Directors Report of Dwarikesh Sugar Industries Ltd.

Mar 31, 2025

Your Directors are pleased to present their 31^st (Thirty First) Annual Report along with the Audited Financial Statements
of the Company for the year ended March 31, 2025.

FINANCIAL RESULTS

Particulars	Year Ended 31.03.2025	Year Ended 31.03.2024
Gross profit before depreciation, interest & tax	11,991.08	21,661.76
Less: Depreciation	4,892.75	5,250.23
Finance Costs	1,852.28	2,012.93
Profit / (Loss) before tax and exceptional items	5,246.05	14,398.60
Profit / (Loss) before tax	5,246.05	14,398.60
Tax expenses	2,912.48	6,046.86
Profit /(Loss) after tax	2,333.57	8,351.74
Total comprehensive income / (loss)	2,289.86	8,260.08

YEAR IN RETROSPECT

Operations : Distinguishing features of the crushing operations in your company are given in the following paragraphs:
Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given hereunder:

Sugarcane crushed and sugar produced across three units (FY 2024-25)

Particulars	2024-25	2023-24	Change
Crushing (Lakh Quintal)	262.97	366.59	(28.27%)
Recovery % (Gross - adjusted)	10.94	11.63	(5.93%)
Recovery % (Net )	8.00	9.55	(16.23%)
Production (Lakh Quintal)	20.98	35.22	(40.43%)

Sugarcane crushed and sugar produced across three units (SS 2024-25)

Particulars	2024-25	2023-24
Crushing (lakh quintal)	267.58	268.08
Recovery % (Gross - adjusted)	10.96	11.56
Recovery % (Net)	8.04	9.79
Production (lakh quintal)	21.52	26.25

The figures for the 2023-24 sugar season (SS 2023-24) represent the full season, as all units concluded crushing operations
before March 31, 2024. The early cessation of operations across all three units contributed to reduced crushing volumes.

In SS 2024-25, crushing operations concluded on February 22, 2025, at the DD unit, on March 22, 2025, at the DP unit,
and on April 8, 2025, at the DN unit

SNAPSHOT FY 2024-25

¦ Sugarcane crushing declined by 28.27% y-o-y.

¦ Our net recovery for the fiscal year stood at 8.00%, down from 9.55% in the previous year. This decline was primarily
driven by a greater diversion of sugarcane juice for ethanol production. In FY 2023-24, juice/syrup diversion was
limited to the first week of December 2023, following a directive from the Central Government to cease such usage.
In contrast, during the year under review, juice/syrup continued to be diverted until the first week of February 2025.

Additionally, in the previous fiscal year, restrictions on ethanol production from B-heavy molasses resulted in the
generation of C-heavy molasses at our DP unit to fulfil country liquor requirements. This shift contributed to a higher
net recovery in that year. These combined factors led to the reduced net sugar recovery observed in the current fiscal.

¦ Gross-adjusted recovery declined to 10.94% in FY 2024-25, compared to 11.63% in the previous fiscal year. This
decrease is primarily due to adverse weather conditions and reduced sucrose content in the Co 0238 variety, which
was severely affected by a red rot infestation. Additionally, the early conclusion of the 2024-25 sugar season across
all units led to missed crushing operations during the peak recovery period. The decline is also consistent with the
broader trend observed across most sugar mills in Uttar Pradesh.

¦ The decline in sugar production during FY 2024-25 is attributable to both lower cane crushing and reduced recovery
rates. Additionally, the proportion of sugar sacrificed as a percentage of total production was higher compared to
the previous fiscal year. In FY 2024-25, a total of 7.72 lakh quintals of sugar was sacrificed due to the diversion of
sugarcane juice for ethanol production and the generation of B-heavy molasses. This compares to 7.62 lakh quintals
sacrificed in FY 2023-24 for similar reasons.

