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Directors Report of Balrampur Chini Mills Ltd.

Mar 31, 2023

Your Directors have the pleasure of presenting their report as a part of the 47th Annual Report, along with the Audited Accounts of the Company for the year ended 31st March, 2023.

Financial results

The financial results of the Company are summarised beiow:

(Rs in Lakhs)

Particulars

Standalone

Consolidated

2022-23

2021-22

2022-23

2021-22

Revenue from operations

466586.17

484602.68

466586.17

484602.68

Profit before finance costs, tax, depreciation and amortisation, exceptional items and other comprehensive income

57511.91.

74760.92

57483.12

73271.36

Less: Finance costs

4864.68

3086.89

4864.68

3086.89

Less: Depreciation and amortisation expense

12950.30

11386.49

12950.30

11386.49

Profit before share of profit of associates, exceptionai items and tax

-

-

39668.14

58797.98

Add: Share of profit of associates

-

-

1163.33

1194.09

Profit before exceptional items and tax

39696.93

60287.54

40831.47

59992.07

Add/(Less): Exceptionai items

-

5273.75

-

(120.37)

Profit before tax

39696.93

65561.29

40831.47

59871.70

Less: Tax expense

12143.77

14095.52

12414.77

13408.15

Profit for the year

27553.16

51465.77

28416.70

46463.55

Other comprehensive income (net of tax)

(622.33)

(361.79)

(626.69)

(367.02)

Total comprehensive income for the year

26930.83

51103.98

27790.01

46096.53

Dividend and its Distribution Policy

In terms of the Dividend Distribution Policy of the Company, the Board of Directors of the Company had declared an interim dividend of 250% (i.e. H2.50 per share on Equity Shares of the face value of H1/- each) for the Financial Year ended 31st March, 2023. Total outgo on the interim dividend was R5084.36 Lakhs. The said Policy is available on the website of the Company at the following web-link: https://chini.com/sustainabiiity/governance/poiicies/

The Board has not proposed any final dividend for the Financial Year ended 31st March, 2023 and accordingly, the interim dividend paid during the year shaii be treated as final dividend.

Reserves and surplus

The Company has transferred an amount of H30000.00 Lakhs to the General Reserve.

Operations

The operational data of the Company for the last two sugar seasons and financial years are as under:

Particulars

Sugar Season

Financial Year

2022-23 2021-22

2022-23

2021-22

Sugarcane crushed (Lakhs quintals)

1030.05 888.31

936.63

885.42

Sugar produced (Lakhs quintals)

** 97.58 * 90.58

** 88.33

* 90.96

Sugar Recovery (%)

** 9.47 * 10.20

** 9.43

* 10.27

* Net of sugar loss due to diversion of sugarcane towards B-heavy molasses

** Net of sugar loss due to diversion of sugarcane towards Syrup and B-heavy molasses

Change in Nature of Business

There is no change in the nature of the business of the Company during the financial year.

Non-Convertible Debentures

The Board of Directors of the Company at their meeting held on 11th February, 2023 has approved the issuance of 14000 Senior, Unlisted, Secured, Redeemable, Rated NonConvertible Debentures (NCDs) of face value of H1 Lakh each on private placement basis to HDFC Bank Limited in compliance with the applicable circulars issued by the Securities and Exchange Board of India on issuance of debt-securities by large corporates. The aggregate value of the NCDs as on 31st March, 2023 was H14000.00 Lakhs.

Industry scenario and outlook

India began the sugar season 2022-23 (October to September) with an opening inventory of around 7.0 MMT (Metric Million Tonnes), restated from 5.5 MMT by Government of India. Sugar production for the current season is estimated at 32.8 MMT, around 3.0 MMT lower than the previous season''s production of 35.8 MMT. Current year''s production estimate is net of sugar sacrifice of around 4.0 MMT towards Ethanol (last year 3.4 MMT).

Maharashtra, Uttar Pradesh (UP) and Karnataka as usual remains the three largest sugar producing states and are expected to produce ~10.5 MMT, 10.5 MMT and 5.8 MMT of sugar in the ongoing season in comparison to the previous season''s production of 13.7 MMT, 10.2 MMT and 6.2 MMT respectively.

The reason for lower production in Maharashtra is owing to higher ratoon crop and uneven distribution of rainfall resulting in lower production.

Uttar Pradesh is expected to produce marginally higher sugar than last year on account of higher acreage and better yield.

In Karnataka likewise Maharashtra, lower yield led to lower production.

Sugar exports in the current season is expected to be around 6.1 MMT as compared to ~11.1 MMT in previous season.

The domestic demand for sugar is expected to be around 28.0 MMT as compared to 27.4 MMT in the previous season. The demand of 28.0 MMT will be a new record for the Indian sugar industry.

As a result, the carry forward stock of sugar in the country as on 30th September 2023, is expected to be around 5.7 MMT or around two and half months of consumption.

Domestic sugar prices for UP based millers ranged between R33.00 and R36.00 per kg through the course of the year.

There is worry on monsoon as El Nino fear is looming large across the Indian sub-continent and according to India Meteorological Departmet (IMD), major region that may get impacted are Maharashtra and partly Karnataka. However, there is enough availability for domestic consumption post sacrifice for Ethanol which would still warrant the country to export the surplus of sugar in order to maintain the inventory at similar levels.

The Government continued with most of the policies in the current sugar season related to sugar and ethanol that had been announced in the previous years with the objective to support sugar realisations and to ensure that farmers are paid on time.

The following policies were sustained:

• Fair & Remunerative Price (FRP) of sugarcane for the sugar season 2022-23 was revised to R305 per quintal from R290 per quintal in the previous season (linked to a basic recovery of 10.25%).

• State Advised Price (SAP) of sugarcane for the state of

Uttar Pradesh for the sugar season 2022-23 was kept same at R350 per quintal (for early maturing variety of sugarcane).

• Central Government announced export quota of 61 Lakh tonnes for the sugar season 2022-23 based on expected production (net of sugar sacrifice for Ethanol) after considering minimum closing inventory of 2.5 months of consumption.

• The pricing methodology for ethanol remained unchanged. Ethanol prices are announced annually by the Central Government based on a formula, which factors in the price of sugar and FRP of sugarcane to calculate ethanol procurement prices. Ethanol prices are delinked from crude or petrol prices. Ethanol prices for the supply period from December 2022 to October 2023 were increased to R65.61, R60.73 and R49.41 per BL for ethanol produced from direct cane juice/sugar syrup, B-heavy molasses and C-heavy molasses routes respectively compared to R63.45 , R59.08, R46.66 per BL in the previous period (December 2021 to November 2022).

• The Oil marketing companies announced differential prices for ethanol produced from damaged/surplus food grains. For the supply period from December 2022 to October 2023 price for ethanol from damaged foods grains was raised to R55.54 per BL from R52.92 per BL and price of ethanol from FCI surplus rice was increased to R58.50 per BL from R56.87 per BL in the previous period (December 2021 to November 2022).

• Soft loans are encouraged through banks for commissioning new distillery capacities or augmentation of existing capacities, which could facilitate higher ethanol production and reduce the sugar surplus through the diversion of B-heavy molasses and direct cane juice/ sugar syrup to ethanol as well as for production of Ethanol from damaged/surplus foodgrains.

• A lower GST of 5% on ethanol.

• Duty structure on export and import of sugar remained same as per last year.

• Along with MSP, stock holding limits on mills in the form of maximum monthly sale quotas continued.

The policy interventions by the Government have been supportive keeping in mind the health of the sugar sector. Still some measures are of importance to enable the industry to become self-sufficient.

• Increase the Minimum Selling Price (MSP) of sugar (which is a part of policy) to H38 per kg to cover all India average production cost of sugar. A proposal to raise MSP has been pending for approval at the Cabinet level.

• In order to increase ethanol blending percentage, more and more Ethanol is required to be produced by sacrificing sugar. To achieve higher sacrifice of sugar, syrup/juice-based Ethanol capacities needs to be created which requires higher capital investment. For that Ethanol prices to be set right to have desired level of returns on investment. A study has been done by an independent professional firm suggesting higher prices of Ethanol for Syrup/Juice-based Ethanol and the report has been submitted to the Government.

The Department of Food & Public Distribution, Government of India, had constituted a working committee to look into the aspect of sugar cane price rationalisation and other matters to present a long-term sustainable solution for the entire sugar eco-system after due consultation. Further action in respect of the same needs to be undertaken on a priority basis.

Global scenario

The Global sugar year 2022-23 kickstarted with two fundamentals questions; the first one was how production in CS Brazil will pan out for the 2022-23 sugar year and the other one was how big would be the Indian exports without any govt subsidy support.

Finally, as the Brazilian session ended, it was found that CS Brazil had managed to end up with almost 33.8 million tons of sugar much above the previous year production of 32.1 million tons. The Indian exports however is in line with domestic demand-supply situation which is already well elaborated in the previous sections.

Meanwhile the 2022-23 Thailand crushing session also ended up recently and it had produced 11.0 MMT sugar for the 2022-23 crop year as compared to 10.1 MMT in 2021-22.

Chinese production came down almost at 9.0 MMT as compared to 9.6 million tons previous year and thus raised the potential of serious deficit for their domestic consumption. Pakistan production looks to be down almost by 10%. The scenario is no way better in EU and UK where production is estimated at 15.8 million tons as compared to 17.7 million tons in previous year.

It looks like in spite of a higher production in Brazil, overall global production may not see any growth as such whereas demand from net importing countries and overall population growth raise the consumption steadily.

As we are aware that the global geopolitical tensions and the Oil prices is forcing most of the energy importing nations to switch towards more ethanol/other renewable consumptions. This has invariably brought some tailwinds for sugar sectors. Moreover the lower acreage in relation to US Corn plantation is also another supportive thing for sugar price as this leads to more and more Brazilian millers switching towards ethanol production than Sugar from their current year sucrose contents.

So, it is expected that the forthcoming sugar season will have higher production from Brazil whereas the same could be compensated by lower production from India, Pakistan and Thailand. However higher consumption trend shows that the market will be evenly balanced with a minor surplus of ~0.5 MMT.

We strongly believe that the global sugar price will not have any negative surprise in the near to intermediate term rather on account of a higher consumption, it may see some strength in terms of price actions and could hover at current 23-25 c/lb levels with a bias for further upside above 26 c/lb levels even. Overall, the sugar sector across the globe will continue to have tailwinds in the days ahead.

BCML''s performance during FY 2022-23

Revenues earned from operations during the year stood at R466586.17 Lakhs as compared to R484602.68 Lakhs for the previous year, lower by 3.7%. Revenues were lower on account of lower sugar volumes which was however partly off-set by higher sugar realizations. The distillery segment also delivered stable performance. The Company earned a total comprehensive income of R26930.83 Lakhs during the year ended 31st March 2023 as compared to R51103.98 Lakhs in the previous year.

Segment-wise performance and outlook

Sugar

During the financial year ended 31st March 2023, sugarcane crushing stood at 936.63 Lakh quintals as compared to 885.42 Lakh quintals in previous year, an increase of 5.78% over previous year. This was on account of higher area under cane as well as higher yield at farm level which resulted in higher availability of sugarcane. Sugar recovery (net of sugar sacrifice under syrup and B-heavy route 2.12% as compared to sugar sacrifice under B-heavy route 1.84% last year) for the year stood at 9.43% as compared to 10.27% in previous year. During the FY 2022-23 the Company has diverted 616.29 Lakh quintals (65.8%) of sugarcane for producing B-heavy molasses as compared to 613.41 Lakh quintals (69.3%) in previous year, owing to which sugar recovery was lower. In addition, in FY 2022-23 Company diverted 85.79 Lakh quintals (9.2%) towards syrup route ethanol which was not the case last year, which resulted in higher sugar sacrifice. In the process Company sacrificed 19.9 Lakh quintals of sugar as compared to 11.3 Lakh quintals in previous financial year. Had there been no diversion sugar recovery for the year would have been 11.55% as compared to 11.55% in previous year. Company is working hard at the ground level with the farmers and societies towards varietal rebalancing and developing new varieties which can be beneficial for both the farmers and millers. The Company is providing farmers with necessary agro-inputs to increase the farm yield and support clean cane quality. Influential steps were also taken to educate the farmers on modern agricultural practices.

During the year, the Company sold 90.38 Lakh quintals of sugar as compared to 102.63 Lakh quintals in previous year. Sales for the current year include 14.00 Lakh quintals to merchant exporters for export as compared to 5.40 Lakh quintals in previous year. Domestic sugar realization for the year stood at R35.63 per kg as compared to R34.77 per kg in previous year. Blended sugar realisation (Domestic along with export) stood at R35.97 per kg as compared to R34.71 per kg in previous year.

Sugar inventory (including WIP) as on 31st March 2023 stood at 51.18 Lakh quintals valued at ~R33.71 per kg as compared to 53.27 Lakh quintals valued at ~R34.22 per kg in previous year.

Distillery

The Company''s distillery segment delivered stable performance during the year. Company produced 2148.86 Lakhs BL of industrial alcohol during the year as compared to 1631.05 Lakhs BL during the previous year. Higher production was attributable to enhanced capacity from 560 KLPD to 1050 KLPD and higher cane availability which in turn led to higher feedstock for distillation. During the year Company expanded the distillery capacity at Balrampur from 160 KLPD to 330 KLPD and set up a 320 KLPD greenfield distillery at Maizapur. In addition, Company was able to run its distilleries at optimum capacity owing to zero liquid discharge status at all its distilleries. Company started ethanol production from syrup route

this year at its two plants Balrampur and Maizapur and was able to produce 671.35 Lakhs BL through cane syrup route. Owing to start of ethanol production form syrup route, production from B-heavy route declined from 1329.54 Lakh BL to 1121.00 Lakh BL.

Ethanol sales during the year produced from B-heavy molasses stood at 1104.11 Lakh BL at an average realisation of H59.53 per BL as compared to 1459.48 Lakh BL at an average realisation of H58.13 per BL in previous year. Ethanol sales from molasses produced from C-heavy route stood at 64.21 Lakh BL at an average realisation of H47.96 per BL as compared to 109.98 Lakh BL at an average realisation of H45.96 per BL in previous year. Ethanol sales from syrup route was 503.84 Lakh BL at an average realisation of H65.61 per BL. Similarly, Ethanol sales from grain route was 36.52 Lakh BL at an average realisation of H52.92 per BL. Ethanol sales from molasses produced from C-heavy route was lower in the current year as the Company chose to produce and sale Ethanol produced from Syrup and B-heavy molasses route with an intent to sacrifice higher quantity of sugar. Blended realisation for industrial alcohol (including Ethanol, ENA etc.) sales stood at H55.30 per BL as compared to H53.38 per BL in previous year.

Cogeneration

Company no longer sees cogeneration as a separate segment. Cogen/incineration has been merged with sugar/distiUery based on their operational matrix. This was done as the basic purpose of these were to meet the captive requirements and the surplus power generated was exported to the state electricity grid.

From an operational perspective, power generated during the year stood at 7186.74 Lakh units as compared to 7271.56 Lakh units in previous year, a decrease of 1.17% as the Company decided to sell more bagasse outside than to use it to generate power in view of lowering of power tariff by UPERC. Power exported to Uttar Pradesh Power Corporation Limited stood at 3168.92 Lakh units as against 3493.25 Lakh units in previous year, a decrease of 9.28%. Average realisation for the year stood at R3.42 per unit as compared to R3.30 per unit in previous year. The matter of reduction in tariff by UPERC is under litigation and is pending at Hon''ble High Court Allahabad.

Others

The Company also manufactures Granular Potash Fertilizer, Bio- Zyme, Bio-Pesticides for the healthy and salubrious growth of sugarcane and also provide soil

health cards to the farmers by analysing the soil samples of the farmers. It produces mainly three products namely Granular Potash, Jaiv-Shakti and Paudh-Shakti. These products provide strength to sustain under the draught conditions, increases metabolism and root development. The Company sells these products to farmers at subsidised rates and to the Indian fertilizer giant, India Farmers Fertilizer Cooperative Limited (IFFCO). Revenues during the year stood at H2449.40 Lakhs as compared to H1944.99 Lakhs in previous year.

A detailed analysis of the Company''s operations, expectations and business environment has been provided in the Management Discussion and Analysis section, which forms a part of this Report.

Subsidiary, Associate and Joint Venture Companies

As on 31st March, 2023, the Company has one Associate Company, namely, Auxilo Finserve Private Limited (AFPL). The Company holds 43.93 percent shares in AFPL as on 31st March, 2023. AFPL is a Systemically Important NonDeposit Accepting NBFC registered with Reserve Bank of India (RBI). The main objective of AFPL is to originate, provide and service loans to students pursuing education and provide ancillary services in relation to the said business activity and provide infrastructure or working capital loan to educational institutions.

During the Financial Year 2022-23, AFPL has earned revenue of H17826.10 Lakhs as compared to H8719.23 Lakhs for the previous Financial Year and profit after tax of H2574.74 Lakhs as compared to H1256.79 Lakhs for the previous Financial Year. AFPL has registered growth of 104.45% and 104.87% in revenue and profit after tax over the previous Financial Year, respectively.

The Company does not have subsidiary or Joint venture companies.

Consolidated Financial Statements

In compliance with the provisions of the Companies Act, 2013 (as amended) (the "Act") and implementation requirements of the Indian Accounting Standards Rules on accounting and disclosure requirements, as applicable, and as prescribed under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, (the "Listing Regulations"), the Audited Consolidated Financial Statements form part of this Annual Report.

Pursuant to Section 129(3) of the Act, a statement in Form

AOC-1 containing the salient features of the financial statements of the Company''s Associate Company is also provided in this Annual Report.

The audited financial statements of the Company including the consolidated financial statements and related information of the Company are available on the website of the Company at www.chini.com. Since, the Company doesn''t have any subsidiary, the requirement under Section 136 of the Act about separate financial statements does not apply to it.

Share Capital

During the year under review, the Board of Directors of the Company at its meeting held on 9th November, 2022, approved the buyback of equity shares, from the open market route through the stock exchanges, amounting to R145.44 crores (maximum buyback size, excluding transaction costs) at a price not exceeding R360 per share (maximum buyback price). The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters / the Promoter Group of the Company) under the open market route through the stock exchange. The buyback of equity shares through the stock exchange commenced on 16th November, 2022 and shall get completed on 15th May, 2023 (closing date of buyback). During this buyback period, the Company had bought back 2290755 (Twenty Two Lakhs Ninety Thousand Seven Hundred and Fifty Five) Equity Shares at an average price of H357.31 (Rupees Three Hundred Fifty Seven Thirty One Paisa Only) per Equity Share. Accordingly, the Company had deployed H81.85 Crores (excluding transaction costs) for the buyback, which represents 56.28% of the Maximum Buyback Size.

Post the Buyback of 2290755 equity shares, the equity share capital of the Company stood at H2017.49 Lakhs consisting of 201749245 equity shares of H1 each as on 31st March, 2023.

ESOP/ESAR

There are no outstanding stock options and no stock options were either issued or allotted during the year.

During the year, the Nomination & Remuneration Committee/Board has offered "BCML Employees Stock Appreciation Rights Plan 2023" ("ESAR 2023"/ "Plan") on 21st March, 2023 subject to shareholders approval. Accordingly, approval of shareholders were sought through Postal Ballot and the shareholders approved the ESAR 2023 on 23rd April, 2023. The Company has also received in-principle approval for listing of 4000000

(Forty Lakh) shares from National Stock Exchange of India Limited and BSE Limited on 10th May, 2023. However, no grants have been allotted as on the date of signing of this report.

Credit Rating

Details of Credit Ratings assigned to the Company are given in the Corporate Governance Report.

Directors

Pursuant to the provisions of Section 152(6) of the Act, the members of the Company at the 46th Annual General Meeting (AGM) held on 27th August, 2022, regularized the appointment of Mr. Praveen Gupta (DIN: 09651564) who was appointed as an Additional Director (WholeTime Director) on the Board of the Company with effect from 1st July, 2022 to hold office up to the date of 46th AGM. Accordingly, Mr. Gupta to hold office as Whole Time Director for a period of 3 (three) years w.e.f 1st July, 2022 whose office shall be liable to retire by rotation. Dr. Arvind Krishna Saxena ceased to be Whole Time Director from the closure of business hours of 31st July, 2022.

None of the Directors of the Company are disqualified as per the applicable provisions of the Act.

Director retiring by rotation

Mr. Praveen Gupta (DIN: 09651564) retires from the Board by rotation and being eligible, offers himself for reappointment. The Board of Directors recommends the said re-appointment. Resume and other information regarding aforementioned Director seeking re-appointment as required under Regulation 36 of the Listing Regulations and SS-2 on General Meetings shall be given in the Notice convening the ensuing AGM.

Changes in Board Composition

During the year under review, Mr. Praveen Gupta was appointed as an Additional Director on the Board of the Company w.e.f 1st July, 2022 and was subsequently regularised as Whole Time Director for a period of three years w.e.f 1st July, 2022 at the 46th Annual General meeting. Dr. Arvind Krishna Saxena ceased to be Whole Time Director from the closure of business hours of 31st July, 2022. No other changes occurred at the Board level.

Other Information

Appointment of Directors is made in accordance with the Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity as recommended by the Nomination &

Remuneration Committee and approved by the Board of Directors.

Other details pertaining to the Directors, their appointment / cessation, if any, during the year under review and their remuneration are given in the Corporate Governance Report annexed hereto and forming part of this Report.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Regulation 16(b) of the Listing Regulations. The Independent Directors have also confirmed that they have registered their names in the data bank of Independent Directors as being maintained by Indian Institute of Corporate Affairs (IICA) in terms of the Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).

The Board of Directors confirm that the Independent Directors appointed during the year also meet the criteria of expertise, experience and integrity in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended).

Separate Meeting of Independent Directors

Details of the separate meeting of Independent Directors held in terms of Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in the Corporate Governance Report.

Directors'' Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3) (c) read with Section 134(5) of the Act and Regulation 18 of the Listing Regulations in the preparation of the annual accounts for the year ended 31st March, 2023 and state that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. The Directors have 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 at the end of the Financial Year and of the profit of the Company for that period;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding

the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. There is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12), read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure I enclosed hereto and forms part of this report. In accordance with the provisions of the aforementioned section, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid rules form part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company, excluding the aforesaid information. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary.

Prevention of Sexual Harassment

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy viz., Policy on Prevention of Sexual Harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). The Company is also in compliance with the provisions of the POSH Act, with respect to the constitution of Internal Committee. During the year under review, no complaint/case was filed or was pending for redressal.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act are given in Annexure II attached hereto and forms part of this Report.

