Position
Fixed assets
The gross fixed assets as at 31st March, 2005 was Rs. 126.70 crores compared with Rs. 131.05 crores at the beginning of the year primarily due
to addition of Rs. 9.58 crores and adjustment/deduction of Rs. 13.93 crores during the year.
Working capital
Net current assets as at 31st March, 2005 increased to Rs. 198.20 crores compared to Rs. 168.02 crores at the beginning of the year mainly on
account of increase in current assets from Rs. 446.65 crores to Rs. 523.99 crores and increase in current liabilities and provision from
Rs. 278.63 crores to Rs. 325.80 crores during the year. Increase in current assets is attributable mainly to increase in inventory from Rs. 18.48
crores to Rs. 32.00 crores and increase in sundry debtors (net of provisions) from Rs. 179.82 crores to Rs. 248.38 crores. However, unbilled
revenue decreased to Rs. 93.95 crores from Rs. 114.93 crores at the beginning of the year mainly due to focus on faster billing of accrued
revenues. As a result, the level of debtors in terms of number of days has increased from 86 days to 116 days. However, the unbilled revenue
has declined from 55 days to 44 days.
15
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16. CMC Limited
Twenty ninth annual report 2004 - 2005
Capital Structure
Net worth of the Company as at 31st March, 2005 was Rs. 175.55 crores compared with Rs. 160.64 crores at the beginning of the year
resulting in an increase of 9.3% during the year, mainly on account of retained profit after tax earned during the period.
Loan funds as at 31st March, 2005 were Rs. 81.72 crores, resulting in an increase of 23.48% during the year primarily due to increase in
working capital.
As a result the debt equity ratio has increased from 0.41:1 to 0.47:1 during the year.
Segment-wise Review:
Domestic Market :
Customer Services
The Customer Services SBU’s revenue of Rs. 476.86 crores remained flat during the current year. The share of CS SBU in total revenue
declined from 62.4% to 60.9% during the year.
Systems Integration
The Systems Integration SBU earned revenue of Rs. 74.93 crores during the current year registering a decline of 12.1% over the previous
year. The share of SI SBU in total revenue declined from 11.2% to 9.6% during the year.
ITES
The ITES SBU earned revenue of Rs. 16.97 crores during the year registering a decline of 47.5% over previous year. The share of ITES SBU in
total revenue declined from 4.2% to 2.2% during the year.
Education & Training
The E&T SBU continues to show strong growth in revenue. It earned revenue of Rs. 27.59 crores during the year, registering an increase of
55.1% over previous year. The share of E&T SBU in total revenue increased from 2.3% to 3.5% during the year.
International Market
The Company earned International revenues of Rs. 179.32 crores during the year registering an increase of 32.5% over the previous year.
The share of international revenue in total revenue increased from 17.7% to 22.9%.
Future outlook
The Company believes that the domestic IT spends is likely to continue its current upward trend. The domestic IT spend is expected
to be driven by banks, financial institutions, telecom, oils and gas, power and government sectors. In addition mid and large size
companies feel the need of increased IT spends for process improvements and efficiency enhancement to face global competition. The
Company has also experienced increased acceptance of its solutions and embedded systems offerings in the international market. The
Company strategy revolves around leveraging its competencies/expertise and its strategic relationship with TCS to exploit these emerging
market opportunities.
Risk and Concerns
A comprehensive and integrated risk management framework forms the basis of all the de-risking efforts of the Company. Formal reporting
and control mechanisms ensure timely information availability and facilitate proactive risk management. These mechanisms are designed
to cascade down to the level of the line managers so that risks at the transactional level are identified and steps are taken towards mitigation
in a decentralised fashion.
The Board of Directors is responsible for monitoring risk levels on various parameters and the Managing Director ensures implementation
of mitigation measures. The Audit Committee provides the overall direction on the risk management policies.
1. Business risks:
Excessive dependence on any single business segment increases risks and needs to be avoided. The Company has adopted prudential
norms wherever required, to prevent undesirable concentration in any one vertical technology client or geographic area.