Performance of cogeneration division: Metrics of power sold :

Unit	FY 2024-25		FY 2023-24
	Power sold in lakhs Units	Amount Hin Lakhs	Power Sold in Lakhs Units	Amount Hin Lakhs
DN	142.96	480	14 3.69	4 89
DP	392.01	1,350	641.06	2,216
DD	397.22	1,367	595.41	2,04 3
Total	932.19	3,197	1,380.16	4,748

(The decline in power sales during the fiscal year is primarily due to reduced cane crushing operations)

During the financial year, the distillery produced 549.83
lakh litres of industrial alcohol, compared to 992.31 lakh
litres in the previous year. Sales of industrial alcohol
stood at 605.18 lakh litres, down from 944.07 lakh litres
in the prior year. Total revenue generated from distillery
operations was H383.03 crores, including H2.37 crores
from the sale of by-products (previous year: H589.11 crores
and H5.56 crores, respectively). The overall performance
of the distillery was adversely impacted by reduced cane
crushing operations.

Global Sugar Industry Scenario & Outlook

¦ The Green Pool April report presents a mixed outlook
for global sugar balances. The 2024/25 crop year
is now projected to experience a larger deficit than
previously estimated, while the 2025/26 outlook has
shifted from a minor deficit to a surplus. However, in
absolute terms, the anticipated deficit for 2024/25
remains significantly higher at 7 million metric tonnes
(raw value), compared to a modest surplus of 1.14
million metric tonnes projected for 2025/26. This
reflects a scenario of limited oversupply following a
year marked by substantial stock drawdowns.

¦ Sugar production for the 2024/25 season is estimated
at 189.1 million metric tonnes (raw value), with the

lower output primarily driven by below-expected
production in India and several other Asian countries,
which offset gains in Brazil and China. For the 2025/26
season, global sugar production has been revised
upward to a substantial 199.1 million metric tonnes,
supported by increased production estimates from
India, Brazil, and other key producing regions

The International Sugar Organization (ISO), in its
latest report, has estimated global sugar production at
175.5 million metric tonnes for the 2024/25 season,
with a projected deficit of 4.9 million metric tonnes.
Notably, there is significant variation in production
estimates across different forecasting agencies.
However, going forward, ISO may revise its production
estimate number.

Recent reports from Centre-South Brazil indicate a
slight upward revision in production figures. March
data—still classified under the 2024/25 season—
places final sugar production at 40.17 million metric
tons, making it the second-highest on record. This
represents a 5.3% decline from the all-time high of
42.42 million metric tons achieved in the 2023/24
season. However, 2025/26 sugar season is projected
to be a year of bumper sugar production, driven by
favorable conditions

¦ Currently, raw sugar is trading at approximately 17.5
cents per pound, while white sugar is priced around
US$ 490 per metric ton. The anticipated surge in sugar
production for the 2025/26 season has created bearish
market sentiment, exerting downward pressure
on prices.

¦ The global sugar market is currently navigating
a complex and uncertain environment shaped by
multiple factors. While a production deficit is expected
in the 2024/25 season, forecasts of significantly
higher output in 2025/26—driven by favorable
weather conditions—are contributing to market
volatility. However, the uncertainties extend beyond
fundamentals. Geopolitical tensions, including the
ongoing Russia-Ukraine and Israel-Hamas conflicts,
rising friction between India and Pakistan, and broader
global instability, such as policy disruptions under
Trump administration and a weakening U.S. dollar, all
have the potential to trigger sharp price fluctuations.
This high level of global interconnectedness adds
further unpredictability to sugar trade dynamics.

¦ India''s sugar production for the current season is
estimated at 26.6 million tonnes. Crushing operations
have concluded across all sugar mills in Maharashtra
and Karnataka, with only a few mills still operating
in Uttar Pradesh. The significant decline in overall
production is primarily attributed to reduced output in
both Maharashtra and Karnataka.