Deposits

The Company has not accepted any deposit from the public and consequently, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Key Managerial Personnel

During the year under review, pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company are Mr. Vivek Saraogi, Chairman & Managing Director, Mr. Pramod Patwari, Chief Financial Officer and Mr. Manoj Agarwai, Company Secretary. Mr. Praveen Gupta was appointed as Whole Time Director with effect from 1st July, 2022. Mr. Arvind Krishna Saxena ceased to be Whole-Time Director from the closing of business hours of 31st July, 2022. During the year, there has been no other changes in the Key Managerial Personnel of the Company.

Details pertaining to the remuneration of KMPs employed during the year have been provided in the Annual Return.

Board Meetings

The Board met 7 (seven) times during the Financial Year under review, the details of which are given in the Corporate Governance Report attached to this Report.

Committees of the Board

Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted/reconstituted (whenever necessitated) various committees such as Audit Committee, Nomination & Remuneration Committee, Stakeholders'' Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, Environment, Social and Governance Committee and Executive Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report.

Compliance of Secretarial Standards

The Company has complied with the applicable Secretarial Standards, i.e., SS-1 and SS-2 issued by the Institute of Company Secretaries of India.

Audit Committee

All recommendations made by the Audit Committee during the year were accepted by the Board.

Vigil Mechanism / Whistle-Blower Policy

The Company has in place a Vigil Mechanism / Whistle-Blower Policy to deal with unethical behavior,

victimisation, fraud and other grievances or concerns, if any. The aforementioned whistleblower policy is available on the Company''s website at the following web-link:

https://chini.com/sustainabiiity/governance/poiicies/

Policy on Selection and Remuneration of Directors

The Poiicy on Seiection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity is annexed as Annexure III.

Board Evaluation

Pursuant to the provisions of the Act and Regulation 17 of the Listing Reguiations, the Board has carried out the evaiuation of its own performance and that of its Committees as weii as evaiuation of performance of the individuai directors. The manner in which the evaiuation has been carried out has been expiained in the Corporate Governance Report attached to this Report.

Corporate Social Responsibility

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended), the Company has a Corporate Social Responsibility ("CSR") Committee. The details of composition and meetings held during the year of the Committee are mentioned in the Corporate Governance Report.

The CSR activities of the Company are focused on Sustainable Livelihood, Education including skiii development for women empowerment, Healthcare, Sanitation & safe drinking water; Rural Development and Environment sustainability. During the year, H85.52 Lakhs has been set off against the mandatory CSR obligation of H1132.94 Lakhs of FY 22-23, pursuant to which the current year CSR obligation amounted to H1047.42 Lakhs. During the year, the Company has spent H1194.74 Lakhs towards CSR and accordingly the excess amount available for set-off tiii FY 2026 is H147.32 iakhs. The CSR Policy of the Company as approved by the Board can be accessed on the Company''s website at following web-iink:

https://chini.com/sustainabiiity/governance/poiicies/

Impact Assessment

As per the CSR Amendment Ruies 2021, Impact Assessment is mandatory for companies having an average spend of H10 crores or more in the iast 3 (three) preceeding financiai years. Accordingiy, the Board of Directors of the Company has appointed an independent impact assessment agency viz. Third Planet Foundation to carry out the Impact Assessment of the societal activities carried out by the Company under its Corporate Social Responsibility interventions. As per the Impact Assessment Report issued by Third Planet Foundation in May, 2023, the CSR interventions of the Company have created a very meaningful and needful impact in the community and the chosen thematic areas have shown growth, outcomes and impact across all the location. The CSR Committee and the Board of Directors of the Company took a note of the same at their respective meetings held on 8th May, 2023 and 11th May, 2023, respectively. The Impact assessment Report is available on the Company''s website at the following web-link:

https://chini.com/pdf/BCML_Impact_Assessment_

Report_2023_Third_Planet_Foundation.pdf

The details of the CSR initiatives undertaken by the Company during the Financial Year 2022-23 are outlined in the initial section and the Annual Report on CSR activities which along with CSR Policy is attached as Annexure IV.

Inter-corporate Loans and Investments

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements forming part of this Annual Report.

Related Party Transactions

During the Financial Year ended 31st March, 2023, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arm''s length basis. During the year under review, your Company did not enter into any Related Party Transaction which requires approval of the Members. There have been no materially significant related party transactions made by the Company with the Promoters, the Directors or the Key Managerial Personnel which may be in conflict with the interests of the Company at large.

Since all related party transactions entered into by your Company were in the ordinary course of business on arm''s length basis and not material, therefore, details required to be provided in the prescribed Form AOC - 2 are not applicable to the Company. The Policy on Related Party Transactions as approved by the Board can be accessed on the Company''s website at following web-link:

https://chini.com/sustainability/governance/policies/

The details of the related party transactions are set out in the notes to the financial statements.

Risk Management Policy and Framework

The policy on risk assessment and minimisation procedures as laid down by the Board are periodically reviewed by the Risk Management Committee, Audit Committee and the Board. The policy facilitates identification of risks at appropriate time and ensures necessary steps to be taken to mitigate the risks. Brief details of risks and concerns are given in the Corporate Governance Report and Management Discussion and Analysis Report.

Annual Return

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the draft annual return of the Company for the Financial year ended 31st March, 2023 is uploaded on the website of the Company and can be accessed at https://chini.com/ investors/financials/.

Material Changes and Commitments

Except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of the Company between the end of the Financial Year i.e. 31st March, 2023 and the date of this Report.

Significant and Material Orders

There are no significant/ material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations. During the year under review, no Corporate Insolvency Resolution application was made or proceeding was initiated, by/against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended).

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were reviewed and no reportable material weakness was observed.

Corporate Governance & MDA Report

In terms of the provisions of Regulation 34(3) of the Listing Regulations, the Corporate Governance Report and the Certificate on the compliance of conditions of Corporate Governance form part of the Annual Report and are given separately as Annexure V and the Management Discussion and Analysis is given in Page no. 110 of the Annual Report.

Business Responsibility & Sustainability Report

Your Company has been delivering long-term shareholder value, benefitting the society. The Company is committed to economic, social, environmental, and cultural growth equitably and sustainably and creating a positive business environment. Over the years, BCML has worked to enrich lives across communities.

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Report" (''BRSR''). The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct'' (''NGRBCs'').

As per the SEBI Circulars, effective from the financial year 2022-23, filing of BRSR is mandatory for the top 1000 listed companies by market capitalisation. Accordingly, for the financial year ended 31st March 2023, your Company has published BRSR instead of Business Responsibility Report. BRSR is annexed as Annexure VI and forms an integral part of the Annual Report.

Auditors

Statutory Auditors and their Audit Report

M/s. Lodha & Co, Chartered Accountants (Firm Registration No. 301051E), were appointed as Statutory Auditors of the Company at the 41st AGM of the Company held on 30th August, 2017, to hold office till the conclusion of the 46th AGM. Hence, M/s. Lodha & Co, Chartered Accountants were re-appointed for a further term of 5 (five) years, in terms of provisions of Sections 139 and 141 of the Act. i.e. from the conclusion of the 46th AGM till the conclusion of 51st AGM of the Company.

The reports given by the Auditors, M/s. Lodha & Co, Chartered Accountants on the standalone and consolidated financial statements of the Company for the year ended 31st March, 2023 form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports.

The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.

Secretarial Auditors and their Audit Report

Pursuant to the provisions of Section 204 of the Act, the Company has appointed M/s. MKB & Associates, Company Secretaries, to undertake the secretarial audit of the Company for the Financial Year 2022-23. The Secretarial Audit Report for the Financial Year 2022-23 is attached as Annexure - VII and forms part of this Report. The contents of the said Audit Report are self- explanatory and do not call for any further comments by the Board. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Auditors and their Audit Report

During the year under review, pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the Board has appointed M/s. Mani & Co., Cost Accountants, to conduct cost audit of the cost records maintained by the Company relating to Sugar (including industrial alcohol), Electricity, Fertilisers and Insecticides for the financial year ended 31st March, 2023.

On the date of this Report, your Directors have, on the recommendation of the Audit Committee, appointed M/s. Mani & Co., Cost Accountants, as the Cost Auditors of the Company for the Financial Year 2023-24. As required under the Act, a resolution seeking ratification of the remuneration payable to the Cost Auditors shall form part of the Notice convening the ensuing AGM.

There was no remark, comment or observation made by the Cost Auditors of the Company in their report.

Opening of Suspense Escrow Demat Account

In accordance with recent SEBI circular no. SEBI/HO/ MIRSD/MIRSD_RTAMB/P/CIR/2022/8 dated 25th January

2022, a separate Suspense Escrow Demat Account has been opened with a Depository Participant for crediting unclaimed shares in dematerialised form lying in the Company''s Demat Suspense Account at present.

Proceeding under the Insolvency & Bankruptcy Code, 2016

No application / proceeding by / against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) is pending as on 31st March,

2023.


One Time Settlement with the Banks of Financial Institutions

No One time settlements with Banks or Financial Institutions were entered during the year.

Annexures forming part of this Report

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and forms part of this Report:

Annexure/ Page No.

Particulars

I

Particulars of Employees

II

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

III

Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity

IV

Annual Report on CSR activities and CSR Policy

V

Corporate Governance Report

VI

Business Responsibility & Sustainability Report

VII

Secretarial Audit Report

110-120

Management Discussion and Analysis Report

Appreciation

Your Directors take this opportunity to thank all the stakeholders including the Central Government, the Government of Uttar Pradesh, shareholders, farmers, customers, dealers, State Bank of India, HDFC Bank, ICICI Bank Limited, Kotak Mahindra Bank, other banks and financial institutions and all other business associates & vendors for their excellent support. Your Directors also wish to place on record their deep appreciation for the committed services by your Company''s employees.

For and on behalf of the Board of Directors

Sd/- Sd/-

Praveen Gupta Vivek Saraogi

Whole-time Director Chairman and Managing Director

DIN : 09651564 DIN : 00221419

Date: 11th May, 2023 Place: Haidergarh Place: Kolkata


Mar 31, 2022

Your Directors have the pleasure of presenting their report as a part of the 46th Annual Report, along with the Audited Accounts of the Company for the year ended 31st March, 2022.

Financial results

The financial results of the Company are summarised below:

(H in Lakhs)

Particulars

Standalone Consolidated

2021-22

2020-21

2021-22

2020-21

Revenue from operations

4,84,602.68

4,81,165.70

4,84,602.68

4,81,165.70

Profit before finance costs, tax, depreciation and amortisation, exceptional items and other comprehensive income

74,760.92

74,728.13

73,271.36

74,075.42

Less: Finance costs

3,086.89

3,929.59

3,086.89

3,929.59

Less: Depreciation and amortisation expense

11,386.49

11,187.64

11,386.49

11,187.64

Profit before share of profit of associates, exceptional items and tax

-

-

58,797.98

58,958.19

Add: Share of profit of associates

-

-

1,194.09

1,959.77

Profit before exceptional items and tax

60,287.54

59,610.90

59,992.07

60,917.96

Add/(Less): Exceptional items

5,273.75

-

(120.37)

-

Profit before tax

65,561.29

59,610.90

59,871.70

60,917.96

Less: Tax expense

14,095.52

12,633.68

13,408.15

12,938.96

Profit for the year

51,465.77

46,977.22

46,463.55

47,979.00

Other comprehensive income (net of tax)

(361.79)

(55.71)

(367.02)

(55.62)

Total comprehensive income for the year

51,103.98

46,921.51

46,096.53

47,923.38

Dividend and its Distribution Policy

In terms of the Dividend Distribution Policy of the Company, the Board of Directors of the Company had declared an interim dividend of 250% (i.e. H2.50 per share on Equity Shares of the face value of H1/- each) for the Financial Year ended 31st March, 2022. Total outgo on the interim dividend was H5101.00 Lakhs. The said Policy is available on the website of the Company at the following web-link:

https://chini.com/sustainability/governance/policies/

The Board has not proposed any final dividend for the Financial Year ended 31st March, 2022 and accordingly, the interim dividend paid during the year shall be treated as final dividend.

Reserves and surplus

The Company has transferred an amount of H20,000.00 Lakhs to the General Reserve.

Operations

The operational data of the Company for the last two sugar seasons and Financial Years are as under:

Particulars

Sugar Season

Financial Year

2021-22

2020-21

2021-22

2020-21

Sugarcane crushed (Lakhs quintals)

888.31

875.17

885.42

1032.61

Sugar produced (Lakhs quintals) *

90.58

92.47

90.96

109.79

Sugar Recovery (%) *

10.20

10.57

10.27

10.63

* Net of sugar loss due to diversion of sugarcane towards B-heavy molasses

Industry scenario and outlook

India began the sugar season 2021-22 (October to September) with an opening inventory of around 8.2 MMT (Metric Million Tonnes). Sugar production for the current season is estimated at 35.5 MMT, around 4.3 MMT higher than the previous season''s production of 31.2 MMT. Current year''s production estimate is net of sugar sacrifice of around 3.4 MMT towards Ethanol. We are going to witness historic records as far as production, sugar diversion into Ethanol diversion, Exports and domestic consumptions are concerned.

Maharashtra, Uttar Pradesh (UP) and Karnataka as usual remains the three largest sugar producing states and are expected to produce ~ 13.8 MMT, 10.2 MMT and 6.1 MMT of sugar in the ongoing season in comparison to the previous season''s production of 10.6 MMT, 11.1 MMT and 4.5 MMT respectively.

The reasons for higher production in Maharashtra is due to increase in acreage and significant increase in yield at the farm level, thanks to abundant water availability across the Deccan plateau.

The reasons for lower production in UP are varied: larger diversion of sugarcane to ethanol via the B-heavy molasses/sugarcane juice route, lower yields owing to weather conditions and effect of red rot disease in certain pockets.

In Karnataka likewise Maharashtra, higher acreage and yield led to higher production.

The domestic demand for sugar is expected to be around 27.8 MMT as compared to 26.6 MMT in the previous season. The demand of 27.8 MMT will be a new record for the Indian sugar industry.

Sugar exports in the current season is expected to reach ~9.2 MMT as compared to ~7.2 MMT in previous season. This is the most interesting and important phenomena of the Sugar Season 21-22 as the quantum of export from India is not only the highest ever in the history of Indian sugar industry but also it has been achieved without any financial support from the Government of India.

There are certain reasons for this historic exports such as:

• The weak Brazilian sugar crushing season for the previous year

• War between Russia and Ukraine raised the crude oil as well as gasoline prices resulting in to substantial rise of Ethanol Parity price and increased diversion towards ethanol.

This consequently resulted in increase in global sugar prices as well. Industry seized the opportunity to export more sugar.

As a result, the carry forward stock of sugar in the country as on 30th September 2022, is expected to be around 6.7 MMT or around 3 months of consumption.

Domestic sugar prices for UP based millers ranged between H32.50 and H37.50 per kg through the course of the year.

The Government continued with most of the policies related to sugar and ethanol that had been announced in the previous years with the objective to support sugar realisations and to ensure that farmers are paid on time.

The following policies were sustained:

• Fair & Remunerative Price (FRP) of sugarcane for the sugar season 2021-22 was revised to H290 per quintal from H285 per quintal in the previous season (linked to a basic recovery of 10%).

• State Advised Price (SAP) of sugarcane for the state of Uttar Pradesh for the sugar season 2021-22 was increased to H350 per quintal from H325 per quintal in the previous season (for early maturing variety of sugarcane).

• The pricing methodology for ethanol remained unchanged. Ethanol prices are announced annually by the Central Government based on a formula, which factors the price of sugar and FRP of sugarcane to calculate ethanol procurement prices. Ethanol prices are delinked from crude or petrol prices. Ethanol prices for the supply period from December 2021 to November 2022 were increased to H63.45, H59.08 and H46.66 per BL for ethanol produced from direct cane juice/sugar syrup, B-heavy molasses and C-heavy molasses respectively

compared to H62.65, H57.61 and H45.69 per BL in the previous period.

• Along with MSP, stock holding limits on mills in the form of maximum monthly sale quotas continued.

• The Oil marketing companies announced differential and attractive prices for ethanol produced from damaged/surplus food grains.

• Soft loans are encouraged through banks for commissioning new distillery capacities or augmentation of existing capacities, which could facilitate higher ethanol production and reduce the sugar surplus through the diversion of B-heavy molasses and direct cane juice/sugar syrup away from sugar to ethanol as well as for production of Ethanol from damaged/surplus foodgrains.

• Duty structure on export and import of sugar remained same as per last year.

• A lower GST of 5% on ethanol.

It indeed is a fact that the Government remained cognizant of the health of the sugar sector and all its policy interventions were supportive, some measures are of importance to enable the industry to become self-sufficient.

• Increase the Minimum Selling Price (MSP) of sugar (which is a part of policy) to H36 per kg to cover all India average production cost of sugar. A proposal to raise MSP has been pending for approval at the Cabinet level.

• The blending proportion of ethanol for the supply year beginning from December 2022 needs to be increased towards 13% as an interim measure before industry becomes capable of supplying ethanol in larger quantities to address the 20% blending requirement by 2025.

• In order to achieve this 20% blending targets, as well as to address the situation created by ever increasing sugar production, as an incentive, the price of ethanol via B-Heavy molasses route as well as through direct cane juice/syrup routes need to be bought at an attractive level.

The Department of Food & Public Distribution, Government of India, sometime ago constituted a working committee comprising of members from Ministry of Food & Public Distribution, Agriculture & Farmer Welfare, Petroleum & Natural Gas along with representative from MSME, Niti Ayog, NSI, VSI, trade associations among others to look into the aspect of sugar cane price rationalisation and other matters to present a longterm sustainable solution for the entire sugar eco-system after due consultation. Further action in respect of the same needs to be undertaken on a priority basis.

Global scenario

The Global sugar year 2021-22 kick started with two fundamentals questions ;the first one was how low CS Brazil production would go down for the 2021-22 sugar year and the other one was

how big would be the Indian exports without any Government subsidy support.

Finally, as the Brazilian session ended, it was found that CS Brazil had managed to end up with almost 32 Million tons of sugar much lower than the previous year however it was not as low as many trade/research houses estimated. The Indian exports, however, has indeed made a historic record which is already well elaborated in the previous sections.

Meanwhile the 2021-22 Thailand Crushing session also ended up recently and it had recovered significantly from its 2020-21 poor performance and produced 10.21 MMT sugar for the 2021-22 crop year.

Europe including UK did not provide any surprise and it is expected to produce almost 17.5 MMT sugar however Chinese production had a worse performance and it is most likely that the final number of Chinese domestic production to end up around 9.7 MMT, almost a Million ton lower than the previous year.

The global sugar consumption trend is hinting a northward spike on account of the reduction in Covid cases across the globe. Also the ongoing Ukrainian War is forcing most of the countries to stock up their essential commodities (which includes Sugar also) in order to address the domestic food inflationary pressures and shortages.

As we are aware that the global geopolitical tensions are raising the Oil prices much above 100 dollars mark and this is forcing most of the energy importing nations to switch towards more ethanol/ other renewable consumptions. This has invariably brought some tailwinds for sugar sectors. Moreover the lower acreage in relation to US Corn plantation is also another supportive thing for sugar price as this leads to more and more Brazilian millers switch towards ethanol production than Sugar from their current year sucrose contents. On account of climatic abnormality, the agricultural yield may remain weak in this year. Also, there are news that Brazilian sugar Mix may go down substantially in 202223 sugar session on account of higher ethanol demand. Moreover, any increase in gasoline prices by Petrobas will eventually raise the Ethanol parity price further and act bullish for Sugar prices.

The production from Indian sub continents including Thailand, however, will see a spike in next crushing session. Also Indian production may not see much downside from the current year production numbers in spite of much higher diversions towards ethanol.

So, it is expected that the forthcoming sugar session will have lower production from Brazil whereas the same could be compensated by India and Thailand. However higher consumption trend shows that the market will be evenly balanced with a minor surplus of 2 Million tons.

We strongly believe that the global sugar price will not have any negative surprise in near to intermediate term rather on account of a higher consumption due to declining Covid restrictions and higher Oil prices, it may see some strength in terms of price

actions and could hover at current 19-20 c/lb with a bias for further upside above 20.50 c/lb even. Overall, the sugar sector across the globe will continue to have tailwinds in days ahead.

BCML''s performance during FY 2021-22

Revenues earned from operations during the year stood at H4,84,602.68 lakhs as compared to H4,81,165.70 lakhs for the previous year, an increase of meager 0.71%. Revenues were stable on account of higher realisations despite lower sugar volumes. The distillery segment delivered robust performance. The Company no longer sees cogeneration as a separate segment. The Company earned a total comprehensive income of H51,103.98 lakhs during the year ended 31st March 2022 as compared to H46,921.51 lakhs in the previous year.

Segment-wise performance and outlook Sugar

During the Financial Year ended 31st March 2022, sugarcane crushing stood at 885.42 lakhs quintals as compared to 1032.61 lakhs quintals in previous year, a decrease of 14.25% over previous year. This was on account of weather related issues and effect of previous years red rot disease which led to lower availability of cane. Sugar recovery for the year stood at 10.27% as compared to 10.63% in previous year due to weather related issues. During the Financial Year 2021-22 the Company has diverted 613.41 lakhs quintals (69.3%) of sugarcane for producing B-heavy molasses as compared to 675.56 lakhs quintals (65.4%) in previous year, owing to which sugar recovery was lower. In the process the Company sacrificed 11.32 lakhs quintals of sugar as compared to 11.73 Lakhs quintals in previous Financial Year. Had there been no diversion, sugar recovery for the year would have been 11.55% as compared to 11.77% in previous year. The Company is working hard at the ground level with the farmers and societies towards varietal rebalancing and developing new varieties which can be beneficial for both the farmers and millers. Necessary steps are also being taken to educate the farmers on modern agricultural practices.

During the year, the Company sold 102.63 lakhs quintals of sugar as compared to 113.26 lakhs quintals in previous year. Sales for the current year include 5.40 lakhs quintals for exports as compared to 5.58 lakhs quintals in previous year. Domestic sugar realization for the year stood at H34.79 per kg as compared to H32.37 per kg in previous year. Blended sugar realisation (Domestic along with export) stood at H34.71 per kg as compared to H32.01 per kg in previous year.

Sugar inventory as on 31st March 2022 stood at 52.44 lakhs quintals valued at ~H34.22 per kg as compared to 64.40 lakhs quintals valued at ~H31.28 per kg in previous year.