16
CMC 11.p65 16 5/19/2005, 11:57 AM

17. Excessive exposure to a few large clients has the potential to impact profitability and to increase credit risk. However, large clients and
high repeat business lead to higher revenue growth and lower marketing cost. Therefore, the Company needs to strike a balance. Your
Company actively seeks new business opportunities and clients to reduce client concentration levels.
A high geographical concentration of business could lead to volatility because of political and economic factors in target markets.
However, individual markets have distinct characteristics – growth, IT spends, willingness to outsource, costs of penetration, and price
points. Cultural issues such as language, work culture and ethics, and acceptance of global talent also come into play. Due to these
business considerations, the Company has decided not to impose any rigid limits on geographical concentration.
Proactively looking for business opportunities in new geographies and thereby increasing their contribution to total revenues helps
manage this risk.
Vertical domains relate to the industries in which clients operate. Your Company has chosen to focus on selected vertical segments
with a view to leverage accumulated domain expertise to deliver enhanced value to its clients.
Being a company exposed to rapid shifts in technology, an undue focus on any particular technology could adversely affect the risk
profile of the Company. Given the rapid pace of technological change, Your Company has chosen not to impose rigid concentration
limits. Often, industry characteristics and market dynamics determine the choice of technology.
2. Financial risks
The debtor recovery cycle of the Company is long due to dominance of Government entities in its customer profile resulting in need
to finance higher level of working capital. The Company is broad-basing its client profile in order to reduce debtor’s recovery cycle on
one hand and to strengthen the collection efforts on the other hand. In the interim, the Company is confident to have adequate
funding to finance its working capital requirements.
3. Legal risks
Litigation regarding intellectual property rights, patents and copyrights is significantly high in the software industry. In addition, there
are other general corporate legal risks. The management has clearly charted out a review and documentation process for contracts.
Legal compliance issues are an important factor in assessing all new business proposals.
4. Internal process risks
The key resource for the Company is its people. Our inability to attract and retain IT professional can have adverse impact on the
business of the Company.
Risk management processes at the operational level are a key requirement for reducing uncertainty in delivering high-quality software
solutions to clients within budgeted time and cost. Adoption of quality models such as the Software Engineering Institute’s Capability
Maturity Model (SEI-CMM) has ensured that risks are identified and measures are taken to mitigate these at the project plan stage
itself.
The company evaluates technological obsolescence and the associated risks on a continuing basis and makes investments accordingly.
Internal control systems and their adequacy
The Company has an adequate system of internal controls implemented by the management towards achieving efficiency in operations,
optimum utilisation of resources and effective monitoring thereof and compliance with applicable laws. The system is continuously reinforced
with analysis of data to strengthen it to meet the changing requirements.
The system comprises well defined organisation structure, pre-identified authority levels and documented policy guidelines and manuals
for delegation of authority.
A qualified and independent Audit Committee of the Board of Directors reviews the internal audit reports and the adequacy of internal
controls.
Human Resources
The Company recognizes human resource as the backbone for its long-term success and has tried continuously to provide a challenging
work environment thereby adding value to their professional growth.
The Company’s key focus has been to change the mindset from ‘human resource utilization’ to ‘nurturing and leveraging talent’. Towards
this, your Company has initiated the C-change initiative. C-change is the new internal change-for-betterment initiative meant to empower
every employee to actively participate in making of a better Company.
17
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18. CMC Limited
Twenty ninth annual report 2004 - 2005
In support of its business objectives, during the financial year, your Company has added significantly to its talent pool in high technology
and niche areas like embedded systems, real time systems etc. thereby building capacity to deliver solutions/services in the medium and
long term. The compensation structure has also been further modified to include premium for niche technical skills and domain expertise
so as to attract and retain required talent.
The staff strength of the Company as on March 31, 2005 was 3162 as compared to 2985 as on March 31, 2004.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Company’s objectives, expectations or predictions may be forward
looking within the meaning of applicable securities, laws and regulations. Actual results may differ materially from those expressed in the
statement. Important factors that could influence the Company’s operations include change in Government regulations, tax laws, economic
& political developments within and outside the country and such other factors.