The Indian Sugar Industry - Challenges Galore

¦ Net sugar production for the 2024/25 season is
estimated at approximately 26.4 million tonnes,
after accounting for a diversion of around 3.5 million
tonnes of sugar for ethanol production. This implies
a gross sugar production of 29.9 million tonnes. In
comparison, during the 2023/24 season, gross sugar
production was 34.11 million tonnes, with 2.15 million
tonnes diverted for ethanol, resulting in net production
of 31.96 million tonnes. This reflects a decline of over
12% in gross sugar production year-on-year.

¦ The estimated decline in sugar production is primarily
attributed to a poor sugarcane crop in Maharashtra
and Karnataka, two of India’s leading sugar-producing
states. The crop shortfall in these regions was largely
due to adverse weather conditions. Additionally, a
decline in reported yields and recovery rates in Uttar
Pradesh further contributed to the overall drop in
production. In Uttar Pradesh, the reduction in yield is
mainly linked to widespread damage caused by a red
rot pest infestation.

¦ The Indian Sugar and Bio-energy Manufacturers
Association (ISMA) has yet to release its forecast for
sugar production in the 2025/26 season, despite
international agencies projecting a bumper crop for
India. ISMA has, however, estimated year-end stock
levels at 5.4 million tonnes, after accounting for
exports of 1 million tonnes and domestic consumption
of 28 million tonnes. This stock level equates to
approximately 2 to 3 months of consumption and is
considered sufficient, minimizing the risk of any sharp
spike in sugar prices.

¦ Given the comfortable stock levels at the start of the
2024-25 season and anticipated comfortable stock
levels at the end of SS 2024-25, Government had
notified and allowed export of 1 million tons of sugar.
Last season, 2023-24, the central government imposed
a ban on sugar exports. Out of the total 1 million tons
allocated, sugar mills in Maharashtra received the
largest share of 375,000 tons, which is expected to
increase to around 500,000 tons, as many mills from
Uttar Pradesh typically exchange their quota with those
in Maharashtra. Mills from Uttar Pradesh have been
allocated 274,000 tons. According to the notification
issued by the government, each mill was allocated
approximately 3.2% of its average production over
the past three years as its export quota. Exports are
permitted from the date of the order until September
30, 2025. Additionally, the government has provided
flexibility for mills to either surrender or exchange their
export quota with the domestic quota, offering greater
adaptability in managing their logistics challenge.

¦ Domestic sugar prices remained subdued below
H38,000 per metric tonne through the end of the
third quarter of FY 2024-25, largely due to weak
international prices, uncertainty surrounding
domestic production estimates, and higher monthly
release quotas. However, beginning January 2025,
prices began to recover, supported by improved
market sentiment and the announcement of export
permissions. Currently, sugar prices are hovering
around H4,000 per quintal and are expected to remain
at elevated levels in the near term.

¦ According to recent reports, approximately 707 crore
litres of ethanol were blended during the Ethanol
Supply Year (ESY) 2023-24. Of this, slightly less than
50% was supplied by the sugar sector, while the
remaining came from the grain sector. The overall
ethanol blending rate achieved during the year stood at
14.6%. At the beginning of Sugar Season (SS) 2023-24,
the government had imposed restrictions on the use
of sugarcane juice, syrup, and B-heavy molasses for
ethanol production. However, for ESY 2024-25, these

restrictions were lifted, allowing the use of all three
feedstocks. This policy shift enabled potential diversion
of up to 3.5 million tonnes of sugar toward ethanol
production, significantly boosting ethanol output for
the year.

¦ According to the latest reports from the Government of
India, Oil Marketing Companies (OMCs) have procured
approximately 369.54 crore litres of ethanol as of
March 31, 2025. Of this, the sugar sector contributed
181.03 crore litres, while the grain sector supplied
188.51 crore litres—representing a contribution share
of 48.98% and 51.02%, respectively. India has made
significant progress in ethanol blending over recent
years. Blending levels rose from 5% in 2019-20 to
12% in 2022-23, with ethanol production increasing
from 173 crore litres to over 500 crore litres during
the same period. By the end of the Ethanol Supply Year
(ESY) 2024, the national blending rate reached 14.6%.
As of March 31, 2025, India has achieved a current
average ethanol blending rate of 18.36%, with a
monthly average of 19.78% recorded for March 2025.
The country remains on track to achieve its revised
target of 20% blending by 2025—five years ahead of
the original 2030 timeline set by the National Policy on
Biofuels (NPB), 2018.