Distillery

The Company ''s distillery segment produced 1631.05 lakhs BL of industrial alcohol during the year as compared to 1705.64 lakhs BL during the previous year. Lower production was attributable to lower cane availability which in turn led to lower molasses for

distillation. During the year the Company expanded the distillery capacity at Gularia from 160 KLPD to 200 KLPD. In addition, the Company was able to run its distilleries at optimum capacity owing to zero liquid discharge status at all its distilleries. In its endeavor to produce ethanol from B-heavy molasses route by diverting more cane for the same, the Company produced 1329.54 lakhs BL of Ethanol out of B-heavy molasses during the year as compared to 1017.73 lakhs BL in previous year.

Ethanol sales during the year produced from B-heavy molasses stood at 1459.48 lakhs BL at an average realisation of H58.13 per BL as compared to 958.54 lakhs BL at an average realisation of H55.53 per BL in previous year. Ethanol sales from molasses produced from C-heavy route stood at 109.98 lakhs BL at an average realisation of H45.96 per BL as compared to 494.50 lakhs BL at an average realisation of H43.92 per BL in previous year. Ethanol sales from molasses produced from C-heavy route was lower in the current year as the Company chose to produce and sale Ethanol produced from B-heavy molasses route with an intent to sacrifice higher quantity of sugar. Blended realisation for total industrial alcohol (including ENA) sales stood at H53.38 per BL as compared to H48.35 per BL in previous year.

Cogeneration

Company no longer sees cogeneration as a separate segment. Cogen/incineration divisions have been merged with sugar/ distillery based on their operational matrix. This was done as the basic purpose of these were to meet the captive requirements and the surplus power generated was exported to the state electricity grid.

From an operational perspective, power generated during the year stood at 7271.56 lakhs units as compared to 8065.31 lakhs units in previous year, a decrease of 9.8% as the Company decided to sell more bagasse outside than to use it to generate power in view of lowering of power tariff by UPERC. Power exported to Uttar Pradesh Power Corporation Limited stood at 3493.25 lakhs units as against 4262.54 lakhs units in previous year, a decrease of 18.1%. Average realisation for the year stood at H3.30 per unit as compared to H3.17 per unit in previous year. The matter of reduction in tariff by UPERC is under litigation and is pending at Hon''ble High Court Allahabad.

Others

The Company also manufactures Granular Potash Fertilizer, Bio-Zyme and Bio-Pesticides for the healthy and salubrious growth of sugarcane and also provide soil health cards to the farmers by analysing the soil samples of the farmers. It produces mainly three products namely Granular Potash, Jaiv-Shakti and Paudh-Shakti. These products provide strength to sustain under the draught conditions, increases metabolism and root development. The Company sells these products to farmers at subsidised rates and to the Indian fertilizer giant, India Farmers Fertilizer Cooperative Limited (IFFCO). Revenues during the year stood at H1944.99 lakhs as compared to H2179.34 lakhs in previous year.

A detailed analysis of the Company''s operations, expectations and business environment has been provided in the Management Discussion and Analysis section, which forms a part of this Report.

Subsidiary and Associate Companies

As on 31st March, 2022, the Company has one Associate Company, namely, Auxilo Finserve Private Limited (AFPL). The Company holds 44.36% of share capital in AFPL as on 31st March, 2022 as compared to 45.05% as on 31st March, 2021. The percentage holding has changed due to the issuance of equity shares by AFPL under the Employee Stock Option Scheme and conversion of Optionally Convertible Preference Shares to Equity Shares. AFPL is a Systemically Important Non-Deposit Accepting NBFC registered with Reserve Bank of India (RBI). The main objective of AFPL is to originate, provide and service loans to students pursuing education and provide ancillary services in relation to the said business activity and provide infrastructure or working capital loan to educational institutions.

During the Financial Year 2021-22, AFPL has earned revenue of H8719.23 Lakhs as compared to H7509.91 Lakhs for the previous Financial Year and profit after tax of H1256.79 Lakhs as compared to H962.23 Lakhs for the previous Financial Year. AFPL has registered growth of 16.10% and 30.61% in revenue and profit after tax over the previous Financial Year, respectively.

During the year under review, the Board of Directors of Visual Percept Solar Projects Private Limited ("VPSPPL") at their meeting held on 20th December, 2021 had declared an Interim Dividend of H19/- per equity shares. Accordingly, the Company had received H 1491.98 lakhs towards interim dividend from VPSPPL.

Further, during the year under review, the Company had signed a Share Purchase Agreement (SPA), dated 10th February, 2022 with Torrent Power Limited, Blue Daimond Properties Private Limited ("BDPPL"/other shareholder holding balance 55% Equity Shares in VPSPPL) and Visual Percept Solar Projects Private Limited ("VPSPPL/Associate Company") to sale and transfer the entire stake held by the Company (holding 45% Equity Shares in VPSPPL) to Torrent Power Limited. Subsequently, 7852500 Equity Shares of H10/- each held by the Company were transferred to Torrent Power Limited on 15th February, 2022 at an agreed consideration of H7317.71 Lakhs. Upon completion of the transfer formalities, VPSPPL ceased to be an Associate Company of the Company with effect from 15th February, 2022.

Consolidated Financial Statements

In compliance with the provisions of the Companies Act, 2013 (as amended) (the "Act") and implementation requirements of the Indian Accounting Standards Rules on accounting and disclosure requirements, as applicable, and as prescribed under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as

amended, (the "Listing Regulations"), the Audited Consolidated Financial Statements form part of this Annual Report.

Pursuant to Section 129(3) of the Act, a statement in Form AOC-1 containing the salient features of the financial statements of the Company''s Associate Companies are also provided in this Annual Report.

The audited financial statements of the Company including the consolidated financial statements and related information of the Company are available on the website of the Company at www.chini.com. Since, the Company doesn''t have any subsidiary, the requirement under Section 136 of the Act about separate financial statements does not apply to it.

Share Capital

During the year under review, the Board of Directors of the Company at its meeting held on 9th August, 2021, approved the buyback of equity shares, from the open market route through the stock exchanges, amounting to H215.25 crores (maximum buyback size, excluding buyback tax) at a price not exceeding H410 per share (maximum buyback price). The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters / the Promoter Group of the Company) under the open market route through the stock exchange. The buyback of equity shares through the stock exchange commenced on 17th August, 2021 and was completed on 21st October, 2021. During this buyback period, the Company had bought back

59.60.000 (Fifty Nine Lakhs Sixty Thousand) Equity Shares at an average price of H361.14 (Rupees Three Hundred Sixty One and Fourteen Paisa Only) per Equity Share. Accordingly, the Company had deployed H215.24 Crores for the buyback, which represents 99.99% of the Maximum Buyback Size.

Post the Buyback of 59,60,000 equity shares, the equity share capital of the Company stood at H2040.40 Lakhs consisting of

20.40.40.000 equity shares of H1 each as on 31st March, 2022.

Employee Stock Option Scheme

There are no outstanding stock options and no stock options were either issued or allotted during the year.

Credit Rating

Details of Credit Ratings assigned to the Company are given in the Corporate Governance Report.

Directors

Pursuant to the provisions of Section 152(6) of the Act, the members of the Company at the 45th Annual General Meeting (AGM) held on 13th September, 2021, re-appointed Dr. A. K. Saxena (DIN: 00846939) who was liable to retire by rotation.

Further, Ms. Mamta Binani (DIN: 00462925) who was appointed as an Additional Director under the category of Independent Director of the Company, with effect from 5th November, 2020 was appointed as an Independent Director of the Company for a term of five consecutive years beginning from 5th November, 2020 upto 4th November, 2025 by the members of the Company at the 45th AGM held on 13th September, 2021.

During the year under review, the Board of Directors of the Company (based on the recommendation of the Nomination & Remuneration Committee) at its meeting held on 2nd February, 2022 had re-appointed Mr. Vivek Saraogi as the Managing Director of the Company for a period of 5 years with effect from 1st April, 2022 to 31st March, 2027. The said re-appointment was approved by the Shareholders of the Company with overwhelming majority on 26th March, 2022 (i.e. last date for remote e-voting).

Further, based on the Recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company at its meeting held on 24th May, 2022 approved the appointment of Mr. Vivek Saraogi as the Chairman and Managing Director of the Company. While considering the said appointment as the Chairman, the Board has considered the benefits of integrating the duties of Chairperson and Managing Director and also considered the leadership qualities, industrial achievements, skill set, career trajectory of Mr. Saraogi and also his incomparable know how of the Indian Sugar Industry and his recognition of the same in the Industry.

During the year under review none of the Directors of the Company are disqualified as per the applicable provisions of the Act.

Director retiring by rotation

Mr. Naresh Dayal (DIN: 03059141) retires from the Board by rotation and being eligible, and offers himself for re-appointment. The Board of Directors recommends the said re-appointment. Resume and other information regarding aforementioned Director seeking re-appointment as required under Regulation 36 of the Listing Regulations and SS-2 on General Meetings shall be given in the Notice convening the ensuing AGM.

Changes in Board Composition

During the year under review, Mr. Sumit Mazumder has resigned as an Independent Director and Chairman of the Company with effect from closure of the business hours of 18th February 2022. Mr. Mazumder informed that his resignation was purely on account of personal reasons and to pursue areas of his interest / hobbies. Mr. Mazumder has also confirmed that there are no other material reasons attributable / connected with the Company for his resignation. The Board places on record its deep appreciation for the contributions of Mr. Mazumder during his tenure as an Independent Director and Chairman of the Company.

Other Information

Appointment of Directors is made in accordance with the Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity as recommended by the Nomination & Remuneration Committee and approved by the Board of Directors.

Other details pertaining to the Directors, their appointment / cessation, if any, during the year under review and their remuneration are given in the Corporate Governance Report annexed hereto and forming part of this Report.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Regulation 16(b) of the Listing Regulations. The Independent Directors have also confirmed that they have registered their names in the data bank of Independent Directors as being maintained by Indian Institute of Corporate Affairs (IICA) in terms of the Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).

The Board of Directors confirm that the Independent Directors appointed during the year also meet the criteria of expertise, experience and integrity in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended).

Separate Meeting of Independent Directors

Details of the separate meeting of Independent Directors held in terms of Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in the Corporate Governance Report.

Directors'' Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Act and Regulation 18 of the Listing Regulations in the preparation of the annual accounts for the year ended 31st March, 2022 and state that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. The Directors have 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 at the end of the Financial Year and of the profit of the Company for that period;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the

the Company are Mr. Vivek Saraogi, Chairman and Managing Director, Mr. Pramod Patwari, Chief Financial Officer and Mr. Manoj Agarwal, Company Secretary. During the year, there has been no change in the Key Managerial Personnel of the Company.

Details pertaining to the remuneration of KMPs employed during the year have been provided in the Annual Return.

Board Meetings

The Board met 7 (seven) times during the Financial Year under review, the details of which are given in the Corporate Governance Report attached to this Report.

Committees of the Board

Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted/ reconstituted (whenever necessitated) various committees such as Audit Committee, Nomination & Remuneration Committee, Stakeholders'' Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee and Executive Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report. Further the Independent Directors in their Meeting held on 21st May, 2022 decided that an ESG Committee should also be constituted for focused attention on ESG matters. The same is presently being constituted.

Compliance of Secretarial Standards

The Company has complied with the applicable Secretarial Standards, i.e., SS-1 and SS-2 issued by the Institute of Company Secretaries of India.

Audit Committee

All recommendations made by the Audit Committee during the year were accepted by the Board.

Vigil Mechanism / Whistle-Blower Policy

The Company has in place a Vigil Mechanism / Whistle-Blower Policy to deal with unethical behavior, victimisation, fraud and other grievances or concerns, if any. The aforementioned whistleblower policy is available on the Company''s website at the following web-link:

https://chini.com/sustainability/governance/policies/

Policy on Selection and Remuneration of Directors

The Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity is annexed as Annexure - III.

Board Evaluation

Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations, the Board has carried out the evaluation of its

Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. There is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12), read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure I enclosed hereto and forms part of this report. In accordance with the provisions of the aforementioned section, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid rules form part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company, excluding the aforesaid information. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary.

Prevention of Sexual Harassment

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy viz., Policy on Prevention of Sexual Harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). The Company is also in compliance with the provisions of the POSH Act, with respect to the constitution of Internal Committee. During the year under review, no complaint/case was filed or was pending for redressal.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act are given in Annexure - II attached hereto and forms part of this Report.

Deposits

The Company has not accepted any deposit from the public and consequently, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Key Managerial Personnel

During the year under review, pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel (KMPs) of

own performance and that of its Committees as well as evaluation of performance of the individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached to this Report.

Corporate Social Responsibility

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended), the Company has a Corporate Social Responsibility ("CSR") Committee. The details of composition and meetings held during the year of the Committee are mentioned in the Corporate Governance Report.

The CSR activities of the Company are focused on Sustainable Livelihood, Education including skill development for women empowerment, Healthcare, Sanitation & safe drinking water; Rural Development; Environment Sustainability and Disaster Management. The Company had spent an excess of H 101.61 Lakhs in 2020-21 and the same was available for set off. Accordingly, the Company in line with the CSR commitment has spent H1119.67 Lakhs towards the CSR interventions and utilised H16.09 Lakhs from the amount available for set off to meet the mandatory CSR obligation of H1135.76 lakhs. After adjustment of the amount of H 16.09 Lakhs, an amount of H85.52 Lakhs is available for set off till Financial Year 2023-24.

The CSR Policy of the Company as approved by the Board can be accessed on the Company''s website at the following web-link: https://chini.com/sustainability/governance/policies/

Brief details of some of the CSR projects undertaken by the Company are given below:

Nayi Ummeed Project

The Company through Balrampur Foundation aims to improve the quality of life for the rural community in Uttar Pradesh through a holistic approach that touches all aspects of their daily lives under its Nayi Ummeed initiatives. Its CSR interventions are not limited to aid and funding; it aims to empower the rural community with the right knowledge, potent tools & technology, best health care services, standardised education and improved rural infrastructure. As per the Impact Assessment study conducted by an independent agency, the Company has been able to achieve impressive results and create a meaningful and needful impact in the community.

Disaster Management (Covid -19)

During the year under review the Company has installed two (2) Oxygen Generation Plants in district hospitals of Balrampur and Barabanki located in Uttar Pradesh. Further, during these Covid times, the Company through its CSR interventions took special care of the health and wellbeing of the community by providing ambulances at ten locations for ferrying patients from remote areas, improving infrastructure of hospitals, carrying

out sanitisation drive in public areas and government offices, distributing essential items and by supporting organisations which were carrying out such benevolent activities.

Keep your city clean project

Since cleanliness is the foundation of hygiene and is also the panacea for Covid and other illness, the Company embarked on a Keep your city clean project. Under the programme, the Company placed waste (litter) bins in strategic places of Kolkata, so that litter (waste) could be thrown in designated bins (36000 Kgs waste collected during the year). The staff employed by the vendor for cleaning and maintaining the bins were rag pickers and street urchins who were trained and equipped with proper gear and provided decent employment opportunities. Also, the entire waste collection process is done with the help of e-vehicles and all bins are geotagged.

Mobile Science Lab Project

The Company in association with Agastya International Foundation is running four mobile science labs in the four districts of Uttar Pradesh i.e. Balrampur, Barabanki, Lakhimpur Kheri & Gonda. The aforesaid labs visit the government schools as a travelling laboratory for hands-on activities of Science and facilitate the learning of students. The initiative aims at encouraging the students to inculcate an experiential learning environment and empowering government school educators to design creative ways to nurture the budding scientists. During the Covid times, learning methods were evolved and digital training was also provided so that children do not lose out on their training part. Principal and students of various schools are very happy with the initiative.

Impact Assessment

The Board of Directors of the Company has voluntarily appointed an independent impact assessment agency viz. Third Planet Foundation to carry out the Impact Assessment of the societal activities carried out by the Company under its Corporate Social Responsibility interventions. As per the Impact Assessment Report issued by Third Planet Foundation in May, 2022, the CSR interventions of the Company have created a meaningful and needful impact in the community and most of the thematic areas have shown satisfactory, outcomes and impact across the locations. The CSR Committee and the Board of Directors of the Company took a note of the same at their meetings held on 21st May, 2022 and 24th May, 2022, respectively. The Impact assessment Report is available on the Company''s website at the following web-link: https://chini.com/sustainability/social/

The details of the CSR initiatives undertaken by the Company during the Financial Year 2021-22 are outlined in the Annual Report on CSR activities which along with CSR Policy is attached as Annexure IV.


Inter-corporate Loans and Investments

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements forming part of this Annual Report.

Related Party Transactions

During the Financial Year ended 31st March, 2022, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arm''s length basis. During the year under review, your Company did not enter into any Related Party Transaction which requires approval of the Members. There have been no materially significant related party transactions made by the Company with the Promoters, the Directors or the Key Managerial Personnel which may be in conflict with the interests of the Company at large.

Since all related party transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore, details required to be provided in the prescribed Form AOC - 2 is not applicable to the Company. During the year the Board has reviewed and amended the Policy on Related Party Transactions. The Policy as approved by the Board can be accessed on the Company''s website at following web-link: https://chini.com/sustainability/governance/policies/

The details of the related party transactions are set out in the notes to the financial statements.

Risk Management Framework and Policy

The policy on risk assessment and minimisation procedures as laid down by the Board are periodically reviewed by the Risk Management Committee, Audit Committee and the Board. The policy facilitates identification of risks at appropriate time and ensures necessary steps to be taken to mitigate the risks. Brief details of risks and concerns are given in the Corporate Governance Report and Management Discussion and Analysis Report. During the year, the Board reviewed and amended the Risk Management Framework and Policy and the same is hosted on the website of the Company.

Annual Return

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the draft Annual Return of the Company for the Financial Year 31st March, 2022 is uploaded on the website of the Company and can be accessed at https://chini. com/investors/financials/

Material Changes and Commitments

Except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of the Company between the end of the Financial Year i.e. 31st March, 2022 and on the date of this Report. The impact of COVID-19

pandemic has not been material on the financial performance of the Company.

Significant and Material Orders

There are no significant/ material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations. During the year under review, no Corporate Insolvency Resolution application was made or proceeding was initiated, by/against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended). Further, no application / proceeding by / against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) is pending as on 31st March, 2022.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were reviewed and no reportable material weakness was observed.

Corporate Governance

In terms of the provisions of Regulation 34(3) of the Listing Regulations, the Corporate Governance Report and the Certificate on the compliance of conditions of Corporate Governance form part of the Annual Report and are given separately as Annexure -V and the Management Discussion and Analysis is given in Page no. 106 of the Annual Report.

Business Responsibility Report / Business Responsibility and Sustainability Report

Regulation 34(2) of the Listing Regulations, inter alia, provides that the annual reports of the top 1000 listed entities based on market capitalisation (calculated as on 31st March of every financial year), shall include a Business Responsibility Report. Since the Company is one of the top 1000 listed entities, it has presented its Fifth Business Responsibility Report for the Financial Year 202122, as Annexure - VI to this Report. Further in the initial section of the Annual Report, the Company has given an ESG Report which voluntarily discloses some of the information required as per the Business Responsibility and Sustainability Report on best effort basis.

Auditors

Statutory Auditors and their Audit Report

M/s. Lodha & Co, Chartered Accountants (Firm Registration No. 301051E), were appointed as Statutory Auditors of the Company at the 41st AGM of the Company held on 30th August, 2017, to hold office till the conclusion of the ensuing 46th AGM. Hence, M/s. Lodha & Co, Chartered Accountants are eligible to be reappointed for a further term of 5 (five) years, in terms of provisions of Sections 139 and 141 of the Act. Accordingly, the Board of Directors of the Company at their meeting held on 24th May, 2022, based on the recommendation of the Audit Committee

and subject to the approval of the shareholders of the Company at the ensuing AGM, have approved the re-appointment of M/s. Lodha & Co, Chartered Accountants, as the Statutory Auditors, for a further period of 5 (five) years i.e. from the conclusion of the 46th AGM till the conclusion of 51st AGM of the Company.

The Company has received written consent and certificate of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Act and Rules issued thereunder, from M/s. Lodha & Co, Chartered Accountants. They have confirmed to hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under the Listing Regulations.

The Audit Committee and Board of Directors of the Company had considered various factors such as independence, credentials, technical skills and audit team, etc. while considering the reappointment of the M/s. Lodha & Co, Chartered Accountants as the Statutory Auditors of the Company.

The reports given by the Auditors, M/s. Lodha & Co, Chartered Accountants on the standalone and consolidated financial statements of the Company for the year ended 31st March, 2022 form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports.

The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.

Secretarial Auditors and their Audit Report

Pursuant to the provisions of Section 204 of the Act, the Company has appointed M/s. MKB & Associates, Company Secretaries (Mr. Manoj Kumar Banthia, Partner), to undertake the secretarial audit of the Company for the Financial Year 2021-22. The Secretarial Audit Report for the Financial Year 2021-22 is attached as Annexure - VII and forms part of this Report. The contents of the said Audit Report are self- explanatory and do not call for any further comments by the Board. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Auditors and their Audit Report

During the year under review, pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the Board has appointed M/s. Mani & Co., Cost Accountants, to conduct cost audit of the cost records maintained by the Company relating to sugar (including industrial alcohol) and electricity for the financial year ended 31st March, 2022.

On the date of this Report, your Directors have, on the recommendation of the Audit Committee, appointed M/s. Mani & Co., Cost Accountants, as the Cost Auditors of the Company for the Financial Year 2022-23. As required under the Act, a resolution seeking ratification of the remuneration payable to the Cost Auditors shall form part of the Notice convening the ensuing AGM.

Annexures forming part of this Report

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report:

Annexure

Particulars

I

Particulars of Employees

II

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

III

Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity

IV

Annual Report on CSR activities and CSR Policy

V

Corporate Governance Report

VI

Business Responsibility Report

VII

Secretarial Audit Report

Appreciation

Your Directors take this opportunity to thank all the stakeholders including the Central Government, the Government of Uttar Pradesh, shareholders, farmers, customers, dealers, State Bank of India, HDFC Bank, ICICI Bank Limited, Kotak Mahindra Bank, Bank of Baroda, other banks and financial institutions and all other business associates & vendors for their excellent support. Your Directors also wish to place on record their deep appreciation for the committed services by your Company''s employees.


Mar 31, 2018

The Directors have the pleasure of presenting their report as a part of the 42nd Annual Report, along with the Audited Accounts of the Company for the year ended 31st March, 2018.