18
CMC 11.p65 18 5/19/2005, 11:57 AM

19. CORPORATE GOVERNANCE REPORT
Company’s philosophy on Corporate Governance
As part of the Tata Group, CMC’s philosophy on Corporate Governance is founded upon a rich legacy of fair and transparent governance
practices. The Corporate Governance philosophy has been further strengthened with the adoption, three years ago, by the Company of the
Tata Business Excellence Model and Tata Code of Conduct and the adoption of the requirements under Clause 49 of the Listing Agreement
with the Stock Exchanges.
Board of Directors
(a) Composition
The present Board consists of one executive Director and six non-executive Directors. Out of the non-executive Directors, four are Independent
Directors and the other two represent the Promoters. The non-executive Directors with their diverse knowledge, experience and expertise
bring in their independent judgment in the deliberations and decisions of the Board. Apart from the sitting fees paid for attending Board/
Committee Meetings, the non-executive Directors did not have any material pecuniary relationship or transactions with the Company
during the year 2004-05.
The Company has a non-executive Chairman and the number of Independent Directors is more than one-third of the total number of
Directors. The number of non-executive Directors is more than 50% of the total number of Directors. The Company, therefore, meets with
the requirements relating to the composition of Board of Directors.
(b) Attendence of each Director at the Board Meetings/Annual General Meeting
During the year 2004-05, 5 meetings of the Board of Directors were held on April 26, July 17, October 11 in 2004 and on January 12 and
March 21 in 2005.
The 28th Annual General Meeting of your Company was held on August 30, 2004.
None of the Directors of the Board serve as Members of more than 10 Committees nor are they Chairman of more than 5 Committees, as
per the requirements of the Listing Agreement.
A detailed explanation in the form of a table is given below:
Name Category Board Attendance No. of outside No. of outside
Directorships*
Meetings at the Committee
attended AGM held Positions held
during the on 30.08.2004 Indian Foreign Member Chairman
year
Mr S Ramadorai Promoter 4 Yes 11 07 07 02
(Chairman) Non-executive
Mr R Ramanan Promoter 5 Yes 01 01 01 _
Executive
Mr Ishaat Hussain Promoter 5 Yes 15 - 07 03
Non-executive
Dr KRS Murthy Independent 4 Yes 01 _ - 02
Non-executive
Mr Shardul Shroff Independent 2 No 04 _ 05 _
Non-executive
Mr Surendra Singh Independent 3 Yes 06 _ 04 03
Non-executive
Mr C B Bhave Independent 5 No 03 _ 04 -
Non-executive
*This does not include directorships in Private Limited Companies.
• Audit Committee
The Company complies with the provisions of Section 292A of the Companies Act, 1956, as well as per listing agreement pertaining to the
Audit Committee and its functioning. The scope of the Committee includes:
• review of the Company’s financial reporting process, the financial statements and financial/risk management policies.
• review of the adequacy of the internal control systems in the Company.
• review of the internal audit report forwarded by the internal auditors.
• discussions with the management and the external auditors, the audit plan for the financial year and a joint post-audit review of the same.
• Review the Annual financial statements before submission to the Board.
• Review of the Statutory and Internal Auditors Remuneration.
19
CMC 11.p65 19 5/19/2005, 11:57 AM

20. CMC Limited
Twenty ninth annual report 2004 - 2005
During the year, 5 Audit Committee meetings were held on April 26, July 17, October 11 in 2004 and on January 12 and March 21 in 2005.
The Audit Committee meetings are held both at Corporate Office and other locations and attended by the Chief Financial Officer,
representatives of Internal Auditors and Statutory Auditors. The Company Secretary acts as the Secretary to the Audit Committee. The
Chairman of the Audit Committee was also present at the last Annual General Meeting of the Company.
The Composition of the Audit Committee and number of meetings attended by the Members are given below:
Name of Member Composition of the Audit Committee Number of meetings attended
Dr KRS Murthy Chairman - Independent Director 4
Mr CB Bhave Independent Director 5
Mr Surendra Singh Independent Director 3
Pursuant to Clause-49(II) of the Listing Agreement, Mr CB Bhave is having requisite financial and accounting knowledge.