¦ Despite repeated appeals from the Indian Sugar &
Bio-energy Manufacturers Association (ISMA), the
government has not revised the ethanol procurement
prices for ethanol produced from sugarcane juice/
syrup and B-heavy molasses for the second consecutive
Ethanol Supply Year (ESY). This stagnation in pricing
comes despite an increase in the Fair and Remunerative
Price (FRP) of sugarcane, which was intended to be
the basis for determining ethanol procurement rates.
This has discouraged many sugar mills from utilizing
cane juice or syrup for ethanol production, prompting
a shift toward a more remunerative strategy—focusing
on increased sugar production and using B-heavy
molasses as the preferred feedstock for ethanol.

¦ The sugar industry has also been consistently
advocating for an increase in the Minimum Selling
Price (MSP) of sugar, which has remained unchanged
at H3,100 per quintal for several years

¦ The Indian sugar industry operates under a tightly
regulated framework, with government policies
significantly influencing sugar sales, pricing, ethanol
blending, and exports. These regulatory mechanisms
are critical to shaping the profitability of sugar
companies across the country. A balanced and rational
policy approach is essential to effectively manage
domestic supply and demand dynamics, ensuring price
stability and the long-term sustainability of the sector.

¦ Ethanol blending and sugar export policies, in
particular, play a vital role in addressing surplus sugar
production and managing stock levels. In recent years,
India has grappled with elevated sugar inventories. If
not effectively addressed through strategic blending
and export interventions, such surpluses could
depress domestic prices, eroding the margins of sugar
producers. This could also lead to mounting cane price
arrears and trigger wider agrarian distress.

¦ The Central Government continues to play a pivotal
role in regulating various facets of the sugar sector:

¦ Minimum Selling Price (MSP): The government
has fixed the MSP of sugar at H3,100 per quintal.
However, the industry has consistently advocated for
an upward revision in light of rising input and cane
procurement costs.

¦ Monthly Release Mechanism: To ensure adequate and
affordable sugar availability in the open market, the
government regulates monthly sugar sales through
a release mechanism. This system helps moderate
supply and supports market stability.

¦ Sugar Export Quotas: The timely announcement of
export quotas helps improve liquidity within the
industry and supports better domestic realizations by
offloading surplus stock.

¦ Fair and Remunerative Price (FRP) & State Advised
Price (SAP): The Central Government announces
the annual FRP, which serves as the minimum price
sugar mills must pay to farmers for sugarcane. Some
state governments supplement this with a higher
State Advised Price (SAP), offering further support to
sugarcane growers.

¦ Ethanol Procurement Pricing: The Central Government
also determines the ethanol procurement price
for Oil Marketing Companies (OMCs). This pricing
significantly influences the participation of sugar
mills in ethanol supply programs, particularly for
ethanol derived from sugarcane juice, syrup, and
B-heavy molasses.

The Uttar Pradesh Sugar Industry

¦ During Sugar Season (SS) 2023-24, Uttar Pradesh
produced approximately 10.5 million tonnes of sugar.
For SS 2024-25, sugar production in the state is
estimated to decline to around 9.5 million tonnes, after
accounting for diversion toward ethanol production.
This reflects a drop in both gross and net sugar output.
The decline is primarily attributed to lower cane yields,
reduced cane availability, a decrease in the area under
sugarcane cultivation, and a fall in sugar recovery rates.

¦ The decline in sugar production has been observed
across Uttar Pradesh, with Central UP being the most
severely affected. A significant contributing factor has
been the red rot infestation in the Co-0238 variety,
which has caused considerable damage. The absence
of a viable alternative to this variety, coupled with
diminishing returns from sugarcane cultivation,
has discouraged farmers from growing sugarcane,
prompting a shift toward alternative crops.