Financial Results

The financial results of the Company are summarised below:

(Rs. in Lacs)

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Revenue from operations

440072.06

364099.71

440072.06

364099.71

Profit before finance costs, tax, depreciation and amortisation, exceptional items and other comprehensive income

47943.54

89451.32

48199.40

89409.73

Less: Finance costs

5203.00

5542.80

5203.00

5542.80

Less: Depreciation and amortisation expense

9522.11

10493.71

9522.11

10502.84

Profit before share of profit of associates and tax

-

-

33474.29

73364.09

Add: Share of profit of associates

-

-

1041.11

127.43

Profit before tax

33218.43

73414.81

34515.40

73491.52

Less: Tax expense

11106.37

14186.16

11348.91

14215.56

Profit for the year

22112.06

59228.65

23166.49

59275.96

Other comprehensive income (net of tax)

(455.20)

(362.95)

(456.74)

(362.92)

Total comprehensive income for the year

21656.86

58865.70

22709.75

58913.04

Dividend and its Distribution Policy

The Board of Directors of the Company declared an interim dividend of 250% (i.e. RS.2.50 per share on Equity Shares of the face value of RS.1/- each) for the financial year ended 31st March, 2018. Total outgo on the interim dividend was RS.7071.69 Lacs (including dividend distribution tax of RS.1196.13 Lacs). The Board has not proposed any final dividend for the financial year ended 31st March, 2018 and accordingly, the interim dividend paid during the year shall be treated as final dividend.

Since the Company is one of the top 500 listed entities based on market capitalisation (calculated as on March 31st of every financial year), pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended by the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, the Dividend Distribution Policy, has been annexed to this Report as Annexure - I and the same is also available on the website of the Company at the following web-link: http://chini.com/wp-content/uploads/2018/07/Dividend_ Distribution_Policy_2017.pdf

Operations

The operational data of the Company for the last two sugar seasons and financial years are as under:

Particulars

Sugar season

Financial year

2017-18

2016-17

31.03.2018

31.03.2017

Sugarcane crushed (in lac quintals)

1080.39

838.54

927.83

794.65

Sugar produced (in lac quintals)

117.10

90.01

100.56

84.70

Recovery (%)

10.84

10.74

10.86

10.66

[The data for sugar season 2017-18 includes full season workings of all units except for Kumbhi and Gularia]

Industry scenario and outlook

The sugar season 2017-18 commenced with a carryover stock of around 4 million tonnes. Sugar production for the season was initially estimated at 26 million tonnes but revised multiple times at the industrial and ministerial levels. Finally, the country was estimated to have produced ~32 million tonnes of sugar in sugar season 2017-18.

Sugar production for the 2017-18 season surpassed the previous record of 28.3 million tonnes by end-March. This disproportionately higher production was attributed to the sowing of superior cane varieties and higher yields across cane-producing states. Consequently, Maharashtra was estimated to have produced ~10.7 million tonnes of sugar compared to 4.2 million tonnes in the last season. Karnataka was estimated to have produced ~3.6 million tonnes compared to 2.2 million tonnes in the previous season. Uttar Pradesh also reported increased sugar production of ~12 million tonnes compared to 8.8 million tonnes in the previous season, making it the largest sugar producing state for two years in a row.

Moreover, as per field reports, it is expected that the the following season’s cane crop production will not be lower than this year’s production. The higher price of sugarcane with respect to other cash crops has always induced farmers to plant more cane, and this will continue to hold true.

The market probably had anticipated this higher production well in advance. Subsequently, sugar prices began to erode from the beginning of the 2017-18 season and continued unabated following every upward production revision. Consequently, ex-factory sugar prices dropped from RS.37 per kg to lower than RS.27 per kg in Uttar Pradesh. The industry is in a precarious situation where the current sugar realisation is insufficient to cover raw material procurement costs.

This has brought about a situation where the country’s sugar industry is facing a serious and unprecedented cash flow mismatch, resulting in a mammoth cane payment arrears of around RS.20,000 crore as on 31st of March 2018, which could double by March 2019. Realising the gravity of the situation, the Government of India recently announced a RS.55 per tonne cane crushing subsidy in order to partly offset the steep rise in cane procurement costs. However, this may not be enough to overcome the current crisis. Serious efforts need to be undertaken by the Central and State Governments to address the crisis of oversupply along with the mismatch between cane procurement prices and sugar sale prices.

With this huge projected surplus, the opening inventory for next season stands at ~8.5 million metric tonnes (after considering that 2 million metric tonnes of sugar will be exported by September 2018 as announced by the Central Government). A static in domestic consumption growth has made the demand-supply scenario vulnerable with the closing stock in September 2019 pegged at ~15 million metric tonnes without any further export, indicating a further downward slide in the sugar prices.

Against this backdrop, the Central Government has announced measures like increasing import duties, removal of export duties, imposition of stock holding limits and the MIEQ scheme in order to export 2 million metric tonnes of sugar. However, these steps have not managed to revive sugar prices, thus far, making a more proactive governmental interventions necessary to save the industry, which represents the lifeline of the Indian agronomic ecosystem.

- The Central Government needs to announce 6 million metric tonnes of export quota for raw and white sugar by August 2018 so that mills can start producing from October 2018 assisted by the production subsidy.

- The State Governments need to provide subsidies with respect to cane price arrears. The cane pricing policy needs to be scientifically restructured taking into account a long-term perspective.

- Staggered cane price payment structure need to be provided to farmers.

- The GST rate on ethanol needs to be reduced and consequent benefits need to be passed on to millers.

- Ethanol prices need to be increased.

- A policy needs to be framed and implemented that encourages the production of B-heavy molasses to optimise the product mix in favour of ethanol.

- A buffer stock of 3 to 4 million metric tonnes of sugar needs to be maintained over the next two years.

- An aggressive export policy needs to framed and implemented with India’s neighbouring countries under preferential arrangements. These steps need to be undertaken on an emergency basis because the crisis that is being encountered by the industry is not a ‘sentimental’ one but painstakingly ‘real’ with the need to reduce sugar inventory as quickly as possible.

The global sugar sector environment has not been particularly supportive either. The current global production is expected to result in a surplus with increased output in Brazil, Thailand, and the European Union. Centre-South Brazil completed the marketing year 2017-18 with a production of 36 million tonnes of sugar. Experts feel that Brazil will cut down its sugar output in the next season following the global glut and depressed prices. This may result in Brazil concentrating more on ethanol owing to the better price parity on offer. Production in Thailand is expected to be ~14.5 million tonnes with exports estimated at ~11 million tonnes compared to ~7.5 million tonnes in the previous year. China’s production in 2017-18 was estimated at 10.25 million tonnes. With an increase in the customs duty on sugar imports, China’s import during 2017-18 dropped considerably. Raw sugar prices dropped below 11cents per pound following the announcement that surplus sugar available in the global market could increase by ~12 million tonnes by the end of the year. Although, the global surplus is expected to reduce by ~6 million metric tonnes, it may not prove helpful when it comes to combating the threats posed by the global surplus scenario .

BCML’s performance during 2017-18

Revenues earned from operations during the year improved to RS.4,40,072.06 Lacs compared to RS.3,64,099.71 Lacs for the year ended 31st March, 2017, an increase of 20.87% driven by improved sales volumes. Sugar recovery increased by 10.86% during the financial year compared to 10.66% in the previous year. The other segments i.e., distillery and cogeneration delivered steady performances. The Company earned a total comprehensive income of RS.21,656.86 Lacs during the year ended 31st March 2018 compared to RS.58,865.70 Lacs in the previous year.

Segment-wise performance and outlook

Sugar

Sugarcane crushed during the year stood at 927.83 lac quintals compared to 794.65 lac quintals in the previous year, an increase of 16.76% over the previous year. This was on account of the early start to sugarcane crushing operations during the year. This enabled the Company to crush a higher amount of sugarcane. Recovery levels increased to 10.86% compared to 10.66% achieved during the previous year, owing to a higher proportion of early variety sugarcane planted by the farmers. The Company worked closely with farmers to increase the sowing of early cane varieties which will enable the Company to improve recovery rates, going forward. The Company is providing farmers the necessary agro-inputs so as to increase farm yields and improve clean cane quality. Decisive steps were also taken to educate cane growers on modern agricultural practices.

During the year, the Company sold 102.95 lac quintals of sugar at an average realisation of RS.35.56 per kilogram compared to 79.74 lac quintals at an average realisation of RS.35.90 per kilogram in the previous year.

Sugar inventory as on 31st March 2018 stood at 59.98 lac quintals valued at ~RS.25.87 per quintal, leading to an inventory write-down worth RS.31,279.44 Lacs during the year.

Distillery

The Company’s distillery segment performed satisfactorily. The Company produced 810.03 lac bulk litres of alcohol during the year ended 31st March, 2018 compared to 721.58 lac bulk litres during the previous year, an increase of 12.26% over the previous year. Following the achievement of zero liquid discharge status at all the three distilleries, the Company was able to run its plants for a higher number of days, enabling it to produce more alcohol. Going forward, the production of ethanol is expected to increase owing to a higher availability of molasses derived from a higher amount of sugarcane being crushed. Sales during the year stood at 806.59 lac bulk litres compared to 691.80 lac bulk litres during the previous year. Ethanol sales constituted 97.76% of the total segmental volume during the year. The average realisation per bulk litre stood at RS.39.46 compared to RS.42.55 per bulk litre in the previous year. The Central Government fixed the supply price of ethanol at RS.40.85 per litre (including transportation costs) for the period between December 2017 and November 2018 as against the earlier price of RS.39 per litre, which was applicable from December 2016 to November 2017. With a keen emphasis by the Central Government on the ethanol blending programme, the Company foresees increase in the offtake from oil marketing companies during 2018-19.

Cogeneration

The performance of the cogeneration segment remained stable during the year. Total power generated during the year stood at 8,740.91 lac units compared to 7,537.41 lac units in the previous year, an increase of 15.97%. Power exported to the Uttar Pradesh Power Corporation Limited stood at 5,679.85 lac units as against 5,104.93 lac units in the previous year, an increase of 11.26%. The average realisation per unit remained stable at RS.4.81. The Company also sold 3.93 lac renewable energy certificates during the year resulting in gross proceeds worth RS.3,927.04 Lacs. Going forward, the power generation and export volumes are expected to improve due to greater availability of bagasse. As of 31st March 2018, the Company did not hold any renewable energy certificates.

A detailed analysis of the Company’s operations, expectations and business environment has been provided in the Management Discussion and Analysis section, which forms a part of this report.

Governmental policies related to the Sugar Industry

The salient features of the major policies relating to the sugar industry are mentioned hereunder:

- The Central Government increased the FRP for sugarcane for the 2017-18 sugar season to RS.255 per quintal (from RS.230 per quintal during last year) (linked to a basic recovery of 9.5% and subject to a premium of RS.2.68 per quintal for every 0.1% increase in recovery above that level).

- The Government of Uttar Pradesh increased the SAP of sugarcane for the 2017-18 sugar season from RS.305 to RS.315 per quintal, for the normal variety of sugarcane. Additionally, a society cane commission of RS.5.10 per quintal of sugarcane was raised from RS.4.50 per quintal of sugarcane during last year.

- The Central Government fixed the supply price of ethanol at RS.40.85 per litre for the period between December 2017 and November 2018.

Subsidiary and Associate Companies

Following the completion of the Open Offer formalities under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as amended) by Ganesh Explosives Private Limited (Acquirer), Indo Gulf Industries Limited (IGIL) ceased to be the subsidiary of the Company w.e.f. 19th May, 2017. Accordingly, the entire shareholding of the Company in IGIL along with the control and management of IGIL was transferred to the Acquirer. The Company has also been reclassified as “public shareholders” in terms of Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the “Listing Regulations”), by the concerned stock exchange where the equity shares of IGIL are listed.

During the year under review, Auxilo Finserve Private Limited (AFPL) became an associate company, consequent to the allotment of 3,75,00,000 equity shares having face value of RS.10 each (50% equity shareholding) to the Company by AFPL.

Except the above, no body corporate has become or ceased to be a subsidiary, joint venture or associate company during the year.

Consolidated Financial Statements

In compliance with the provisions of the Companies Act, 2013 (as amended) (the “Act”) and implementation requirements of the Indian Accounting Standards Rules on accounting and disclosure requirements, as applicable and as prescribed under Regulation 34 of the Listing Regulations, the Audited Consolidated Financial Statements form part of this Annual Report.

Pursuant to Section 129(3) of the Act, a statement in Form AOC-1 containing the salient features of the financial statements of the Company’s Subsidiary and Associate companies is also provided in this Annual Report.

The audited financial statements of the Company including the consolidated financial statements and related information of the Company are available on the website of the Company at www. chini.com. Since, the Company doesn’t have a subsidiary, the compliance under Section 136 about separate financial statements do not apply to it.

Share Capital

During the year under review, the Company issued and allotted 17,500 equity shares of RS.1 each at a price of RS.45 per share (including premium of RS.44 per share) upon the exercise of 17,500 options under the Employee Stock Option Scheme. Apart from this, the Company has received applications (along with the requisite share application money including premium) in exercise of 10,000 options (in aggregate) under the Employee Stock Option Scheme. The allotment of equity shares against these applications is pending as on 31st March, 2018.

Further, during the year 2017-18, the Company issued and allotted 360 equity shares of RS.1 each at a price of RS.26 per share (including premium of RS.25 per share) on rights basis. The allotment of these shares was made out of the Rights Issue - 2004 hitherto were kept in abeyance pending resolution of certain disputes.

Consequently, the paid-up share capital of the Company increased to RS.23,50,28,327 consisting of 23,50,28,327 equity shares of RS.1 each.

Buyback of Shares

During the year under review, the Board of Directors of the Company approved buy-back of the equity shares of the Company, through the “Tender Offer” route using the Stock Exchange Mechanism, for an aggregate amount of upto RS.9,900 Lacs (being 6.78% of the total paid-up equity share capital and free reserves of the Company as on 31st March, 2017), at a price of RS.150/- per Equity Share on a proportionate basis in accordance with the provisions contained in the Act, rules made thereunder, the SEBI (Buy Back of Securities) Regulations, 1998 and other applicable circulars, clarifications and notifications. Formalities pertaining to extinguishment of equity shares bought back were completed on 4th April, 2018.

Employee Stock Option Scheme

The applicable disclosures as required under the SEBI Guidelines as amended and the details of stock options as at 31st March, 2018 under the Employee Stock Option Scheme, 2005 are set out in the attached Annexure - II and forming part of this Report.

Credit Rating

CRISIL and ICRA Limited, credit rating agencies, both have individually assigned the credit rating of AA with respect to longterm loans and A1 with respect to short-term loans.

Directors

The members of the Company at the 41st Annual General Meeting held on 30th August, 2017, appointed Shri Naresh Dayal as a NonExecutive, Non-Independent Director, liable to retire by rotation with effect from the date of the said AGM of the Company.

At the said AGM, the members of the Company also re-appointed Shri Vivek Saraogi as the Managing Director of the Company for a further period of 5 years with effect from 1st April, 2017 and Dr. A. K. Saxena as a Whole-time Director of the Company for a further period of 5 years with effect from 1st August, 2017.

With deep regret, the Board reports the sad demise of the Chairman and Independent Director, Late (Shri) Naresh Chandra, on 9th July, 2017 and would like to place on record its highest gratitude and appreciation for the guidance given by Late (Shri) Naresh Chandra to the Board during his tenure as a director.

Director retiring by rotation

Shri Naresh Dayal retires from the Board by rotation and being eligible, offers himself for re-appointment.

Information regarding the directors seeking reappointment

Resume and other information regarding Shri Naresh Dayal seeking re-appointment as required by Regulation 36 of the Listing Regulations has been given in the Notice convening the ensuing AGM. The Board of Directors recommends the above reappointment.

None of the Directors of the Company are disqualified as per the applicable provisions of the Act.

Other Information

Appointment of directors is made in accordance with the Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity as recommended by the Nomination & Remuneration Committee and approved by the Board of Directors.

Other details pertaining to the Directors, their appointment / cessation during the year under review and their remuneration are given in the Extract of Annual Return annexed hereto and forming part of this Report.

The Executive Directors (including Managing Director and Wholetime Director) of the Company did not receive any remuneration or commission from the Subsidiary Company during the year 2017-18.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed both under the Act and Regulation 16 of the Listing Regulations.

Separate Meeting of Independent Directors

Details of the separate meeting of Independent Directors held in terms of Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in the Corporate Governance Report.

Directors’ Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Act and Regulation 18 of the Listing Regulations in the preparation of the annual accounts for the year ended 31st March, 2018 and state that :

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. The Directors have 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 at the end of the financial year and of the profit of the Company for that period;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. There is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Particulars of Employees

The particulars of employees, as required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), are given in a separate annexure attached hereto as Annexure - III and forms part of this Report. During the year under review, no complaint / case was filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act are given in Annexure - IV attached hereto and forming part of this Report.

Deposits

The Company has not accepted any deposit from the public and consequently, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company are Shri Vivek Saraogi, Managing Director, Shri Pramod Patwari, Chief Financial Officer and Shri Nitin Bagaria, Company Secretary. During the year, there has been no change in the Key Managerial Personnel of the Company.

Details pertaining to their remuneration have been provided in the Extract of Annual Return annexed hereto and forming part of this Report.

Board Meetings

The Board met 6 (six) times during the financial year under review, the details of which are given in the Corporate Governance Report attached to this Report.

Committees of the Board

Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted various committees such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Executive Committee and Share Transfer Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report.

Compliance of Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Audit Committee

All recommendations made by the Audit Committee during the year were accepted by the Board.

Whistleblower Policy

The Company has in place a Whistleblower Policy to deal with unethical behavior, victimisation, fraud and other grievances or concerns, if any. The aforementioned whistleblower policy is available on the Company’s website at the following web-link: http://chini.com/wp-content/uploads/2018/03/Vigil_Mechanism_ Policy.pdf

Policy on Selection and Remuneration of Directors

The Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees is annexed as Annexure - V.

Board Evaluation

Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations, the Board has carried out the evaluation of its own performance and that of its Committees as well as evaluation of performance of the individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached to this Report.

Corporate Social Responsibility

During the year, the Company has signed a tripartite Memorandum of Understanding (MoU) with the National Skill Development Fund (NSDF) and National Skill Development Corporation (NSDC) for skilling of 1000 women over a period of 24 months to empower women from various rural and urban areas of Uttar Pradesh. This programme will offer economic security and stability for women by facilitating employment related training.

The CSR policy approved by the Board is available on the Company’s website at the following web-link: http://chini.com/wp-content/uploads/2018/03/CSR_Policy.pdf The Annual Report on CSR activities is appended as Annexure - VI.

Inter-corporate Loans and Investments

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements forming part of this Annual Report.

Related Party Transactions

There have been no materially-significant related party transactions made by the Company with the Promoters, the Directors or the Key Managerial Personnel which may be in conflict with the interests of the Company at large. The Policy on Related Party Transactions as approved by the Board can be accessed on the Company’s website at following web-link:

http://chini.com/wp-content/uploads/2018/03/Policy_on_materiality_of_Related_Party_Transactions.pdf

The details of the related party transactions are set out in the notes to the financial statements.

Risk Management Policy

The policy on risk assessment and minimisation procedures as laid down by the Board are periodically reviewed by the Audit Committee and the Board. The policy facilitates in identification of risks at appropriate time and ensures necessary steps to be taken to mitigate the risks. Brief details of risks and concerns are given in the Management Discussion and Analysis Report.

Extract of Annual Return

Extract of Annual Return in Form MGT- 9 is annexed to this Report as Annexure - VII. The said Annexure also contains the list of Associates of your Company as on 31st March, 2018.

Material Changes and Commitments

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e. 31st March, 2018 and the date of this Report.

Significant and Material Orders

There are no significant/ material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were reviewed and no reportable material weakness was observed.

Corporate Governance

In terms of the provisions of Regulation 34(3) of the Listing Regulations, the Management Discussion and Analysis, the Corporate Governance Report and the Certificate on the compliance of conditions of Corporate Governance form part of the Annual Report and are given separately as Annexure - VIII.

Business Responsibility Report

Regulation 34(2) of the Listing Regulations, inter alia, provides that the annual reports of the top 500 listed entities based on market capitalisation (calculated as on March 31st of every financial year), shall include a Business Responsibility Report. Since the Company is one of the top 500 listed entities, it has presented its Second Business Responsibility Report for the financial year 2017-18, as Annexure - IX to this Report.

Auditors

Statutory Auditors and their Audit Report

Pursuant to the applicable provisions of the Act, the members of the Company at their AGM held on 30th August, 2017, appointed M/s. Lodha & Co., Chartered Accountants (Firm Registration No. 301051E), as the Statutory Auditors of the Company to hold office from the conclusion of the 41st AGM until the conclusion of the 46th AGM.

The reports given by the Auditors, M/s. Lodha & Co., Chartered Accountants on the standalone and consolidated financial statements of the Company for the year ended 31st March, 2018 form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports.

The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.

Secretarial Auditors and their Audit Report

Pursuant to the provisions of Section 204 of the Act, the Company has appointed M/s. MKB & Associates, Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2017-18. The Secretarial Audit Report for the financial year 2017-18 is attached as Annexure - X and forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Auditors and their Audit Report

The Cost Auditors (M/s. N. Radhakrishnan & Co., Cost Accountants) appointed by the Board have submitted the Cost Audit Report within the time limit prescribed under the Act and Rules made thereunder.

During the year under review, pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the Board appointed M/s. N. Radhakrishnan & Co., Cost Accountants, to conduct cost audit of the Company relating to sugar (including industrial alcohol) and electricity for the financial year ended 31st March, 2018.

On the date of this Report, your directors have, on the recommendation of the Audit Committee, appointed M/s. N. Radhakrishnan & Co., Cost Accountants, as the Cost Auditors of the Company for the financial year 2018-19. As required under the Act, a resolution seeking ratification of the remuneration payable to the Cost Auditors form part of the Notice convening the ensuing AGM.

Annexures forming part of this Report

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report :

Annexure

Particulars

I

Dividend Distribution Policy

II

Details of Employee Stock Option Scheme

III

Particulars of Employees

IV

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

V

Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity

VI

Annual Report on CSR activities

VII

Extract of the Annual Return as per Form MGT-9

VIII

Corporate Governance Report and Management Discussion & Analysis

IX

Business Responsibility Report

X

Secretarial Audit Report

Appreciation

Your Board of Directors takes this opportunity to thank all the stakeholders - the Central Government, the Government of Uttar Pradesh, shareholders, customers, dealers, State Bank of India, HDFC Bank, ICICI Bank, Punjab National Bank, other banks and financial institutions and all other business associates for their excellent support. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company’s employees.