MANAGERIAL REMUNERATION
a. Remuneration Committee
The Company is having a Remuneration Committee consisting of non-executive Directors, with the Chairman being an Independent
Director. The members of the Remuneration Committee are as follows:
- Dr KRS Murthy .. Chairman
- Mr S Ramadorai
- Mr CB Bhave
During the year, one meeting of the Remuneration Committee has been held on August 05, 2004 which was attended by all the
members.
The scope and function of the Remuneration Committee is to review and fix the remuneration payable to the executive Directors and
other senior employees of the Company.
Mr R Ramanan is working as the Managing Director & Chief Executive Officer of the Company.
The Non-Executive Directors are entitled for sitting fee only for attending the Board/Committee Meetings.
b. Remuneration Policy
The remuneration of the executive directors/ senior managers is decided by the remuneration committee based on criteria such as
industry benchmarks, the Company’s performance vis-à-vis the industry, performance track record of the executive director/
appointee(s). The Company pays remuneration by way of salary, perquisites and allowances consisting of fixed and variable component.
A sitting fee of Rs 10,000 per meeting of the Board and Audit Committee and Rs. 5,000 per meeting of the Remuneration Committee,
Share Transfer-cum-Shareholders Grievance Committee and other committees is paid for attendance at the meetings to the non-
executive Directors.
c. Remuneration to Directors
• Non-Executive Directors
Name of Director Sitting Fee paid (Rs.)
Mr. S. Ramadorai 45,000
Mr. Ishaat Hussain 50,000
Dr. K. R. S. Murthy 85,000
Mr. Surendra Singh 1,45,000
Mr. C. B. Bhave 1,05,000
Mr. S Shroff 75,000
• Executive Director
The salary and perquisites paid to Mr. Ramanan, Managing Director & CEO during the year 2004-05, Rs. 561360 and Rs. 222126 respectively.
Share Transfer-cum-Shareholders Grievance Committee
The Share Transfer cum Shareholders Grievance Committee is constituted to consider and approve various requests for transfer, sub-division,
consolidation, renewal, exchange, issue of new Certificates in replacement of old ones and redressal of the grievances of the Shareholders
as may be received from time to time.
20
CMC 11.p65 20 5/19/2005, 11:57 AM

21. The present composition of the Share Transfer cum Shareholders Grievance Committee is as under:
Mr Surendra Singh .. Chairman
Mr R Ramanan .. Member
Mr Shardul Shroff .. Member
Mr Vivek Agarwal .. Member
The Committee has had 16 Meetings during the year ended March 31, 2005 on April 14, April 26, June 08, July 17, August 03, September 16,
October 11, November 08, November 30, December 14, December 21 in 2004 and January 10, February 2, February 21, March 07 and March
21 in 2005 and a total of 142 Meetings till March 31, 2005 have taken place since its constitution.
Mr Vivek Agarwal, Company Secretary & Head - Legal, is the Compliance Officer and can be contacted at:
CMC Limited Tel: 91-11-23736151
PTI Building, 5th Floor Fax:91-11-23736159
4, Sansad Marg E-mail: cs@corp.cmc.net.in; vivek.agarwal@cmcltd.com
New Delhi-110001
5527 investors’ complaints/queries were received during the year under review and 02 complaints/queries were pending as on March 31,
2005.
COMMITTEE OF DIRECTORS
In addition to the above Committees, the Company has an Ethics and Compliance Committee for the following purpose:
– Set forth the policies relating to and oversee the implementation of the code of conduct for prevention of insider trading and code of
corporate disclosure practices.
– Take on record the status reports prepared by the compliance officer dealing in securities by the specified persons on monthly basis.
– Decide penal action in respect of violation of the SEBI Regulations/code by any specified person.
During the year ended March 31, 2005, two meetings of Ethics & Compliance Committee were held on April 14, 2004 and May 17, 2004,
respectively.