¦ Sugar mills have stepped up their efforts in cane
development by actively engaging with farmers
to highlight the long-term benefits of sugarcane
cultivation. They are focusing on the development and
promotion of high-performing, mutually beneficial
sugarcane varieties that offer higher yields for farmers
and improved sucrose content for mills—creating a
sustainable win-win model for both stakeholders.

¦ The molasses policy of the Uttar Pradesh State
Government imposes a significant financial burden
on sugar mills, as they are mandated to allocate
a substantial portion of their molasses output for
country liquor production at heavily discounted prices.

This practice is unique to Uttar Pradesh, with no other
state enforcing a similar policy.

¦ The Uttar Pradesh State Government has announced
the State Advised Price (SAP) for the Sugar Season
2024-25, maintaining it at the same level as the
previous season. Additionally, the society commission
rate remains unchanged at H5.50 per quintal.

¦ With the low base of sugar production in Sugar Season
(SS) 2024-25, the outlook for SS 2025-26 appears
optimistic—provided there are no significant weather
disruptions. The setbacks experienced in the previous
season, particularly the decline in yields caused by
red rot infestation, have acted as a wake-up call for
farmers. In response, they are intensifying efforts to
protect the ratoon crop and are actively working to
replace the vulnerable Co-0238 variety with more
resilient and high-performing alternatives.

¦ Sugar mills generally ensured timely cane price
payments during the season, supported by improved
cash flows from sugar exports. As a result, payment
arrears remained within manageable levels.

Dwarikesh - Financial Scorecard :

Particulars	2024-25		2023-24
	(H in lakh)	(%)	(H in lakh)	(%)
Revenue from operations	1,35,888	100	1,70,957	100.00
EBITDA	11,991	8.82	21,662	12.67
EBDTA	10,138	7.4 6	19,649	11.49
EBT	5,246	3.86	14,399	8.42
EAT	2,334	1.72	8,352	4.89

¦ The revenue from operations for FY 2024-25 declined
by approximately 21% compared to the previous fiscal
year, mainly due to reduced crushing activity, which
led to a lower level of operations across all divisions.

¦ The EBITDA for FY 2024-25 stood at H11,991 lakhs,
representing a 45% decline from H21,662 lakhs in
the previous fiscal year. This decrease was primarily
driven by suboptimal utilization of sugar plants due to
inadequate sugarcane availability, further impacted by
a 69 basis point drop in recovery rates. The resulting
underutilization of capacity led to higher per-unit
production costs, negatively affecting profitability.
Moreover, the adverse regulatory impact of stagnant
ethanol prices further contributed to the decline. As
a percentage of revenue, EBITDA decreased to 8.82%,
down from 12.67% in the previous year.

¦ The earnings before tax (EBT) for FY 2024-25
amounted to H5,246 lakhs, a significant decline from
H14,399 lakhs in the previous fiscal year, despite a
reduction in finance costs & other expenses

¦ Earnings after tax (EAT) for FY 2024-25 stood at
H2,334 lakhs, compared to H8,352 lakhs in the previous
fiscal year. The significant gap between EBT and EAT
is primarily due to higher deferred tax provisioning
during the year.

Salient Features:

¦ During the Sugar Season (SS) 2024-2025, up to March
31, 2025, our company processed 2.63 crore quintals of
sugarcane, achieving a gross recovery rate of 10.94%.
The crushing operations commenced across all units
on November 4, 2024; however, the start was met
with unforeseen challenges. Crushing at the DN unit

extended a few days beyond March 31, 2025, bringing
the total cane crushed for the entire season to 267.58
lakh quintals. This figure is marginally lower than
the total crushed in SS 2023-2024 and represents a
significant decline compared to earlier seasons.