For and on behalf of the Board of Directors

sd/- sd/-

Dr. Arvind Krishna Saxena Vivek Saraogi

Place: Kolkata Whole-time Director Managing Director

Date: 19th May, 2018 DIN - 00846939 DIN - 00221419


Mar 31, 2017

Dear Shareholders,

The Directors have the pleasure of presenting their report as a part of the 41st Annual Report, along with the Audited Accounts of the Company for the year ended 31st March, 2017.

Financial Results

The financial results of the Company are summarised below: (Rs. In Lacs)

Particulars

Standalone

Consolidated

2016-17

2015-16

2016-17

2015-16

Revenue from operations

3,64,099.71

2,87,406.77

3,64,099.71

2,87,406.77

Profit before finance costs, tax, depreciation and amortisation, exceptional items and other comprehensive income

89,451.32

45,744.95

89,409.73

45,742.25

Less: Finance costs

5,542.80

6,654.53

5,542.80

6,654.53

Less: Depreciation and amortisation expense

10,493.71

11,010.52

10,502.84

11,019.71

Profit before tax

73,414.81

28,079.90

73,364.09

28,068.01

Add: Share of profit of associate

-

-

127.43

-

Less: Exceptional items

-

17,310.41

-

17,310.41

Less: Tax expense

14,186.16

743.28

14,215.56

743.28

Profit for the year

59,228.65

10,026.21

59,275.96

10,014.32

Other comprehensive income (net of tax)

(362.95)

(37.69)

(362.92)

(37.69)

Total comprehensive income for the year

58,865.70

9,988.52

58,913.04

9,976.63

Dividend and its Distribution Policy

The Board of Directors of the Company declared an interim dividend of 350% (i.e. RS.3.50 per share on Equity Shares of the face value of RS.1/- each) for the financial year ended 31st March, 2017. Total outgo on the interim dividend was RS.10,320.17 Lacs (including dividend distribution tax of RS.1,745.58 Lacs). The Board has not proposed any final dividend for the financial year ended 31st March, 2017 and accordingly, the interim dividend paid during the year shall be treated as final dividend.

Since the Company is one of the top 500 listed entities based on market capitalisation (calculated as on 31st March of every financial year), pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended by the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, the Dividend Distribution Policy, as adopted by the Board at its meeting held on 11th February, 2017, has been annexed to this Report as Annexure - I and the same is also available on the website of the Company at the following web-link: http://www.chini.com/policies/Dividend_Distribution_ Policy_2017.pdf

Operations

The operational data of the Company for the last two sugar seasons and financial years are as under:

Particulars

Sugar season

Financial year

2016-17

2015-16

2016-17

2015-16

Sugarcane crushed (in lac quintals)

838.54

703.87

794.65

742.56

Sugar produced (in lac quintals)

90.01

78.35

84.70

82.15

Recovery (%)

10.74

11.13

10.66

11.06


Industry scenario and outlook

The sugar season 2016-17 started with a carry-forward stock of 77.5 lac tonnes of sugar and perception of lower production due to a shortage of cane output specifically in the Deccan Plateau region (including Tamil Nadu). Production estimates were revised multiple times at the industrial as well as the ministerial levels and finally the country ended with a little higher than 200 lac tonnes of sugar. Production levels in Maharashtra ended at around 42 lac tonnes which was just half of its 2015 production whereas, Karnataka ended at around 20.5 lac tonnes. However, it was because of an increase in production in Uttar Pradesh, the pan-India figures managed to cross the 200 lac tonnes mark. State-wise production figures show that Uttar Pradesh stood as the largest sugar producing state in the country producing almost 87.5 lac tonnes sugar. The reason behind this growth was the adoption of new varieties of cane resulting in higher yields and recovery rates as well as prompt cane price payments in last year which incentivised farmers across the state for sowing more cane. In the first half of the current sugar season (2016-17), sugar dispatched by mills into the domestic market was almost a million tonne lower than last year. This decline in demand was attributed to a lower offtake on account of demonetisation. Demand during the second half is expected to pick up by atleast 50% of what it lost during the first half, thus resulting in a total demand of around 243 lac tonnes. In the wake of the lower production levels in Maharashtra and South India, the Central Government assessed the overall demand and supply position and in order to ensure a comfortable sugar stock at the end of the sugar season allowed duty free import of 5 lac tonnes of raw sugar. This decision of the Central Government was pragmatic in the sense that it addressed the regional imbalances of sugar inventory prevalent in the different parts of the country. Hence, after considering the aforementioned imported stock, India may end the sugar season with a closing stock of 40 to 45 lac tonnes. Ex-mill sugar prices in Uttar Pradesh remained within the range of RS.3,450 and RS.3,750 per quintal. As far as the next season is concerned, higher acreage and optimal monsoons indicates production levels to be at par with consumption levels, thus, paving the way for a well-balanced market in the days to come marked by stabilised sugar prices with a slightly upward bias.

Global sugar production levels are expected to report a surplus status following a brief period of deficit with Brazil, Thailand and even China either maintaining current production levels or generating a slight increase. A major increase in production is expected from the Eurozone. 2017-18 MY will mark the first year during which the EU countries will come out of the five decade-long production quota and export limit regime. Post the announcement of the abolition of the sugar quota (slated to come into effect on 1st October, 2017), beet plantation has increased substantially. Sugar production is expected to reach around 19 million tonnes in 2017-18 and the EU is expected to emerge as a net 2 million tonnes exporter from being a net importer.

BCML’s performance during 2016-17

Revenue from operations of the Company during the year ended 31st March, 2017 improved to RS.3,64,099.71 Lacs as compared to RS.2,87,406.77 Lacs for the year ended 31st March, 2016 - an increase of 26.68% driven by improved sugar realisations. Sugar recovery lowered slightly to 10.66% during the financial year ended 31st March, 2017 compared to 11.06% in the previous year. The other segments i.e. distillery and cogeneration delivered steady performances. The Company earned a total comprehensive income of RS.58,865.70 Lacs during the year ended 31st March, 2017 compared to RS.9,988.52 Lacs in the previous year.

Segment-wise performance and outlook

Sugar

During the year, sugarcane crushing activities started earlier than usual, which enabled the Company to crush a higher quantity of cane compared to last year. Sugarcane crushed during the year stood at 794.65 lac quintals as compared to 742.56 lac quintals in the previous year. Recovery lowered to 10.66% as compared to 11.06% achieved during the previous year owing to weather conditions which were not completely conducive. The Company has been working closely with farmers to increase the sowing of early variety of sugarcane which would enable the Company to crush more cane and improve recovery rates, going forward. The Company is providing farmers with necessary agri-inputs for increasing their farm yields and improving clean cane quality. Steps have also been taken to educate cane growers on modern agricultural practices.

During the year, the Company sold 79.74 lac quintals of sugar at an average realisation of RS.35.90 per kilogram as against 80.70 lac quintals at an average realisation of RS.27.06 per kilogram in the previous year.

Distillery

The Company’s distillery segment performed satisfactorily. The Company produced 721.58 lac bulk litres of alcohol during the year ended 31st March, 2017 as against 705.55 lac bulk litres during the previous year. Sales during the year was 691.80 lac bulk litres as compared to 647.49 lac bulk litres during the previous year. Ethanol sales constituted 99.5% of the revenues generated by the segment during the year as compared to 86.9% during the previous year. During the year under review, the prices of ethanol remained remunerative. The average realisation per bulk litre stood at RS.42.55 as against RS.40.41 per bulk litre in the previous year. The Company successfully commissioned incinerator boilers at all of its three distilleries in order to achieve a zero liquid discharge status. This initiative coupled with higher availability of molasses due to enhanced crushing levels as mentioned above would enable the Company to better utilise its distillery capacities. With the thrust laid by the Central Government on the Ethanol Blending Programme, the Company foresees increased demand from oil marketing companies during the current year. The Central Government has fixed the supply price of ethanol at RS.39 per litre for the period between December 2016 and November 2017.

Cogeneration

The performance of the cogeneration segment remained stable during the year. Total power generated during the year stood at 7,537.41 lac units compared to 7,469.14 lac units in the previous year. Power exported to the Uttar Pradesh Power Corporation Limited stood at 5,104.93 lac units as against 5,307.41 lac units in the previous year. The average realisation per unit stood at RS.4.81 as against RS.4.77 per unit in the previous year. The Company also sold 1.98 lac renewable energy certificates during the year resulting in gross proceeds worth RS.2,977.17 Lacs. Going forward, the power generation capacities are expected to improve their utilisation levels due to a greater availability of bagasse resulting from higher amounts of cane crushed.

Organic Manure

Following the discontinuation of the organic manure division, the spent wash generated during the distillation process is being used as fuel for incinerator boilers.

A detailed analysis of the Company’s operations, future expectations and business environment has been given in the Management Discussion & Analysis Report which forms a part of this Report.

Governmental policies related to the sugar industry

The salient features of the major policies relating to the sugar industry are as under:

- The Central Government announced the FRP (Fair & Remunerative Price) for sugarcane for the sugar season 2016-17 to be RS.230 per quintal and RS.255 per quintal for the sugar season 2017-18 (linked to a basic recovery of 9.50% and subject to a premium of RS.2.68 per quintal for every 0.1% increase in recovery above that level).

- The Government of Uttar Pradesh increased the State Advised Price (SAP) of sugarcane for the sugar season 2016-17 from RS.280 per quintal to RS.305 per quintal, for the normal variety of sugarcane. In addition, society cane commission and sugarcane purchase tax of RS.4.50 and RS.2.00 per quintal of sugarcane, respectively, were levied.

- The Central Government allowed imports upto 5.00 lac tonnes of raw sugar at zero duty to address the regional imbalances of sugar inventory in the country.

The Central Government fixed the supply price of ethanol at RS.39 per litre for the period between December 2016 and November 2017.

Impact of GST

The GST Council has met substantial demands of the industry and hence, it is unlikely that GST shall pose any hindrance to the industry. A comparative table of the proposed GST rates vis-a-vis the existing rates are placed hereunder :

Sl. No.

Commodity

Rates under Central Excise

GST Rates

Remarks

1.

Sugar cane

-

Nil

State Government-levied purchase tax will be subsumed

2.

Sugar

Basic @ RS.71 per quintal, Sugar Cess @ RS.124 per quintal [effective at an ad valorem rate of approximately 5.27%]

5%

State Government-levied entry tax will be subsumed

3.

Molasses

@ RS.75 per quintal [effective at an ad valorem rate of approximately 17%]

28%

No impact on the Company as it enjoys captive usage of molasses

4.

Ethyl alcohol

@ 12.50 %/BL

18%

State Government-levied purchase tax will be subsumed

5.

Bagasse and Press mud

Nil

5%

No impact on the Company as it enjoys captive usage of bagasse

6.

Electricity

The present position has been maintained and the electricity has been kept out of the purview of GST


Subsidiary and Associate Companies

The Company’s subsidiary Indo Gulf Industries Limited (IGIL) reported a net loss of RS.50.72 Lacs for the year ended 31st March, 2017 as compared to a loss of RS.11.89 Lacs for the year ended 31st March, 2016. During the year under review, the Company entered into a Share Purchase Agreement (SPA), inter alia, with Ganesh Explosives Private Limited (Acquirer) for sale and transfer of the entire shareholding (53.96%) in IGIL held by the Company, subject to the compliance of Open Offer formalities under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as amended) by the Acquirer and conditions precedent in terms of the SPA. As on the date of this report, the Open Offer formalities stand completed and the entire shareholding of the Company in IGIL along with the control and management of the said company has been transferred to the Acquirer.

During the year under review, Visual Percept Solar Projects Private Limited (VPSPPL) became an associate company, consequent to the acquisition of 45% equity stake of VPSPPL by the Company, pursuant to the Call Option Agreement dated 30th March, 2015. Share of profit of the said associate company for the year ended 31st March, 2017 is RS.127.43 Lacs.

Except the above, no body corporate has become or ceased to be a subsidiary, joint venture or associate company during the year.

Consolidated Financial Statements

In compliance with the provisions of the Companies Act, 2013 (as amended) (the “Act”) and implementation requirements of the Indian Accounting Standards Rules on accounting and disclosure requirements, as applicable and as prescribed under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the “Listing Regulations”), the Audited Consolidated Financial Statements form part of this Annual Report.

Pursuant to Section 129(3) of the Act, a statement in Form AOC- 1 containing the salient features of the financial statements of the Company’s Subsidiary and Associate companies is also provided in this Annual Report.

The audited financial statements of the Company including the consolidated financial statements and related information of the Company and the audited accounts of the subsidiary are available on the website of the Company at www.chini.com. The annual accounts of the Subsidiary Company and the related detailed information shall be made available to the members of the Company seeking such information at any point of time. The annual accounts of the Subsidiary Company would be avaliable for inspection by the members at the Company’s Registered Office during business hours.

Share Capital

During the year under review, the Company issued and allotted 60,700 equity shares of RS.1 each at a price of RS.45 per share (including premium of RS.44 per share) upon the exercise of 60,700 options under the Employee Stock Option Scheme. Consequently, the paid-up share capital of the Company increased to RS.24,50,10,467 consisting of 24,50,10,467 equity shares of RS.1 each.

Buyback of Shares

Further, during the year under review, the Company sought approval of the shareholders to buy-back its equity shares, through the “Tender Offer” route using the Stock Exchange Mechanism, for an aggregate amount of upto RS.17,500 Lacs (being 14.72% of the total paid-up equity share capital and free reserves of the Company as on 31st March, 2016), at a price of RS.175/- per Equity Share on a proportionate basis in accordance with the provisions contained in the Act, rules made thereunder, the SEBI (Buy Back of Securities) Regulations, 1998 and other applicable circulars, clarifications and notifications. Details of the Postal Ballot process conducted to seek the aforesaid approval of the shareholders are given in the Corporate Governance Report.

Post the Buyback of 1,00,00,000 equity shares, the equity share capital of the Company stood at RS.23,50,10,467 consisting of 23,50,10,467 equity shares of RS.1 each as on 31st March, 2017.

Employee Stock Option Scheme

The applicable disclosures as required under the SEBI Guidelines as amended and the details of stock options as at 31st March, 2017 under the Employee Stock Option Scheme, 2005 are set out in the attached Annexure - II and forming part of this Report.

Credit Rating

ICRA Limited - a Credit Rating Agency, vide its letter dated 8th November, 2016, revised the Credit Rating of the Company from [ICRA] A to [ICRA] AA- with respect to long-term loans. Further, ICRA Limited, vide its letter dated 12th April, 2017, revised upwards the long-term rating of the Company from [ICRA] AA- to [ICRA] AA. The short-term rating was retained at [ICRA] A1 .CRISIL - a credit rating agency, vide its letter dated 26th May, 2017, has assigned the credit rating of the Company to CRISIL AA with respect to long-term loans. The short-term rating has been assigned at CRISIL A1 .

Directors

The members of the Company at the 40th Annual General Meeting, held on 12th August, 2016, appointed Shri Sakti Prasad Ghosh and Shri Sumit Mazumder as Independent Directors for a term of 5 (five) consecutive years ending on 30th September, 2020 and 30th April, 2021 respectively in terms of Section 149 and other applicable provisions of the Act.

The Board of Directors on the recommendation of the Nomination & Remuneration Committee appointed Shri Naresh Dayal as an Additional Director (Non-Executive, Non-Independent Director), with effect from 15th November, 2016.

By virtue of the provisions of the Articles of Association of the Company and Section 161 of the Act, Shri Naresh Dayal will vacate office at the ensuing Annual General Meeting (AGM). The Board of Directors at its meeting held on 27th May, 2017, has recommended for the approval of the members the appointment of Shri Naresh Dayal as a Non-Executive, Non-Independent Director of the Company, liable to retire by rotation, with effect from the date of the ensuing AGM of the Company.

Notice under Section 160 of the Act, has been received from a member of the Company proposing candidature of Shri Naresh Dayal.

During the year under review, Smt. Meenakshi Saraogi informed the Company about her decision to resign as a Director of the Company, owing to her indifferent health. Accordingly, with effect from the close of business hours on 15th November, 2016, she has ceased to be a Director of the Company. The Board wishes to place its sincere appreciation of the contributions made by Smt. Meenakshi Saraogi to the tremendous growth of the Company.

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company at their meeting held on 11th February, 2017 has re-appointed Shri Vivek Saraogi as the Managing Director of the Company for a further period of 5 years with effect from 1st April, 2017, subject to approval of the members at the ensuing AGM.

The Board of Directors of the Company at their meeting held on 27th May, 2017 has re-appointed Dr. A. K. Saxena as a Whole-time Director of the Company for a further period of 5 years with effect from 1st August, 2017 based on the recommendation of the Nomination & Remuneration Committee, subject to approval of the members at the ensuing AGM.

Director retiring by rotation

Dr. A. K. Saxena retires from the Board by rotation and being eligible, offers himself for re-appointment.

Information regarding the directors seeking appointment/ re-appointment

Resume and other information regarding the directors seeking appointment / re-appointment as required by Regulation 36 of the Listing Regulations have been given in the Notice convening the ensuing AGM and in the Statement pursuant to Section 102 of the Act. The Board of Directors recommends the above appointment(s) / re-appointment(s).

None of the Directors of the Company are disqualified as per the applicable provisions of the Act.

Other Information

Appointment of directors is made in accordance with the Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity as recommended by the Nomination & Remuneration Committee and approved by the Board of Directors.

Other details pertaining to the Directors, their appointment / cessation during the year under review and their remuneration are given in the Extract of Annual Return annexed hereto and forming part of this Report.

The Executive Directors (including Managing Director and Whole time Director) of the Company do not receive any remuneration or commission from the Subsidiary Company.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed both under the Act and Regulation 16 of the Listing Regulations.

Separate Meeting of Independent Directors

Details of the separate meeting of Independent Directors held in terms of Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in the Corporate Governance Report.

Directors’ Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Act and Regulation 18 of the Listing Regulations in the preparation of the annual accounts for the year ended 31st March, 2017 and state that :

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. The Directors have 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 at the end of the financial year and of the profit of the Company for that period;

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors have prepared the annual accounts on a going concern basis;

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. There is a proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Particulars of Employees

The particulars of employees, as required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), are given in a separate annexure attached hereto as Annexure - III and forms part of this Report. During the year under review, no complaint / case was filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act are given in Annexure - IV attached hereto and forming part of this Report.

Deposits

The Company has not accepted any deposit from the public and consequently, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company are Shri Vivek Saraogi, Managing Director, Shri Pramod Patwari, Chief Financial Officer and Shri Nitin Bagaria, Company Secretary. During the year, there has been no change in the Key Managerial Personnel of the Company.

Details pertaining to their remuneration have been provided in the Extract of Annual Return annexed hereto and forming part of this Report.

Board Meetings

The Board met 4 (four) times during the financial year under review, the details of which are given in the Corporate Governance Report attached to this Report.

Committees of the Board

Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted various committees such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Executive Committee and Share Transfer Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report.

Audit Committee

All recommendations made by the Audit Committee during the year were accepted by the Board.

Whistleblower Policy

The Company has in place a Whistleblower Policy to deal with unethical behavior, victimisation, fraud and other grievances or concerns, if any. The aforementioned whistleblower policy is available on the Company’s website at the following web-link:http://www.chini.com/policies/Vigil_Mechanism_Policy.pdf

Policy on Selection and Remuneration of Directors

Based on the recommendation of the Nomination & Remuneration Committee, the Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees was revised and adopted by the Board of Directors at their meeting held on 11th August, 2016. The said policy was made applicable w.e.f. 1st September, 2016 and is annexed as Annexure - V.

Board Evaluation

Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations, the Board has carried out the evaluation of its own performance and that of its Committees as well as evaluation of performance of the individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached to this Report.

Corporate Social Responsibility

The CSR policy approved by the Board is available on the Company’s website at the following web-link: http://www.chini.com/policies/CSR_Policy.pdf

The Annual Report on CSR activities is appended as Annexure - VI.

Inter-corporate Loans and Investments

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements forming part of this Annual Report.

Related Party Transactions

There have been no materially-significant related party transactions made by the Company with the Promoters, the Directors or the Key Managerial Personnel which may be in conflict with the interests of the Company at large. The Policy on Related Party Transactions as approved by the Board can be accessed on the Company’s website at following web-link:http://www.chini.com/policies/Policy_on_materiality_of_Related_Party_Transactions.pdf

The details of related party transactions are set out in the notes to the financial statements.

Risk Management Policy

The policy on risk assessment and minimisation procedures as laid down by the Board are periodically reviewed by the Audit Committee and the Board. The policy facilitates in identification of risks at appropriate time and ensures necessary steps to be taken to mitigate the risks. Brief details of risks and concerns are given in the Management Discussion and Analysis Report.

Extract of Annual Return

Extract of Annual Return in Form MGT- 9 is annexed to this Report as Annexure - VII.

Material Changes and Commitments

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e. 31st March, 2017 and the date of this Report.

Significant and Material Orders

There are no significant/ material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were reviewed and no reportable material weakness was observed.

Corporate Governance

In terms of the provisions of Regulation 34(3) of the Listing Regulations, the Management Discussion and Analysis, the Corporate Governance Report and the Certificate on the compliance of conditions of Corporate Governance form part of the Annual Report and are given separately as Annexure - VIII.

Business Responsibility Report

Regulation 34(2) of the Listing Regulations, inter alia, provides that the annual reports of the top 500 listed entities based on market capitalisation (calculated as on March 31st of every financial year), shall include a Business Responsibility Report. Since the Company is one of the top 500 listed entities, it has presented its first Business Responsibility Report for the financial year 2016-17, as Annexure - IX to this Report.

Auditors Statutory Auditors and their Audit Report

M/s. G. P. Agrawal & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company at the 40th AGM held on 12th August, 2016 to hold office from the conclusion of that AGM till the conclusion of the 41st AGM to be held in the year 2017. M/s. G. P. Agrawal & Co., Chartered Accountants would vacate office as the Auditors of the Company at the conclusion of the ensuing AGM pursuant to the provisions of Section 139(2)(b) of the Act to comply with the provision of compulsory rotation of auditors. Pursuant to the applicable provisions of the Act, on the recommendation of the Audit Committee of the Board, it is proposed to appoint M/s. Lodha & Co., Chartered Accountants, (Firm Registration No. 301051E) as the Statutory Auditors of the Company to hold office from the conclusion of the 41st AGM until the conclusion of the 46th AGM. The Company has received a letter from M/s. Lodha & Co. confirming that they are eligible for appointment as Statutory Auditors of the Company under Section 139 of the Act and meet the criteria for appointment specified in Section 141 of the Act. Necessary resolution for the appointment of M/s. Lodha & Co., Chartered Accountants as the Statutory Auditors is included in the Notice of the ensuing AGM.