The Composition of the Ethics and Compliance Committee and number of meetings attended by the Members are given below:
Name of Member Composition of the Ethics Number of meetings attended
& Compliance Committee
Mr Surendra Singh Chairman 02
Mr R Ramanan Member -
Mr Shardul Shroff Member 02
Mr Vivek Agarwal Member 02
Company Secretary & Head - Legal
GENERAL BODY MEETINGS
Location and time of General Meetings held in the last 3 years:
Year Type Date Venue Time
2002 AGM 29.08.2002 CMC Centre, Gachibowli 2.30 p.m.
Old Mumbai Highway, Hyderabad
2003 AGM 31.07.2003 - do - 2.30 p.m.
2004 AGM 30.08.2004 Bhartiya Vidya Bhavan Auditorium, 2.30 p.m.
BVB Hyderabad Kendra No. 5-9-1105,
Basheerbagh-King Koti Road, Hyderabad – 500 029, A.P.
21
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22. CMC Limited
Twenty ninth annual report 2004 - 2005
Whether Special Resolutions:
(a) Were put through postal ballot last year - No
Details of voting pattern - N.A.
Persons who conduct the postal
ballot exercise- - N.A.
(b) Are proposed to be conducted through - No
postal ballot –
• Disclosures
i) During the year under review, there were no materially significant related party transactions with its promoters, directors, management
and subsidiaries that had a potential conflict with the interest of the Company at large.
ii) The Company has complied with all rules and regulations prescribed by the Stock Exchanges, Securities and Exchange Board of India
or any other Statutory Authority relating to the capital markets during the last three years. No penalties or strictures have been imposed
by them on the Company.
• Means of Communication
Half-yearly report sent to each household : The results of the Company are published in the
of shareholders newspapers.
Quarterly results and in which newspaper : Results are normally published in Business Standard
normally published in. and in Eenadu (Telugu – Hyderabad edition).
Any website where displayed. : Yes, the results are displayed on the Company’s website www.cmcltd.com
Whether it also displays official news releases : Yes
Whether the website displays the presentation : Yes, the Company holds an Analysts Meet after the
made to the institutional investors and to quarterly, half yearly and Annual Accounts, have been
the analysts. adopted by the Board of Directors, where information is disseminated and
analysed.
Whether Management Discussion and Analysis : Yes, Management Discussion and Analysis forms part of
is a part of Annual Report or not. Annual Report.
Compliance Officer
Mr Vivek Agarwal
Company Secretary & Head - Legal.
Address:
CMC Limited,
PTI Building, 5th Floor
4, Sansad Marg
New Delhi-110 001
Phone: +91-11-23736151-58 Ext 632
+91-11-23738075 (Direct)
Fax : +91-11-23736159
e-mail : cs@corp.cmc.net.in & vivek.agarwal@cmcltd.com
General Shareholder Information
Annual General Meeting:
Date and time : Friday, June 17, 2005 at 2.30 p.m.
Venue : Bhartiya Vidya Bhavan Auditorium
Basheerbagh
Hyderabad-500029
22
CMC 11.p65 22 5/19/2005, 11:57 AM

23. Financial Calendar : 1st April to 31st March
Financial reporting for
a) Quarter ending June, 30, 2005 : July, 2005
b) Quarter ending Sept. 30, 2005 : October, 2005
c) Quarter ending Dec. 31, 2005 : January, 2006
d) Quarter ending March, 31 2006 : April/May, 2006
Date of Book Closure : Tuesday, June 14, 2005 to Friday, June 17, 2005
(both days inclusive)
Dividend Payment Date: : The dividend warrants will be posted on and after June 17, 2005.
Listing:
The Stock Exchanges on which the Company’s shares are listed:
The Stock Exchange, The Calcutta Stock The National Stock Exchange
Mumbai, Phiroze Exchange Association Ltd. Association of India Ltd.
Exchange Plaza, 5th Floor
Jeejeebhoy Towers 7, Lyons Range
Dalal Street Kolkata-700001 Plot No.C/1, G Block
Mumbai-400001 Bandra-Kurla Complex
Bandra (E), Mumbai-400051
The Company has already applied for delisting of its shares from Calcutta Stock Exchange Association Limited and its approval is awaited.
Listing Fees
There are no arrears on account of payment of listing fees to the Stock Exchanges.
