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Directors Report of Balrampur Chini Mills Ltd.

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.

 
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