The reports given by the outgoing Auditors, M/s. G. P. Agrawal & Co., Chartered Accountants on the standalone and consolidated financial statements of the Company for the year ended 31st March, 2017 form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports.

The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.

Secretarial Auditors and their Audit Report

Pursuant to the provisions of Section 204 of the Act, the Company has appointed M/s. MKB & Associates, Company Secretaries, to undertake the secretarial audit of the Company for the financial year 2016-17. The Secretarial Audit Report for the financial year 2016-17 is attached as Annexure - X and forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Auditors and their Audit Report

The Cost Auditors (M/s. N. Radhakrishnan & Co., Cost Accountants) appointed by the Board have submitted the Cost Audit Report within the time limit prescribed under the Act and Rules made thereunder.

During the year under review, pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the Board appointed M/s. N. Radhakrishnan & Co., Cost Accountants, to conduct cost audit of the Company relating to sugar (including industrial alcohol) and electricity for the financial year ended 31st March, 2017.

On the date of this Report, your directors have, on the recommendation of the Audit Committee, appointed M/s. N. Radhakrishnan & Co., Cost Accountants, as the Cost Auditors of the Company for the financial year 2017-18. As required under the Act, a resolution seeking ratification of the remuneration payable to the Cost Auditors form part of the Notice convening the ensuing AGM.

Annexures forming part of this Report

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report :

Annexure Particulars

I Dividend Distribution Policy

II Details of Employee Stock Option Scheme

III Particulars of Employees

IV Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

V Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity

VI Annual Report on CSR activities

VII Extract of the Annual Return as per Form MGT-9

VIII Corporate Governance Report and Management Discussion & Analysis

IX Business Responsibility Report

X Secretarial Audit Report

Appreciation

Your Board of Directors takes this opportunity to thank all the stakeholders - the Central Government, the Government of Uttar Pradesh, shareholders, customers, dealers, State Bank of India, HDFC Bank, Punjab National Bank, other banks and financial institutions and all other business associates for their excellent support. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company’s employees.

For and on behalf of the Board of Directors

Sd/- Sd/-

Dr. Arvind Krishna Saxena Vivek Saraogi

Place: Kolkata Whole-time Director Managing Director

Date: 27th May, 2017 DIN - 00846939 DIN - 00221419


Mar 31, 2013

Dear shareholders,

THE DIRECTORS HAVE PLEASURE IN PRESENTING THEIR REPORT AS A PART OF THE 37TH ANNUAL REPORT, ALONG WITH THE AUDITED ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31ST MARCH 2013.

Operating and financial review (Rs. in lacs)

Financial Results 2012-13 2011-12

Gross turnover 338403.03 239031.15

Operating profit before finance costs, depreciation 46268.04 26597.21 and tax

Finance cost 14386.70 14741.11

Depreciation and amortisation expense 10825.74 11078.09

Tax expense 4852.72 30065.16 115.52 25934.72

Net profit 16202.88 662.49

Add : Dividend on equity shares (including tax on - 22.89 dividend) for previous period written back

Add : Balance brought forward from the previous 7904.63 7219.25 year

Profit available for appropriation 24107.51 7904.63

Appropriations:

Proposed dividend on equity shares 4886.28 -

Tax on proposed dividend 830.42 -

General Reserve 10000.00 -

Leaving a balance to be carried forward to next 8390.81 7904.63 year''s account

24107.51 7904.63

Dividend

Your Directors are pleased to recommend payment of Dividend for consideration of the shareholders @ Rs. 2.00 per share.

Operations

The operational data of the Company for the last two sugar seasons/ financial years are provided as under:

Parameters Season Season Financial year Financial year 2012-13 2011-12 ended 31.3.13 ended 31.3.12

Sugar cane crushed (in lac qtls) 862.63 860.18 810.52 846.28

Sugar produced (in lac qtls) 82.33 82.17 77.18 80.71

Recovery (%) 9.54 9.55 9.52 9.54

Performance 2012-13

The Company reported a gross turnover of Rs.3384.03 crores for the year ended 31st March, 2013 as against Rs.2390.31 crores in the previous financial year, a growth of 41.57%. The Net Profit also increased to Rs. 162.03 crores from Rs. 6.62 crores (after providing cane dues of Rs.92.35 crores pursuant to the Hon''ble Supreme Court Order) in the previous year.

The average price of free sale sugar realised during the year was Rs. 33.00 per kg. The cost of production for the year 2012-13 stands at Rs.33.16 per kg. The entire closing stock out of the production of 2012-13 has been valued at Rs.31.55 per kg which is the current market price. The above sales during the year comprised of opening stock valued at Rs. 28.67 per kg and sugar produced during 2012-13.

The Cabinet Committee of Economic Affairs in its landmark decision has decided to do away with the release mechanism and obligation on the millers to supply 10% of their sugar produced as ''Levy Sugar'' with effect from season 2012-13 onwards. Had the levy obligation continued, the Company would have valued 10% of the ''Levy Sugar'' i.e., 7.7 lakh quintals at an average price of Rs.19.70 per kg.

During the year under review, your Company decided not to account for the benefits which are to be reimbursed by the Government, available under the "New Sugar Industry

Promotion Policy, 2004" from the current year onwards which shall be accounted for in accordance with the final Order of the High Court. However, benefits in the form of remission has been accounted for.

The net loss in the sugar segment stands at Rs. 2126.00 lacs after providing for interest and the corporate overheads. However net profit was derived after optimum utilisation of byproducts i.e. molasses and bagasse.

Sugar: Your Company is glad to report that the aggregate crushing marginally increased from 860.18 lakh qntls in the sugar season 2011-12 to 862.63 lakh qntls in the sugar season 2012-13 when there was an overall decline in India''s cane output. The average recovery was marginally lower at 9.54% as against 9.55%. Further when viewed against the perspective of the financial year ended 31st March, 2013 crushing was lower at 810.52 lakh qntls compared to 846.28 lakh qntls during the previous financial year 2011-12, due to a delay in starting crushing operations by the sugar units of the Company.

The Uttar Pradesh Government announced a cane price of Rs.280 per quintal for the season 2012-13 compared to Rs. 240 for the season 2011-12. At Rs.280 per quintal and with an average recovery of around 9% in U.P., the cost of production of sugar in U.P. has become the highest in the country. This escalation in cane price announced by the State Government has rendered the U. P. sugar industry cash-starved and uncompetitive. The result was that cane price arrears mounted to an all time record of Rs. 6000 crores.

Power: The power business of the Company performed better during the year under review. The total power generated by our cogeneration plant was higher at 7488.69 lac units, as against 7390.47 lac units in the previous year. Power export to UPPCL was also higher at 5386.27 lac units as against 5267.96 lac units in the previous year; the total value of power exported to the grid was Rs. 21843.61 lacs as against Rs. 21810.68 lacs in the previous year.

Distillery: The distillery performance was satisfactory. The Company produced 317.62 lac BL industrial alcohol, 185.43 lac BL ethanol and 173.61 lac BL ENA as against 280.47 lac BL, 165.31 lac BL and 112.07 lac BL respectively during the previous year. The average realisation (net of excise duty) per BL of industrial alcohol, ethanol and ENA was Rs.28.06 as againstRs. 26.70 during the previous year.

Organic manure: The performance of organic manure division was satisfactory during the year.

Subsidiary companies

Indo Gulf Industries Ltd (IGIL): IGIL reported a net loss of Rs.56.74 lacs for the year ended 31st March, 2013.

Balrampur Overseas Private Limited (BOPL) a wholly owned subsidiary of the Company incorporated in Hong Kong has been deregistered voluntarily during the year by the Company Registry in Hong Kong as there was no activity during last few years.

The statement under Section 212(3) of the Companies Act, 1956 in respect of subsidiary company is separately annexed.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss Account and other documents of the subsidiary company is not attached with the Balance Sheet of the Company. The annual accounts of the subsidiary company and the related detailed information shall be made available to members of the Company and subsidiary company seeking such information at any point of time. The annual accounts of the subsidiary company shall be kept for inspection for members at the Company''s Registered Office and at the Registered Office of the subsidiary company concerned.

Cane and sugar policy

Season 2012-13: The salient features of the sugar policy were as under:

* The ratio of levy and free-sale sugar at 10:90 has been changed to 100% free. The levy and the release requirements were abolished from season 2012-13 onwards.

* The Fair & Remunerative Price (F&RP) was fixed at Rs.170 per quintal linked to a basic recovery of 9.5% subject to a premium ofRs. 1.70 per quintal for every 0.1% increase in recovery above that level. The said F&RP was increased to Rs.210 per quintal for the season 2013-14.

* The U.P. Government increased the state advised price from Rs.240 per quintal to Rs.280 for normal variety.

New project

During the year under review, the Company embarked upon installation of 12.70 MW of cogeneration of power plant at Kumbhi Unit at an estimated cost of Rs. 52 crores. The project is expected to be ready by March 2014. Any capital investment under this project would be entitled to receive interest subvention under the ''New Sugar Policy'' of the U.P. Government. Once completed, this will add value to the bagasse trade.

Consolidated financial statements

In compliance with the Accounting Standards 21 and 23 of the Companies (Accounting Standards) Rules, 2006 and pursuant to the Listing Agreement with the Stock Exchanges, the consolidated financial statements form a part of this Annual Report.

Outlook

The sugar production in the country for the season 2012-13 is expected to be about 248 lakh tonnes as against 264 lakh tonnes during the season 2011-12. However, the sugar production in the country during the coming season 2013-14 is expected to decline on a possible lower availability of cane, especially in the drought-prone regions in Maharashtra and other Southern states. Indian sugar production would enter its third year of surplus during 2012-13. At 248 lac tonnes of production which surpasses consumption at approximately 235 lac tonnes and even in the current year there will be addition to inventory.

In Brazil there is large surplus of sugar production which has resulted in a lowering of international prices, despite announcements of duty cuts on ethanol in Brazil.

With higher level of inventory, large scale cane arrears and domestic prices pegged at lower than the cost of production, there is a dire need to increase import duties from 10% to check unwanted import of sugar.

The Cabinet Committee on Economic Affairs (CCEA) on 4th April, 2013 had decided to partially decontrol the sugar sector.

i) As per the CCEA decision, regulated release mechanism under which the sugar quantity for open market sale is fixed by the government, is abolished with immediate effect.

ii) Besides, mills will be freed from mandatory supply of 10% of their production to the government at the cheaper rate to meet PDS.

However, the Central Government has left to the State Governments the option to choose the cane price formula as recommended by the Rangarajan Committee. Karnataka has already moved ahead and taken steps for cane price linkage with sugar price by passing an ordinance.

For sustainable long-term growth of the sugar industry, all State Governments, including U.P. should take rational steps to adopt cane price linkage with sugar price which is being practiced globally with great success.

Abolition of regulated release mechanism will provide freedom to sell sugar without quantitative restriction and ensure better cash flows for timely payment of cane price to the farmers. With the above measure, the Central Government has completely freed the sales and marketing of sugar. This historic decision has opened up the sugar sector which will improve the financial viability of the industry and enable better liquidation of cane arrears and encourage new investments and consolidation. However, for complete deregulation, an effective cane price policy, beneficial for all the stakeholders i.e. cane growers, sugar producers and consumers is the need of the hour.

The CCEA on 22nd November, 2012 made it mandatory for Oil Marketing Companies (OMC) to blend 5% ethanol with petrol for the country as a whole. The OMC has invited bids for 110 crore litres of ethanol from domestic and global suppliers for blending with petrol during the year 2013-14 and have been allowed to follow a flexible policy of blending upto 10% in some parts of the country. Indian sugar mills offered 55 crore litres. Your Company participated in the tenders for 2.68 crores litres of ethanol at an average price of Rs. 35 per litre.

Merger of Khalilabad Sugar Mills Pvt. Ltd.

Your Company during the year under review proposed the merger of - Khalilabad Sugar Mills Pvt. Ltd. (KSMPL) a sick company under BIFR with itself in all share deal through Draft Modified Rehabilitation Scheme. The proposed exchange ratio is one share of the Company for every 20 shares of KSMPL. Proposed merger scheme is expected to be sanctioned by Hon''ble BIFR during the 2013-14 financial year. KSMPL is engaged in manufacturing of sugar and having is factory at Khalilabad (U.P.) with a crushing capacity of 2500 TCD.

Listing of equity shares

Your Company''s equity shares are listed on the Bombay, Calcutta and National Stock Exchanges. Your Company paid the annual listing fees to each stock exchange.

Corporate governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis, the Corporate Governance report and the Auditors'' Certificate on the compliance of conditions of Corporate Governance, form a part of the Annual Report. However, the voluntary guidelines on Corporate Governance issued by the Ministry of Corporate Affairs, Government of India, will be considered after the enactment of the New Companies Bill, 2012 by the Government.

Credit rating

ICRA has assigned a credit rating of A & A1 respectively for Company''s long-term and short-term debt.

Employee Stock Option Scheme

Pursuant to the Provision of Guidelines 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended, the details of Stock Options as on 31st March, 2013 under the Employee Stock Option Scheme, 2005 are set out in the Annexure to the Directors'' Report.

Directors

Shri R.K. Choudhury and Dr. A.K. Saxena, Directors of your Company, retire from the Board by rotation and are eligible for re-election.

Directors'' responsibility statement

As required under Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that:

i. In preparation of the annual accounts, the applicable accounting standards have been followed.

ii. The Directors have 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 your Company at the end of the financial year, and of the profit of your Company for that year.

iii. The Directors have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, and

iv. The Directors have prepared the annual accounts on a ''going concern'' basis.

Particulars of employees

The particulars of employees, as required under Section 217(2A) of the Companies Act, 1956, are given in a separate annexure attached hereto and form part of this report.

Conservation of energy technology absorption and foreign exchange earnings and outgo

The particulars related to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1) (e) of the Companies Act, 1956, are given in a separate annexure attached hereto and form a part of this report.

Fixed deposits

The Company did not accept any deposit under Section 58A of the Companies Act, 1956 during the year under review.

Auditors & Auditors'' Report

M/s. G.P. Agrawal & Co., Chartered Accountants, Auditors of your Company retire, and being eligible, offers themselves for reappointment. The Notes on Accounts referred to in the Auditors'' Report are self-explanatory and therefore do not call for any further explanations/comments.

Cost auditors

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, M/s. N. Radhakrishnan & Co, Cost Accountants, were appointed to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended 31st March, 2012.

The Cost Audit Report for the financial year ended 31st March, 2012 was filed by the Cost Auditors with respect to the Sugar, Electricity & Industrial Alcohol units of the Company on 23rd January, 2013, which is well within the due date of filing i.e. 28th February, 2013.

Appreciation

Your Board of Directors are thankful to the various stakeholders - shareholders, customers, dealers, financial institutions, the Central Government, the Government of U.P, State Bank of India, HDFC Bank, Punjab National Bank, other Bankers and other business associates for the excellent support received from them during the year under review. Your directors wish to place on record their sincere appreciation to all employees of the Company for their commitment and continued contribution to the Company.

For and on behalf of the Board of Directors

Kishor Shah Vivek Saraogi

Director cum Chief Financial Officer Managing Director

Place: Kolkata

Date: 10th May, 2013.


Mar 31, 2012

The Directors have pleasure in presenting their report as a part of the 36th Annual Report, along with the audited accounts of the Company for the year ended 31st March, 2012.

Operating and financial review [Rs. in Lacs]

Financial Results 2011-12 2009-11 (For 12 months) (For 18 months)

Gross turnover 239031.15 306739.86

Operating profit before finance costs, depreciation and tax 26597.21 54225.55

Finance costs 14741.11 14864.46

Depreciation and amortization expense 11078.09 16810.96

Tax expense 115.52 25934.72 6109.38 37784.80

Net profit 662.49 16440.75

Less: Loss of Maizapur unit on merger - 1248.17

Add : Dividend on equity shares (including tax on dividend) 22.89 - for previous period written back

Add : Balance brought forward from the previous year 7219.25 4238.55

Profit available for appropriation 7904.63 19431.13

Appropriations:

Proposed dividend on equity shares - 1852.05

Tax on proposed dividend - 300.45

Dividend on equity shares (including tax on dividend) - 59.38 for the previous year

General Reserve - 10000.00

Leaving a balance to be carried forward to next year's account 7904.63 7219.25

7904.63 19431.13

Dividend

Your Directors do not recommend the payment of dividend on equity shares in view of the lower profits earned by the Company.

Operations

The operational data of the Company for the financial year 2011-12 and 2009-11 are provided as under:

Cane crushed Sugar produced Financial year Recovery % (in lac qntls) (in lac qntls)

2011-12 (12 months) 846.28 80.71 9.54

2009-11 (18 months) 1231.48 115.47* 9.38

*excluding 8.69 lac quintals processed from raw sugar.

Financial year review

The financial and operating results for the year under review are for a period of 12 months and not strictly comparable with the 18 months results for 2009-11.

Performance 2011-12

The Company reported a turnover of Rs2390.31 crores for the year ended 31st March, 2012 as against Rs3067.40 crores during the previous period. During the year under review, the Company earned a net profit of Rs6.62 crores as against Rs164.41 crores during the previous period despite a hefty provision for impugned sugar cane dues of Rs92.35 crores for season 2007-08 during the year under review pursuant to the Hon'ble Supreme Court order dated 17.01.2012.

Sugar: Sugar crushing and production during season 2011-12 were substantially higher at 860.18 lac quintals and 82.17 lac quintals as against 694.60 lac quintals and 65.30 lac quintals respectively in 2010-11 season. The average recovery was higher at 9.55% (the second highest among all sugar producing companies in Uttar Pradesh) for the 2011-12 season as against 9.40% in 2010-11 season.

The Uttar Pradesh government announced a cane price of Rs240 per quintal for season 2011-12 compared to Rs205 for the season 2010-11. This hefty increase in the state advised cane price was politically induced without any economic rationale even as domestic sugar prices remained subdued owing to a surplus production. The result was that most sugar companies were unable to absorb the increased production cost leading to all time high cane price arrears around Rs3200 crores in U.P.

However, the increased crushing and volume growth helped amortise fixed costs more effectively and enhance the availability of byproducts to feed the downstream power and alcohol businesses. The Company is attractively placed to utilise the total availability of byproducts through the manufacture of synergic downstream products through its integrated business model.

The sugar season 2011-12 commenced with an opening stock of approximately 5 million tonnes at national level. The country's production is estimated at 26 million tonnes against a consumption of 23 million tonnes. To mitigate the impact of the surplus, the government prioritised sugar exports under an open general license in two tranches of a million tonnes each [refer to Cane & Sugar Policy], which has helped stabilise domestic sugar realisations.

Power: The power business of the Company performed better during the year under review. The total power generated by our cogeneration plant was 7390.47 lac units, as against 10153.88 lac units in the previous period. Power export to UPPCL was 5267.96 lac units as against 7110.77 lac units in the previous period; the total value of power exported to the grid was Rs21810.68 lacs as against Rs29392.93 lacs in the previous period.

Distillery: The distillery performance was satisfactory. The Company produced 280.47 lac BL industrial alcohol, 165.31 lac BL ethanol and 112.07 lac BL ENA as against 383.01 lac BL, 141.61 lac BL and 186.62 lac BL respectively during the previous period. The average realization (net of excise duty) per BL of industrial alcohol, ethanol and ENA was Rs26.70 as against Rs25.10 in 2009-11.

Organic manure: The performance of organic manure manufacture was satisfactory during the year under review.

Subsidiary companies

Indo Gulf Industries Ltd (IGIL): IGIL reported a net loss of Rs75.10 lacs for the year ended 31st March, 2012.

Balrampur Overseas Pvt. Ltd. (BOPL): BOPL, a wholly owned subsidiary of the Company incorporated in Hong Kong, reported a loss of Hong Kong $ 74166 for the year ended 31st March, 2012.

The statement under section 212(3) of the Companies Act, 1956 in respect of subsidiary companies is separately annexed.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. The annual accounts of the subsidiary companies and the related detailed information shall be made available to members of the Company and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall be kept for inspection for members at the Company's Registered Office and at the Registered Office of the subsidiary companies concerned.

Cane and Sugar Policy

Season 2011-12: The salient features of the sugar policy were as under:

- The ratio of levy and free-sale sugar remained at 10:90.

- The Fair & Remunerative Price (F&RP) was fixed at Rs145 per quintal linked to a basic recovery of 9.5% subject to a premium of Rs1.37 per quintal for every 0.1% increase in recovery above that level.

- Consequent to the increase in F&RP, the levy sugar price was raised to Rs1974.90 per quintal from Rs1917.18.

- The UP government increased the state advised price from Rs205 per quintal to Rs240 for normal variety.

- The government permitted the export of 20 lac tons of sugar in tranches of 10 lac tons each under an open general license (OGL) to evacuate surplus sugar. Each sugar factory was given a proportionate tradable license based on its average sugar production in the previous three seasons. Beyond 20 lac tons government further allowed unrestricted exports to enable the industry to reduce its inventory leading to the liquidation of outstanding cane dues. The exports were also permitted under OGL without tradable licenses.

Legal cases related to cane price

The judgment related to the cane price for the sugar seasons 2006-07 and 2007-08, which were pending in the Hon'ble Supreme Court, was delivered on 17th January, 2012. The Order directed the payment of the differential price of Rs7 per qntl. for the season 2006-07 and Rs15 per qntl. for the season 2007-08 within three months of the Order. In line with this directive, a sum of Rs92.35 crores was provided for in the accounts of the Company during the year under review as differential cane price for season 2007-08. The arrears of the cane price for the season 2006-07 were already provided in the books of account.

Consolidated financial statements

In compliance with the Accounting Standards 21 and 23 of the Companies (Accounting Standards) Rules, 2006 and pursuant to the Listing Agreement with the stock exchanges, the consolidated financial statements form a part of this Annual Report.

Outlook

The Government of India constituted an Expert Committee under the Chairmanship of Dr. C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister, to examine all aspects related to sugar decontrol. The Committee will meet all stakeholders before submitting its views, touching upon export, cane price linkage, abolition of levy obligation etc. The Committee is expected to submit its report by July 2012.

A final view on the price of ethanol is awaited even though the Expert Committee headed by Dr. Saumitra Chaudhuri, Member Planning Commission submitted its recommendations a long time ago.