Stock Code
The Stock Exchange, Mumbai : 517326
The National Stock Exchange : CMC
• Market price information
The reported high and low closing prices during the year ended March 31, 2005 on the National Stock Exchange and the Stock Exchange,
Mumbai, where your Company’s shares are frequently traded, are given below:
National Stock Exchange The Stock Exchange, Mumbai
Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
April-04 569.80 483.20 569.00 490.50
May-04 520.00 374.95 520.00 385.00
June-04 497.70 423.05 495.00 419.45
July-04 597.00 438.00 596.25 375.00
Aug-04 710.00 500.00 708.90 587.00
Sept-04 736.00 657.00 735.00 661.00
Oct-04 751.90 621.10 750.00 640.10
Nov-04 755.00 676.00 750.00 644.00
Dec-04 740.00 700.10 742.00 701.00
Jan-05 752.00 602.00 755.00 615.00
Feb-05 688.85 647.15 687.00 640.30
Mar-05 689.95 581.00 690.00 620.55
23
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24. CMC Limited
Twenty ninth annual report 2004 - 2005
• Performance in Comparison to BSE Sensex
The performance of the Company’s scrip on the BSE as compared to the Sensex is as under:
Month BSE Sensex CMC LIMITED
High Low High (Rs.) Low (Rs.)
April 2004 5979.25 5599.12 569.00 490.50
May 2004 5772.64 4227.50 520.00 385.00
June 2004 5012.52 4613.94 495.00 419.45
July 2004 5200.85 4723.04 596.25 375.00
August 2004 5269.22 5022.29 708.90 587.00
September 2004 5638.79 5178.57 735.00 661.00
October 2004 5803.82 5558.14 750.00 640.10
November 2004 6248.43 5649.03 750.00 644.00
December 2004 6617.15 6176.09 742.00 701.00
January 2005 6696.31 6069.33 755.00 615.00
February 2005 6721.08 6508.33 687.00 640.30
March 2005 6954.86 6321.31 690.00 620.55
• Registrars & Share Transfer Agents
The Company has changed its Registrars and Transfer Agents from M/s MCS Limited to M/s Karvy Computershare Private Limited with
effect from April 01, 2005. The members are requested to correspond with the Company’s Registrars & Share Transfer Agents – M/s Karvy
Computershare Private Limited quoting their folio number at the following address:
M/s Karvy Computershare Private Limited
Karvy House, 46, Avenue 4, Street No. 1,
Banjara Hills, Hyderabad 500 034
Tel: 040- 23312454/23320251
Fax: 040-23311968
Email: mailmanager@karvy.com
• Share Transfer System
Shares lodged for transfer at the Registrar’s address are normally processed and approved by Share Transfer cum Shareholders Grievance
Committee on a fortnight basis. All requests for dematerialisation of shares are processed and the confirmation is given to the Depositories
within 15 days. Grievances received from Members and other miscellaneous correspondence on change of address, mandates etc. are
processed by the Registrars within 30 days.
• Distribution of shareholding
Distribution of shareholding as on March 31, 2005:
No. of shares No. of % of Total no. of % of holding
shareholders shareholders shares
1-500 52415 99.47 947199 6.25
501-1000 154 0.29 118023 0.78
1001-2000 43 0.08 63210 0.42
2001-3000 16 0.03 40050 0.26
3001-4000 10 0.02 36023 0.24
4001-5000 4 0.01 19924 0.13
5001-10000 11 0.02 86846 0.57
10001 & above 40 0.08 13838725 91.34
Total 52693 100.00 15150000 100.00
Physical Mode 82 0.16 14687 0.10
Electronic Mode 52611 99.84 15135313 99.90
24
CMC 11.p65 24 5/19/2005, 11:57 AM

25. • Shareholding pattern
Shareholding pattern as on March 31, 2005:
Category No. of shares Percentage of issued
held share capital
Tata Group of Companies 7785661 51.39
Mutual Funds and UTI 2323033 15.33
Banks 4124 0.02
Financial Institutions/ Insurance Companies 1974731 13.03
FIIs 1322188 8.74
NRIs/Foreign Nationals 19358 0.13
Bodies Corporates 448224 2.95
Indian Public 1272681 8.41
Total 15150000 100.00
• Dematerialisation of shares and liquidity
99.90% of the equity shares have been dematerialised by about 99.84% of the total shareholders as on March 31, 2005. The Company’s
shares can be traded only in dematerialised form as per SEBI notification. The Company has entered into Agreement with NSDL and CDSL
whereby shareholders have the option to dematerialise their shares with either of the depositories. Equity shares are actively traded in BSE
and NSE.
• Outstandings GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity
The Company has not issued any GDRs/ADRs/Warrants or any convertible instruments.
Plant locations
Your Company is not a manufacturing unit and thus not having any Plant. However, our offices are located in almost all metropolitan cities
in India.
Address for correspondence
The Company Secretary & Head-Legal
CMC Limited
PTI Building, 5th Floor
4, Sansad Marg
New Delhi-110001
Tel.: 91-11-23736151-58
Fax : 91-11-23736159
Email: cs@corp.cmc.net.in; vivek.agarwal@cmcltd.com
• Electronic Clearing Service (ECS)
The Company is availing of the ECS facility to distribute dividend to those Members who have opted for it, through the ECS facility in
metropolitan cities.
• Non-mandatory requirements
The Company at present has not adopted the non-mandatory requirements in regard to maintenance of non-executive Chairman’s office,
sending of half-yearly performance to the shareholders to their residence.
25
CMC 11.p65 25 5/19/2005, 11:57 AM

26. CMC Limited
Twenty ninth annual report 2004 - 2005
AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
TO THE MEMBERS OF
CMC LIMITED
1. We have examined the compliance of conditions of Corporate Governance by CMC Limited, for the year ended on
31 March, 2005, as stipulated in clause 49 of the Listing Agreement of the said Company with the stock exchanges.
2. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has
been limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring compliance
with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements
of the Company.
3. In our opinion and to the best of our information and according to the explanations given to us, and the representations
made by the Directors and the management, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.
4. As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that while
the Share Transfer cum Shareholders’ Grievance Committee has not maintained records to show the investor grievances
pending for a period of one month against the Company, the Registrars of the Company have certified that as of 31
March, 2005 there were two investor grievances that remained pending for more than 30 days.
5. 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 S.B. Billimoria & Co.
Chartered Accountants
Mumbai Jitendra Agarwal
Partner
April 18, 2005
Membership No. 87104
26
CMC 11.p65 26 5/19/2005, 11:57 AM

27. COMPANY SECRETARY’S RESPONSIBILITY STATEMENT
The Company Secretary confirms that the Company has:
i) maintained all the books of accounts and statutory registers required under the Companies Act, 1956 (“the Act”) and the
rules made thereunder;
ii) filed all the forms and returns and furnished all the necessary particulars to the Registrar of Companies and/or authorities
as required by the Act;
iii) registered all the particulars relating to charges in favour of Banks with the Registrar of Companies;
iv) issued all notices required to be given for convening of Board Meetings, Committee Meetings and Annual General Meeting
within the time limit prescribed by Law;
v) conducted the Board Meetings, Committee Meetings and Annual General Meeting as per the Act;
vi) complied with all the requirements relating to the Minutes of the proceedings of the Meetings of the Board of Directors,
Committees and the Shareholders;
vii) made the disclosures required under the Act including those required in pursuance of the disclosures made by the
Directors;
viii) obtained necessary approvals of the Directors, Shareholders and other Authorities as per the requirements;
ix) effected share transfers and despatched the certificates within the statutory time limits;
x) not exceeded its borrowing powers;
xi) paid dividend amounts to the shareholders within the time limit prescribed;
xii) complied with the requirements of the Listing Agreement entered into with the Stock Exchanges.
The Company has also complied with other statutory requirements under the Companies Act, 1956 and other related Statutes.
For CMC LIMITED
Mumbai Vivek Agarwal
April 18, 2005 Company Secretary & Head - Legal
27
CMC 11.p65 27 5/19/2005, 11:57 AM