Brazil is a relevant example where deregulation a decade-and- a-half ago has benefited the country through increased production, remunerative price to cane growers, energy security and adequate bio-fuel availability. The result is that Brazil reported a significant and sustainable increase in sugar production from a pre-deregulation level of around 17 million tons to of 30 million tons plus, strengthening the country's position as a regular exporter of ethanol and sugar. Currently owing to ambiguity in policy and decision making, India goes through volatile sugar cycles on regular basis. With complete deregulation of the sugar industry, clarity and sustainable growth of sugar industry in India would lead to large scale benefits for all its stakeholders.

Listing of equity shares

Your Company's equity shares are listed on the Bombay, Calcutta and National Stock Exchanges. Your Company paid the annual listing fees to each stock exchange. An application for delisting of our shares from Calcutta Stock Exchange is pending.

Corporate governance

As per Clause 49 of the Listing Agreement with the stock exchanges, Management Discussion and Analysis, Corporate Governance report and the Auditors' Certificate on the compliance of conditions of Corporate Governance, form a part of the Annual Report. However, the voluntary guidelines on Corporate Governance issued by the Ministry of Corporate Affairs, Government of India, will be considered after the enactment of the New Companies Bill by the Government.

Credit rating

ICRA has assigned a credit rating of A & A1 respectively for Company's long term and short term debt.

Risk management

The Board of Directors regularly reviewed risks and threats and took suitable proactive initiatives to safeguard the Company's interest.

Buyback of shares

The Board of Directors at its meeting on 22nd February, 2011 announced a buyback of the Company's fully paid up equity shares of Rs1 each at a price not exceeding Rs85 per share. This was permitted to be paid in cash out of the free reserves by way of purchase from the open market through the stock exchanges for an amount up to Rs110 crores. The buyback closed on 5th July, 2011. The Company bought back 15410135 equity shares at an average price of Rs71.17 per share aggregating Rs109.68 crores. The acquired shares were extinguished and following this, the paid-up share capital of the Company was reduced to Rs24.43 crores.

Employee Stock Option Scheme

Pursuant to the Provision of Guidelines 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended, the details of Stock Options as on 31st March, 2012 under the Employee Stock Option Scheme, 2005 are set out in the Annexure to the Directors' Report.

Directors

Shri S.B. Budhiraja ceased as Director of the Company with effect from 23rd July, 2011 as he did not seek re-election in the last Annual General Meeting. The Board places on record its high appreciation for the valuable services rendered by Shri

S.B. Budhiraja during his tenure as a director and chairman of the Audit Committee.

Shri R.N. Das was appointed as Additional Director of the Company with effect from 23rd July, 2011. He will hold office up to the date of the ensuing Annual General Meeting. The Company received a notice under Section 257 of the Companies Act, 1956 from a member proposing Shri R.N. Das as a director of the Company.

Shri Naresh Chandra and Shri R.Vasudevan, Directors of your Company, retire from the Board by rotation and are eligible for re-election.

Directors' responsibility statement

As required under Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that:

i. In preparation of the annual accounts, the applicable accounting standards have been followed.

ii. The Directors have 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 your Company at the end of the financial year, and of the profit of your Company for that year.

iii. The Directors have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, and

iv. The Directors have prepared the annual accounts on a 'going concern' basis.

Particulars of employees

The particulars of employees, as required under Section 217(2A) of the Companies Act, 1956, are given in a separate annexure attached hereto and form part of this report.

Conservation of energy etc.

The particulars related to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956, are given in a separate annexure attached hereto and form a part of this report.

Fixed deposits

The Company did not accept any deposit under section 58A of the Companies Act, 1956 during the year under review.

Auditors & Auditors' Report

M/s. G.P. Agrawal & Co., Chartered Accountants, Auditors of your Company, retire and, being eligible, offers themselves for re-appointment. The Notes to Financial Statements referred to in the Auditors' Report are self-explanatory and therefore do not call for any further explanations/ comments.

Cost auditors

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, M/s. N. Radhakrishnan & Co, Cost Accountants, were appointed to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended 31st March, 2012.

The Cost Audit Report for the financial year ended 31st March, 2011 was filed by the Cost Auditors with respect to the sugar units of the Company on 21st September, 2011, which is well within the due date of 30th September, 2011.

Appreciation

Your Board of Directors wish to place on record their sincere appreciation for the continued support from shareholders, customers, suppliers, Financial Institutions, Central Government, Government of U.P, State Bank of India, HDFC Bank, Punjab National Bank, other Bankers and other business associates for the growth of the organisation. A particular note of thanks to all employees of the Company for the cooperation and dedicated services rendered at all levels.

For and on behalf of the Board of Directors

Kishor Shah Vivek Saraogi

Director cum Chief Financial Officer Managing Director

Place: Kolkata

Date : 28th May, 2012.


Mar 31, 2011

The Directors have pleasure in presenting their report as a part of the 35th Annual Report along with the audited accounts of the Company for the 18 months period ended 31st March 2011.

Operating and Financial Review [Rs. in Lacs]

Financial Results 2009-11 2008-09 (For 18 months) (For 12 months)

Gross Turnover 306321.81 177101.78

Operating profit before interest, depreciation and tax 53225.45 45439.72

Interest and other financial charges (net) 13814.36 9684.59

Depreciation & Amortisation 16810.96 10794.38

Provision for taxation 6159.38 36784.70 2310.16 22789.13

Net Profit 16440.75 22650.59

Less : Loss of Maizapur unit on merger 1248.17 –

Add : Balance brought forward from the previous year 4238.55 1599.68

Profit Available for Appropriation 19431.13 24250.27

Appropriations

Proposed dividend on equity shares 1852.05 7702.65

Tax on proposed dividend 300.45 1309.07

Dividend on equity shares (including tax on dividend) for the previous year 59.38 –

General Reserve 10000.00 11000.00

Leaving a balance to be carried forward to next years account 7219.25 4238.55

19431.13 24250.27

Change in financial year

The financial year 2009-10 of the company was extended up to 31st March, 2011 from 30th September 2010. Henceforth, the financial year of the company shall be from 1st April to 31st March. The financial year period was changed as the Company needed to allign its accounts with the emerging changes in law and accounting. The financial results for the year under review covered a period of 18 months and are not comparable with the results of 2008-09, a financial year that covered only 12 months.

Dividend

Your Directors are pleased to recommend a dividend for consideration of the shareholders @ Rs. 0.75 per share.

Operations

The operational data of the Company for the 18 months period covering two sugar seasons (2009-10 and 2010-11) are mentioned below :

Season Cane crushed Sugar produced Recovery (in lac qntls) (in lac qntls)

2009-10 538.58 50.34 9.35

* 2010-11 694.60 65.30 9.40

Total 1233.18 115.64

* Figures include Kumbhi Unit continued upto 4.4.2011

Performance 2009-11

The Company reported a turnover of Rs.3063.22 crores for the period ended 31st March, 2011 as against Rs.1771.02 crores in the previous financial year, a growth 72.96%. However, net profit declined by 27.42% to Rs.164.41 crores from Rs.226.51 crores in the previous year due to a substantial increase in the cost of production.

Sugar season 2009-10: Sugar crushing and production during season 2009-10 was higher at 538.58 lac quintals and 50.34 lac quintals as against 483.22 lac quintals and 44.17 lac quintals respectively in the previous season. Average recovery was marginally higher at 9.35% as against 9.14% in the previous season.

The season began with lower national production estimates which led to a rise in domestic sugar realizations from Rs.28 in October 2009 to a short-lived peak of Rs.42 per kg in January 2010. Concurrently, the international market recorded a 28- year high of 35.58 cents per pound, indicating a domestic and global sugar shortage. This was the first time in the history of the industry when sugar prices had moved up sharply and suddenly during the season, resulting in mills needing to compete to obtain raw material at higher prices

following a scenario where farmers were not ready to supply cane at lower prices due to higher end product realisations. What made matters more challenging, mills raised cane prices at regular intervals through the season.

Your company paid Rs.230 per qntl for cane against a State Advised Price (SAP) of only Rs.165 per qntl. Mills not only paid higher cane prices but imported raw and white sugar in a big way, estimated at approximately 50 lac tons. This high cane price increased production costs, which coincided with a decline in global sugar prices.

Meanwhile, the government of India imposed unprecedented restrictions on the sale of sugar - weekly quota sale, stock limits on traders and compulsory imports by bulk consumers etc. - to cool high domestic prices. The combined effect of these measures collapsed sugar realizations from a peak Rs.42 to a low Rs.26 a kg. Since the industry had already paid a higher cane price, it was now saddled with high cost sugar which needed to be liquidated at low realizations, resulting in substantial losses in season 2009-10. However, the Company was able to make good the loss in its sugar segment through its integrated business model covering the cogeneration and distillery businesses.

The Company imported 9.06 lac quintals of raw sugar.

Sugar season, 2010-11: Due to higher sugar cane prices paid to farmers during the 2009-10 season, there was a substantial increase in the planting of sugar cane during the 2010-11 season. The Companys crushing and production were substantially higher at 694.60 lac quintals and 65.30 lac quintals respectively with an average recovery of 9.40%.

The season commenced around a projected national sugar production of 240 lac tons. However, the UP government hiked cane price to Rs.205 per qntl effective for the entire season, which made it difficult to rationalize costs. Following the perception of a sugar output, the government of India permitted sugar export under Advance Licence Scheme as well as under Open General License in December 2010. However, a delay in the implementation of this decision resulted in sugar prices remaining sluggish at Rs.28 per kg.

Following volume growth, your Company succeeded in reducing the incidence of fixed costs across all segments.

Power

The profitability reported by the Power Division was higher on account of adequate capacity utilization that was derived from higher crushing and bagasse availability. The Uttar Pradesh Electricity Regulatory Commission increased the tariff for bagasse-based cogen plants for five years with effect from FY 2009-10. The total power generated by our cogeneration plant was 10153.88 lac units, as against 4957.54 lac units in the previous year. Consequently, power export to UPPCL was higher at 7110.77 lac units as against 3576.58 lac units in the previous year; the total value of power exported to the grid was correspondingly higher at Rs.29392.93 lacs as against Rs.12477.72 lacs in the previous year.

Distillery

The distillery performance was satisfactory as it produced 383.01 lac BL industrial alcohol, 141.61 lac BL ethanol and 186.62 lac BL ENA as against 267.05 lac BL, 101.60 lac BL and 114.07 lac BL respectively during the previous year. The cumulative average realization (net of excise duty) per BL of industrial alcohol, ethanol and ENA was Rs.25.10 in 2009-11 as

against Rs.26.14 in 2008-09.

Organic manure

The performance of our organic manure manufacturing operation was satisfactory.

Subsidiary companies

Indo Gulf Industries Ltd (IGIL): The Honble Board for Industrial & Financial Reconstruction (BIFR) vide its order dated 24.06.2010, sanctioned a Rehabilitation Scheme for the revival of Indo Gulf Industries Ltd (IGIL), a subsidiary of the Company. As per the sanctioned Scheme, the Sugar Division of IGIL, situated at Maizapur, Gonda, Uttar Pradesh was demerged from that company and then merged with Balrampur Chini Mills Ltd (BCML) with effect from 1st October, 2008. As per the Scheme, BCML issued and allotted to IGIL shareholders in the ratio of 1 equity share of Rs.1/- each fully paid up for every 100 equity shares of Rs.1/- each (post restructuring) held by them in IGIL as on 24.08.2010, except to BCML itself to the extent of its shareholding in IGIL. Accordingly, BCML allotted 44048 equity shares of Rs.1/- each to IGIL shareholders. The Explosive units of IGIL continued as the sole business of IGIL as per the sanctioned Scheme. IGIL reported a net loss of Rs.191.94 lacs for the 18 months period ended 31st March, 2011.

Balrampur Overseas Private Limited: Balrampur Overseas Private Limited (BOPL), a wholly owned subsidiary of the Company incorporated in Hong Kong, reported a net profit of Hong Kong $2257495 for the 18 months period ended on 31st March, 2011.

The statement under section 212(3) of the Companies Act, 1956 in respect of subsidiary companies is separately annexed.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the holding and subsidiary

companies seeking such information at any point. The annual accounts of the subsidiary companies shall be kept for inspection by any shareholders at Registered Office of the holding company and of the subsidiary companies concerned.

Cane & Sugar Policy

Season 2009-10

The salient features of the sugar policy were as under:

- Keeping in mind the requirement of BPL families (2.8 million), the government increased its levy sugar obligation from 10% to 20% for the season 09-10 owing to a lower sugar production envisaged in the said season.

- The Fair & Remunerative Price (F&RP) was fixed at Rs.129.84 per qntl linked to a basic recovery of 9.5% subject to a premium of Rs.1.37 per qntl for every 0.1% increase in recovery above that level.

- Consequent to the increase in F&RP, the levy sugar price was raised to Rs.1826.13 per qntl from Rs.1384.

- The UP government increased SAP to Rs.165 from Rs.140 per qntl.

- The government permitted duty-free imports of white and raw sugar from April 2009 to tide the country over a shortage in domestic production.

Season 2010-11

With a revival in production estimates, the government reverted to the levy obligation level of 10%. F& RP was increased to Rs.139.12 per qntl linked to a basic recovery of 9.5% subject to a premium of Rs.1.37 per qntl for every 0.1% increase in recovery above that level. The levy sugar price was also revised to Rs.1917.18 per qntl. The UP government enhanced SAP from Rs.165 to Rs.205 per qntl. The government of India permitted the export of sugar under Advance Licence Scheme by millers for their earlier years obligation, the quantum of which was around 12 lac tons. The government permitted the export of 5 lac tons under OGL to eliminate the possibility of cane arrears and also stabilize domestic realisations.

Legal cases related to cane price

As reported last year, legal cases relating to cane prices for the sugar seasons 2006-07, 2007-08 and 2008-09 were pending in Supreme Court of India. The next hearing is scheduled after the opening of the Courts following the vacation.

Refinery

The Company had commissioned a refinery of 500 TCD at its Haidergarh plant for Rs.5 crores, increasing the Companys refinery capacity to 1200 TCD (including 700 TCD at the Rauzagaon plant). The Company plans to enhance the refinery capacity at its Haidergarh plant by 3600 TCD. This will provide the Company with revenue and production stability in years when imports are necessary to meet the countrys demand-supply gap.

Consolidated financial statements

In compliance with the Accounting Standards 21 and 23 of the Companies (Accounting Standards) Rules, 2006 and pursuant to the Listing Agreement with the stock exchanges, the consolidated financial statements form a part of this Annual Report.

Outlook

The sugar industrys long standing demand of deregulation was actively considered at the highest level of the government. However, the government was unable to take a decision and the industry waited anxiously for this development. It would pertinent to indicate that the global sugar industry is deregulated. Since India is the largest sugar consumer, deregulation would be in the broader interest of all stake holders – growers, millers and consumers – as it would reduce the cyclic impact and minimize government interference. Brazil is a relevant instance of the benefits of deregulation: following this decision, sugar production at 30 million tons a season has created a win-win proposition for all stakeholders.

The Empowered Group of Ministers [EGOM] has mandated that Oil Marketing Companies [OMC] blend 5% ethanol with

petrol, fixing an interim price of Rs.27 per BL. OMC placed orders on sugar mills for buying 58 crore litres of ethanol. EGOM also constituted a Committee under the chairmanship of Dr Soumitra Choudhury to reconsider a sustainable price of ethanol, a step in the right direction.

Against 187 lac tons of 2009-10 production, season 2010-11 began with an opening stock of 50 lac tons. The export of 12 lac tons under ALS and 5 lac tons under OGL and domestic consumption at 225 lac tons, will ensure no inventory addition. With growth in the countrys GDP and sugar consumption, sugar prices are expected to improve gradually.

With an increase in the volume of bagasse and molasses, capacity utilization of the Companys power and distillery assets will increase, leading to a higher profitability.

Listing of equity shares

Your Companys equity shares are listed on the Calcutta, Bombay and National Stock Exchanges. An application for delisting our shares from Calcutta Stock Exchange is pending. Your Company paid the annual listing fees to each stock exchange. The Companys GDRs are listed on the Luxembourg Stock Exchange.

Corporate governance

As per Clause 49 of the Listing Agreement with the stock exchanges, Management Discussion and Analysis, Corporate Governance report and the Auditors Certificate on the compliance of conditions of Corporate Governance, form a part of the Annual Report. However, the voluntary guidelines on Corporate Governance issued by the Ministry of Corporate Affairs, Govt. of India, will be considered following the introduction of New Companies Bill in the Parliament.

Credit Rating

The ICRA credit rating for short-term debt mobilized by your Company for a sum of Rs.500 crores was A1+.

Change in capital structure

The Company issued and allotted 2924950 equity shares of Rs.1/- each at a price of Rs.45 per share (including premium of Rs.44 per share) upon the exercise of 2924950 options under the Employee Stock Option Scheme. The Company also allotted 44048 equity shares of Rs.1/- each to the shareholders of Indo Gulf Industries Ltd vide BIFR order dated 24.06.2010. Consequently, the paid up share capital of the Company increased to 259724058 equity shares of Rs.1/- each.

Buyback of shares

The Board of Directors of the Company in its meeting on 22nd February, 2011 approved a proposal to buyback the Companys fully paid up equity shares of Rs.1/- each at a price not exceeding Rs.85 per share, payable in cash, for an amount upto Rs.110 crores out of free reserves by way of purchase from the open market through the stock exchanges. Accordingly, the Company bought back 4678678 shares upto 31.03.2011 and extinguished 3449147 shares as on 31.03.2011. Following extinguishment, the paid-up share capital of the Company was Rs.256274911 as on 31.03.2011.

Employee Stock Option Scheme

Pursuant to the Provision of Guidelines 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended, the details of Stock Options as on 31st March, 2011 under the Employee Stock Option Scheme, 2005 are set out in the Annexure to the Directors Report.

Directors

Shri R.K. Choudhury and Shri S.B. Budhiraja, Directors of your Company, retire from the Board by rotation and are eligible for re-election.

Directors responsibility statement

As required under Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that:

i. In preparation of the annual accounts, the applicable accounting standards have been followed.

ii. The Directors have 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 your Company at the end of the financial year, and of the profit of your Company for that period.

iii. The Directors have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, and

iv. The Directors have prepared the annual accounts on a going concern basis.

Particulars of employees

The particulars of employees, as required under Section 217(2A) of the Companies Act, 1956, are given in a separate annexure attached hereto and form part of this report. However, as permitted by Section 219(1)(b)(iv) of the Companies Act, 1956, the abridged annual report is being sent to all the members of the Company excluding the said Annexure.

Conservation of energy etc.

The particulars related to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956, are given in a separate annexure attached hereto and form a part of this report.

However, as permitted by Section 219(1)(b)(iv) of the Companies Act, 1956 the abridged Annual Report is being sent to all the member of the Company excluding the said Annexure.

Fixed deposits

The Company did not accept any deposit under section 58A of the Companies Act, 1956 during the year under review.

Auditors & Auditors Report

M/s. G.P. Agrawal & Co., Chartered Accountants, Auditors of your Company, retire and, being eligible, offers themselves for re-appointment. The Notes on Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further explanations/comments.

Cost Auditors

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, M/s. N. Radhakrishnan & Co, Cost Accountants, were appointed to conduct cost audits relating to sugar, electricity and industrial alcohol.

The Cost Audit Report for the last audited accounts for the financial year ended 30th September, 2009 was filed by the Cost Auditors with respect to the sugar units of the Company on 18th March, 2010, which is well within the due date of 31st March, 2010.

Appreciation

Your Board of Directors place on record their sincere appreciation for the continued support from shareholders, customers, suppliers, Financial Institutions, Central Government, Government of U.P, State Bank of India, other Bankers and other business associates for the growth of the organisation. A particular note of thanks to all employees of the Company for the cooperation and dedicated services rendered at all levels.



For and on behalf of the Board of Directors

Kishor Shah Vivek Saraogi Director-cum-Chief Financial Officer Managing Director

Kolkata 13th May, 2011


Sep 30, 2009

Even as the world passed through its most challenging year in decades, BCML reported a vigorous rebound in profits.

While this may seem odd to most people exposed to the phenomenon of a decline in profits at a time of financial uncertainty, decoupling was a visible reality in Indias sugar industry in 2008-09.

Take the macro perspective. The foundation for the next phase in the cyclicality of the Indian sugar industry was laid well before the financial market showed its first sign of collapse. This transpired after the Uttar Pradesh government raised cane prices independent of sugar realisations and the prevailing reality in 2006. The result was that mills could not remunerate farmers in 2006-07 and 2007-08. Meanwhile, other cereal realisations rose, inducing cane farmers to grow alternative crops. The combined effect was a sharp decline in cane cropping, which inevitably translated into higher sugar realisations. The reality of a sugar price increase (.arising out of a drawdown in Indian cane supply) was far too severe to be influenced by the

collapse in the global financial markets.

Take the micro perspective. Even as global markets collapsed in October 2008, Balrampur passed through relatively unscathed for an important reason: we had a relatively under- stressed balance sheet with no cocktailing of foreign exchange transaction derivatives. As a result, every lender knew exactly where we stood — no hidden liabilities. As an extension of this conservative reality, we refused to dilute our equity even when cash was easily available in 2009, simply because we did not have any project at hand to deploy it profitably.

Now to answer the question that was asked: owing to these realities, we grew our topline 14.08% and bottomline 133.44% in 2008-09 over 2007-08, indicating a vigorous rebound from a cyclical bottom.

What were the significant challenges and achievements of 2008-09-

During 2008-09, there were no major challenges for the Company as cane output declined and our operations ran on an auto-pilot mode, except for the period between Qctober and December when the financial sector was affected by turmoil.

So Balrampur set about bringing all variables under its direct control. In January 2008, the promoters reinforced the Companys net worth with an infusion at Rs. 92 per share at one of the most challenging moments in its existence, enhancing creditor comfort. This also reinforced our funding to sustain production during a challenging downturn.

Besides, we were always aware that when profits rise, so do our costs. Not this time though; we set about managing our costs better and though the effects may be visible only in 2009- 10, I can assure that our overheads will be relatively lower and better benchmarked across the industry.

How do you see the sugar trend unfold-

I visualise a robust industry performance for three years due to the following reason: a global production shortage. Brazil, the largest supplier of sugar to the global markets, was affected by a production shortfall because of adverse climatic conditions and cane diversion towards ethanol. In

India, cane is facing competition from alternative inflationary food crops; however, farmers may revert towards cane plantation in the face of surging sugar prices. Sugar production may be no more than 16 million tonnes in 2009-10 and around 21 million tonnes in sugar year 2011-12. That would still be well short of the growing national demand.

So what is the growing demand likely to be-

One of the points that I want to emphasise is that the industry rebound this time has a more sustainable - and less cyclical - character to it; this is so because I can see evidence of robust consumption building up in the country. Even though India has a deep-rooted mithaai tradition, the countrys per capita annual sugar consumption of around 26 kg is less than half that of the US. I see evidence of rising consumption: the annual 25% increase in sugar off-take by Pepsi and Coke are safe indicators. With the GDP rebound, consumption is expected to increase further. I want to emphasise that the industry rebound is not just weather-led but consumption- led. It is a structural shift, not merely a climatic one. As a result, the projected demand of 23 million tonnes in 2009-10 is likely to be 23.5 million tonnes in 2010-11, widening the gap between consumption and supply. Correspondingly, Indias sugar production is not likely to be more than its consumption, and this reality will keep realisations firm across the foreseeable future.

How will Balrampur utilise its profits- More mills-

The other point I wish to make unambiguously to our shareholders is that we do not see any scope of greenfield expansion across the foreseeable future for ourselves or for any player in the industry. The last season was evidence of what I am saying: most mills were scrounging for cane to feed their newly commissioned assets, and the result was that, we were driving up the cost of scarce cane by competing among ourselves. In some cases, plants were operational for only 45 days in the season (compared with around 170 days normally). Our first collective objective will be to maximise asset utilisation from an industry average of a mere 55%. This makes this industry rebound different from the preceding upturns; each previous bull run was accompanied by unprecedented capacity expansion. During this industry rebound, I cannot think of even one sugar manufacturer who is investing in fresh capacity. This makes this bull run more stable than the earlier ones with the industry priority being cane development. Balrampur too would rather work closely with farmers, encourage them to grow more cane, enhance its asset utilisation, then de-bottleneck its existing capacities and seek non- seasonal opportunities. The result is that, should this industry upturn sustain for another couple of years, we expect to generate adequate cash, repay and prepay loans, progress towards a lighter balance sheet and become a considerably more profitable Company.

From which decisions would growth come from-

I have already indicated how we expect to grow our revenues: higher capacity utilisation will lead to enhanced revenues. In addition setting up of 500 million tonnes refinery at Haidergarh Unit will also result in higher utilisation of assets.

In the ethanol division, it will be business as usual, focusing on high utilisation to cover the relatively lower spread between a high molasses cost and a stable ethanol realisation.

In the power division, one sees a significant upside for a number of reasons: the countrys peak power deficit of 12% will sustain, the Uttar Pradesh government has revised the co-generation tariff from Rs.3.03 per unit to around Rs.4.00 per unit; the concept of open-access and inter- regional transfers will enable U.P. co- generators to get the highest realisation that the market can bear. We intend to capitalise through some specific initiatives: enhance our aggregate power capacity, keep our facilities running in the off-season and convert a number of bagasse-fired boilers to multi-feed at a negligible cost. The result is that we expect to emerge as Indias largest power exporting co-generation Company, resulting in a significant increase in our profits from this division. Going ahead, the power business will be integral to our growth.

What is the road ahead for the Company-

In a consumption-led story, I do not see raw material costs declining. However, I expect the increase in costs to be more than covered by increasing realisations, arising out of a demand-supply mismatch. Much as we are concerned about the impact this will have on consumers, the reality is that with low capacity utilisation and cane simply not available, we foresee a sustained industry upside.

Balrampur will leverage this industry reality to emerge as a stronger Company. For one, we do not expect to make significant investments in gross block; the focus will be on maximising returns through an increase in asset utilisation. We will be debt free Company at net levels in two years. The next big growth is likely to come from the extension of our Indian presence to a global one where we leverage our considerable intellectual, organisational, technical, administrative and entrepreneurial capital.

Your Directors have pleasure in presenting their 34th Annual Report along with the audited accounts of the Company for the year ended 30th September, 2009.

Operating and Financial Review [Rupees in Lacs]

Finacial Results 2008-09 2007-08

Gross Turnover 177101.78 155250.21

Operating Profit Before Interest, Depreciation and Tax 45439.72 32949.44

Interest and Other Financial Charges (Net) 9684.59 8965.11

Depreciation and Amortisation 10794.38 11720.50

Provision for Taxation 2310.16 22789.13 2560.90 23246.51

Net Profit 22650.59 9702.93 Add:

Balance brought forward from the previous year 1599.68 (3608.43)

Profit Available for Appropriation 24250.27 6094.50 Appropriations

Proposed Dividend on Equity Shares 7702.65 1277.68

Tax on Proposed Dividend 1309.07 217.14

General Reserve 11000.00 3000.00

Leaving a balance to be carried forward to next years account 4238.55 1599.68

24250.27 6094.50

Dividend

Your Directors are pleased to recommend payment of Dividend for consideration of the Shareholders on 25,67,55,060 Equity Shares of Re.l/- each @ 300% i.e. Rs.3.00 per share.

Operations

The operational data for the last two years are as follows:

Season 2008-09 (2007-08) Balrampur Babhnan Tulsipur Haidergarh Akbarpur

Crushing 12000 10000 7000 5000 7500

capacity (TCD) (12000) (10000) (7000) (5000) (7500)

Start of crushing 02.12.08 02.12.08 02.12.08 05.12.08 29.11.08

season <29.11.07) (29.11.07)(29.11.07) (30.11.07) (29.11.07)

Closing of crushing 01.03.09 01.03.09 04.03.09 04.02.09 08.02.09

season (01.05.08) (10.04.08) (18.05.08) (18.03.08) (20.03.08)

Duration (Days) 90 90 93 61 71

(155) (134) (172) (109) (112)

Sugar cane crushed 93.02 70.95 51.09 17.64 41.16

(Inlacqntls) < 164.98) (110.81) (99.45) (47.23) (72.44)

Recovery (%) 8.95 9.14 9.39 9.17 9.26

(10.05) (10.26) (9.74) (10.25) (10.16)

Sugar produced 8.32 6.48 4.80 1.62 3.81

(Inlacqntls.) (16.57) (11.37) (9.68) (4.84) (7.36)

Season 2008-09 Rauzagaon Mankapur Kuinbhi Guiana Total 2007-08

Crusing 8000 8000 8000 8000 73500

capacity (TCD) (8000) (8000) (8000) (8000) (73500)

Start of crusing 02.12.08 02.12.08 25.11.08 25.11.08 -

season (29.11.07) (29.11.07) (29.11.07) (04.12.07) (-)

Duration (Days) 08.02.09 28.02.09 21.02.09 28.02.09 -

Closing of crushing 26.03.08) (21.04.08) (21.03.08) (26.03.08) (-)

season 69 89 88 96 -

(119) (145) (114) (114) (-)

Sugar cane crushed 33.61 60.15 53.23 62.37 483.22

(In lac qntls> (67.67) (98.35) (74.62) (70.26) (805.81)

Recovery (%) 9.13 8.97 9.35 9.16 9.14

(10.28) (10.33) (10.52) (10.08) (10.16)

sugar produced 3.07 5.39 4.97 5.71 44.17

(In lacs qntls> (6.95) (10.15) (7.85) (7.08) (81.85)

Performance 2008-09

The Company achieved admirable results for the year ended 30th September, 2009 despite much lower production and lower recovery during season 2008-09.

Sugar

The sugar segment contributed significantly to the overall profitability of the Company. There was a sharp fall in production of sugar in the country from 26.3 million tonnes in 2007-08 to 14.7 million tonnes in 2008-09. The global average sugar prices also moved up from US$ 387 in October 2008 to US$ 610 per tonne in October 2009 owing to adverse weather conditions in Brazil resulting in lower production as well as continuous increased demand in India. Both these factors led to sharp upward movement in prices from Rs.1780 in September 2008 to plus Rs.3000 per quintal in the month of September 2009. Average realisation (net of excise duty) for free sale sugar of the Company for 2008-09 was Rs.2215 as against Rs.1504 per quintal last year.

The Company also gained substantially from carry over stocks of sugar.

Owing to depressed sugar prices during 2006-07 and 2007-

08, the industry was unable to pay the farmers on time whereas for other crops more remunerative prices were offered to the growers which resulted in diversion of land resources to other crops.

Crushing of sugarcane and production of sugar of the Company during the season 2008-09 was substantially lower at 483-22 lac quintals and 44.17 lac quintals as against 805.81 lac quintals and 81.85 lac quintals, respectively in the earlier year. Recovery was also lower at 9.14% as against 10.16% in the previous season.

The gross turnover, profit before tax and after tax and earning per share have shown a remarkable improvement over the last year.

Power

The profitability reported by power division has been lower on account of inadequate capacity utilisation owing to lower crushing and thereby lower availability of bagasse.

During the year under review, the total power generated by cogeneration plants was 4957.54 lac units, as against 7906.88 lac units in the previous year. Consequently, the export to UPPCL was also lower at 3576.58 lac units as against 5735.35 lac units in the previous year. Accordingly, the total value of power exported to the grid was also lower at Rs. 12477.72 lacs as against Rs.17393-55 lacs in the previous year.

Distillery

The performance of distillery was satisfactory in the given circumstances. It produced 267.05 lac BL industrial alcohol, 101.60 lac BL ethanol and 114.07 lac BL ENA, as against 663.62 lac BL, 174.33 lac BL and 72.94 lac BL, respectively, during the previous year. The average realisation (net of excise duty) per BL of industrial alcohol, ethanol and ENA was Rs.26.14 in 08-09 as against Rs.19.62 in 2007-08.

Organic Manure

The performance of organic manure was also satisfactory.

Subsidiary Companies

Indo Gulf Industries Ltd.

During the season 2008-09, the sugar unit of the Indo Gulf Industries Limited (IGIL), a subsidiary of the Company has crushed 13.09 lac quintals of sugarcane and produced 1.10 lac quintal of sugar against 29.71 lac quintal of sugarcane and 2.87 lac quintal of sugar respectively in the preceding year. The recovery was also lower at 8.42% against 9.63% in the previous season. The gross turnover of IGIL during the year ended 30th September, 2009 was Rs. 5048.72 lacs and reported a net loss of Rs.1354.92 lacs. The Board for Industrial & Financial Reconstruction (BIFR) had vide its Order dated 23rd October, 2008 declared Indo Gulf Industries Ltd. (IGIL) a Sick Industrial Company in terms of Section 3(l)(o) of the Sick Industrial Company (Special Provisions) Act, 1985 and appointed State Bank of India (SBI) as Operating Agency under Section 17(3) of the Act to examine the viability of IGIL and formulate a rehabilitation scheme based on the IGIL proposal for its revival. IGIL submitted a Draft Rehabilitation Scheme to SBI which is based on demerger of Sugar unit of IGIL, situated at Maizapur, U.P. and merger of the said sugar unit with Balrampur Chini Mills Ltd. The explosive units of IGIL are proposed to be continued as the sole business of IGIL in the draft rehabilitation Scheme. The State Bank of India after examining the viability of the Scheme has submitted the same to the BIFR for their needful and approval.

Balrampur Overseas Private Limited

Balrampur Overseas Private Limited (BOPL), a wholly- owned subsidiary of the Company, incorporated in Hong Kong has reported a net loss of Hong Kong $ 24682 for the year ended 30th September, 2009.

The statement under Section 212(3) of the Companies Act, 1956 in respect of subsidiary companies is separately annexed.

Cane and Sugar Policy

Central Government announced various policy measures during the year under review as well as for the future. Salient features of the sugar policy effective 1st October, 2009 were as follows:

- Levy sugar component has been increased from 10% in season 2008-09 to 20% for season 2009-10 to meet the requirement under Public Distribution System (PDS) at subsidised rates. This would make available close to 2.6 million tonnes of sugar for PDS. Further, imported raw-sugar and white sugar do not have levy obligation. This is applicable for 2009-10 only.

- Levy sugar price henceforth shall be computed based on Fair and Remunerative Price [F&RP] in place of Statutory Minimum Price [SMP]. The F&RP would provide reasonable margin for growers on account of risk and profits.

- F&RP is applicable from 1st October, 2009.

- All action taken by the Central Government for determination of levy sugar price up to season 2008-09 shall be deemed to be valid notwithstanding anything contained in any judgement, decree or order.

- Govt of India has allowed duty-free import of raw-sugar till 1st January, 2011 and white sugar up to 31st March, 2010 to improve the availability of sugar in the domestic market.

- For season 2009-10, the Central Government has announced the F&RP at Rs.129 84 per quintal linked to a basic recovery of 95% subject to a premium of Rs.1.37 per quintal for every 0.1% increase in recovery above that level.

- The U.P. Government has announced the sugarcane price at Rs.l65 per quintal for normal variety. However, Uttar Pradesh Sugar Mills Association [UPSMA] has declared one time incentive of Rs.25 over and above the above SAP for season 2009-10. Hence total price payable for season 2009-10 would be Rs.190 as against Rs.140 per quintal paid during season 2008-09.

Legal Cases related to Cane Price

The Special Leave Petition (SLP) filed by the industry against the order of the Honble Allahabad High Court, Lucknow

Bench upholding the State Advised Price (SAP) for cane fixed by the State Government of II.P. at Rs.125 per quintal for the season 2007-08 before the Honble Supreme Court is pending. However, the industry had to pay Rs.110 per quintal by virtue of the interim order of the Honble Supreme Court pending its decision. Another Bench of the High Court quashed the SAP holding it illegal, which was challenged by an SLP by the State Government before the Supreme Court. This is also pending.

The Government of U.P. announced the SAP at Rs.140 per quintal for the season 2008-09. The industry filed a Writ Petition before the High Court which was rejected by the said Court. The Order of the Court has also been challenged by an SLP before the Supreme Court by the industry, which is pending. In the meantime, considering various factors, all factories have paid on the basis of the price fixed by the State Government.

Power Policy

The Uttar Pradesh Government has very recently announced "Energy Policy 2009" which has special relaxations for the Cogeneration plants facing shortage of fuel and thus emphasis was laid to utilise the idle capacity to bridge the demand-supply gap in the energy deficient State. The relaxations as announced by the U.P. Govt, were as follows

i) Renewable energy [bagasse] based cogeneration plants would be allowed usage of fossil fuel such as coal or gas to generate power in off-season.

ii) As an incentive, all existing or future cogeneration plants [bagasse or bio-mass] will be allowed to sell 10% of their total generation under open access to third party for next 10 years.

iii) As an incentive for off-season generation the state will allow 50% of the power to be sold anywhere under open access system.

New Tariff

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has revised the tariff for bagasse-based cogeneration plant for a period of 5 years i.e. for the financial year 2009-10 to 2013-14. By virtue of the said order, the effective tariff rate for the bagasse based cogen plant of the Company would be increased by about 30% on an average. This would result in higher revenue and profits to the Company.

Ethanol Policy

Recently Government re-iterated its stand to implement 5% ethanol blending with petrol mandatory. This would result in better utilisation of Alcohol Division. Oil marketing companies have invited tenders for the purchase of ethanol. Various sugar mills participated in this tender which is yet to be finalised.

Fresh tenders are expected in the range of Rs.26/27 per litre compared to Rs.21.50 earlier.

Modification of Boilers for use of alternate fuel and setting up of refinery at Haidergarh

Encouraged by change in the Power Policy by U.P. Govt., the Company has decided to embark upon modification of boilers and plant and machinery at Haidergarh for use of coal as alternate fuel during off-season. Owing to the above modification of boiler at Haidergarh Unit, there would be continued availability of power during off-season.

India might not be self-sufficient in balancing between demand and supply and hence import of raw sugar and white sugar would be imminent in next couple of years. Since power would be available from alternate fuel coal in off-season, the Company has contemplated to put up a refinery in Haidergarh unit. Both would cost about Rs.12 crores which would be funded through internal accruals.

Outlook

With the growth in GDP, the country is witnessing consistent increase in sugar consumption. The rising consumption pattern is evidenced by the annual 25% increase in sugar off-take by Pepsi and Coke. Steady and robust growth in consumption would impart long-term strength and sustainability in the sugar sector.

The Company imported 85000 tonnes of raw sugar at around US$ 385 which would be processed in season 2009- 10 and it is expected to yield handsome profits when processed and sold during 2009-10.

Sugar production in the country during 2009-10 season is estimated at 16 million tonnes as against 14.7 million tonnes produced in season 2008-09. The estimated production thus would be far short of estimated consumption of 23 million tonnes. The gap between supply and demand shall be met through import of raw-sugar and white sugar.

Brazil, the largest global sugar producer, is also facing adverse weather conditions. This is likely to restrict their sugar production to last years level. Brazil is also expected to divert a significant part of the cane crop into production of Ethanol in view of rising crude oil prices.

Huge demand of import from India and flat production all over the world is expected to result in higher sugar prices in the global market.

Sugar price in India is expected to remain robust in view of the reasons mentioned above.

Modification in the power policy for season and off season would bring in sustainable profitability through better capacity utilisation in coming years.

Listing of Equity Shares

Your Companys equity shares are listed on the Calcutta, Bombay and National Stock Exchanges. Application for delisting of the shares from Calcutta Stock Exchange is pending. Your Company has paid the annual listing fees to each of these Stock Exchanges. The GDRs are listed on the Luxembourg Stock Exchange.

Corporate Governance

As per Clause 49 of the Listing Agreement with the stock exchanges, Management Discussion and Analysis, a report on Corporate Governance together with the Auditors Certificate on the compliance of conditions of Corporate Governance form part of the Annual Report.

Credit Rating

The credit rating of Al for short-term debts enjoyed by your Company has since been revised to A1+ by ICRA for a sum of Rs.200 crores.

Change in Capital Structure

The Company issued and allotted 12,18,750 Equity Shares of Re.l/- each at a price of Rs.45 per share (including premium of Rs.44 per share) upon exercise of 12,18,750 options under the Employee Stock Option Scheme. Consequently, the issued and subscribed share capital of the Company as at 30th September, 2009 stands increased to 25,67,55,060 Equity Shares of Re.l/- each.

The Company had allotted 1,00,00,000 convertible warrants on 4th January, 2008, to be converted into equal number of equity shares at Rs.92/- per warrant to the promoter group on preferential basis in accordance with the SEBI [DIP] Guidelines. The Company had received upfront money an amount equivalent to the price fixed i.e. Rs.9-20 per warrant aggregating to Rs.9.20 crores towards allotment money on these convertible warrants. In January 2008, the industry was passing through a severe crisis due to which most companies were under a tremendous cash crunch. In this backdrop and considering the cash needs of the Company, the Company brought in about 76.36 crores through a combination of fully paid up equity share and 10% of paid up warrants. Now the financial position of the Company has undergone a sea change, with the results that the Company today is having sufficient cash surplus for normal operations. As such the promoters have not exercised option for conversion of 1,00,00,000 convertible warrants and the upfront money @ 10% made by the promoters aggregating to Rs.9-20 crores was forfeited pursuant to SEBI (DIP) Guidelines.

Employee Stock Option Scheme

Your Company has formulated and implemented an Employee Stock Option Scheme in accordance with the guidelines issued by the SEBI. Pursuant to the scheme, on 25th November 2008 and on 28th May 2009, 12,80,000 and 14,64,500 stock options respectively, were granted to the eligible employees including the Whole time Directors. The details of options granted and outstanding as on 30th September, 2009 along with other particulars as required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Auditors Certificate required to be placed at the forthcoming AGM, pursuant to Clause 14 of the said Guidelines, are set out in the Annexure to the report.

Directors

Shri K.N. Ranasaria has ceased to be Whole time Director of the Company with effect from 12th May, 2009 on completion of his term.

Shri Sudhir Jalan and Shri M.M. Mukherjee resigned from the Directorships of the Company.

The Board placed on record its high appreciation for the valuable services rendered by Shri K.N. Ranasaria, Shri Sudhir Jalan and Shri M.M. Mukherjee during their tenure as Directors of the Company.

Shri Suresh Neotia resigned from the Directorship of the Company, to retire from the corporate life, and consequently ceased to be the Chairman of the Company. Mr. Neotias guidance has been invaluable to the Board for last 25 years as a Director including as Chairman for last two years. His ability and understanding of all aspects of Corporate Life has been an invaluable asset to the Company. The Board placed on record its deep appreciation for the outstanding contribution made by Shri Neotia during his tenure as a Director and as Chairman of the Company.

Shri Naresh Chandra (Retired IAS) has been appointed as Chairman in place of Shri Suresh Neotia.

Shri R. Vasudevan (Retired IAS) has been appointed as an Additional Director of the Company by the Board in its meeting held on 25th November, 2009. He is an Independent Director and shall hold office upto the date of the ensuing Annual General Meeting and the Company has received a requisite notice under Section 257 of the Companies Act, 1956 from a member proposing Shri R. Vasudevan as a Director of the Company.

Shri Naresh Chandra and Shri Kishor Shah, Directors of your Company, retire from the Board by rotation and are eligible for re-election.

Directors Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956 your Directors confirm that -

i. In preparation of the annual accounts, the applicable accounting standards have been followed.

ii. The Directors have 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 your Company at the end of the financial year, and of the profit of your Company for that period.

iii. The Directors have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities, and

iv. The Directors have prepared the annual accounts on a going concern basis.

Particulars of Employees

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, are given in a separate annexure attached hereto and forms part of this report.

However, as permitted by Section 219(1 )(b)(iv) of the Companies Act, 1956 the Abridged Annual Report is being sent to all the members of the Company excluding the said Annexure.

Conservation of Energy, etc

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1) (e) of the Companies Act, 1956, are given in a separate annexure attached hereto and form part of this report. However, as permitted by Section 219(D(b)(iv) of the Companies Act, 1956 the Abridged Annual Report is being sent to all the members of the Company excluding the said Annexure.

Fixed Deposits

The Company has not accepted any deposit under Section 58A of the Companies Act, 1956 during the year.

Auditors and Auditors Report

M/s. G.P. Agrawal & Co., Chartered Accountants, Auditors of your Company, retire and being eligible, offers themselves for re-appointment. The Notes on Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further explanations/ comments.

Cost Auditors

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, M/s. N. Radhakrishnan & Co, Cost Accountants, have been appointed to conduct cost audits relating to sugar.

Appreciation

Your Board of Directors take this opportunity to express their grateful appreciation for the continued co-operation and support received from the Financial Institutions, Central Government, Government of U.P, State Bank of India, other Bankers, Shareholders, Employees and Customers for the growth of the organisation.

For and on behalf of the Board of Directors

Kishor Shah Vivek Saraogi

Director-cum-Chief Financial Officer Managing Director Kolkata 25th November, 2009

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