¦ At our DD unit in Bareilly district, crushing concluded
on February 22, 2025 with the unit recording the
highest percentage decline in crushing volume. The
reduction was primarily due to a sharp decrease in
spring planting across the command area, caused
by the widespread incidence of red rot infection. In
response, the company has undertaken extensive
measures to protect the ratoon crop and promote
varietal replacement. Despite these efforts, the unit
experienced a notable 19% drop in cane crushing and
crushed only 76.14 lakh quintals of sugarcane. The
continued decline in returns has also led many farmers
in the region to consider shifting to alternative crops.
To address this, aggressive initiatives are underway to
encourage farmers to return to sugarcane cultivation.
These include the distribution of seeds of improved
cane varieties at subsidized rates, along with large-
scale awareness, education, and training programs.

¦ Bijnor district, where two of our three units are
located, also witnessed reduced sugarcane availability
during the season. This decline was primarily due to
a widespread red rot infestation—an unprecedented
development for the region, which had previously
experienced only minimal impact from the disease.
The outbreak severely affected cane fields, significantly
reducing farm-level yields. The DP unit concluded
its crushing operations on March 22, 2025, with a
total of 87.46 lakh quintals crushed, while the DN
unit completed its season on April 8, 2025, having
crushed 103.98 lakh quintals. Encouragingly, farmers
in Bijnor—known for their progressive and adaptive
approach—have actively responded to the company’s
initiative to phase out the Co 0238 variety. They are
transitioning to newer, early-maturing varieties, and
it is expected that within two years, Co 0238 will
be virtually eliminated from the command areas of
both units.

¦ The fiscal year under review was marked by
underutilization of capacities, observed across both
our sugar and distillery units. This underutilization
at sugar units stemmed from the reduced availability
of sugarcane.

¦ Although the company, in collaboration with farmers,
has implemented a large-scale varietal replacement
program, the newly introduced varieties have yet
to match Co 0238 in terms of yield and recovery.

Nevertheless, promising alternatives are on the
horizon, expected to deliver both high yield and
recovery, ultimately making Co 0238 redundant. The
recently concluded season also saw lower recovery
rates across Uttar Pradesh, primarily due to adverse
weather conditions

¦ Additionally, stagnant ethanol procurement prices
for ethanol produced from juice/syrup and B-heavy
molasses proved counterproductive. Following the
announcement of unchanged prices, the company
decided to discontinue the use of juice / syrup at both
distilleries starting from the first week of February
2025. This strategic move aimed to optimize the
feedstock mix and maximize overall returns.

¦ During the fiscal year, your company was allotted
an export quota of 10,044 MT of sugar. However, as
direct export of this quantity was not economically
viable, the company strategically swapped the quota
with mills located near coastal areas in exchange for
their domestic quota. The benefits of this increased
domestic allocation began accruing to the company
from March 2025.

¦ Your company enjoys long term rating of (ICRA)
AA- (pronounced as AA minus). Your company also
retained the highest rating of A1 also from ICRA for
its CP program of H300 crores. The company enjoys the
highest internal rating of A1 accorded by PNB.

¦ Your Company continued its commitment to timely
sugarcane payments, consistently paying ahead of
schedule. As of date, all payments for sugarcane
procured during Sugar Season 2024-25 have been
fully cleared. This underscores the company''s strong
financial position and liquidity.

¦ Long-Term Debt Profile: During the fiscal year, the
company fully repaid the Soft Loan 2018 of H134.48
crores availed from the Government of Uttar Pradesh.
All loan instalments continue to be repaid promptly
as they fall due. As of March 31, 2025, the company''s
outstanding long-term debt stood at H147.45 crore.
This includes H17.53 crore relating to the H116.88
crore term loan for the DN distillery unit, and H129.92
crore pertaining to the H185.60 crore loan for the DD
distillery unit. All term loans have been secured at
subsidized rates of interest.

¦ Your Company is constantly exploring possibilities
of revenue optimization, cost rationalization and
profit enhancement. Your Company is respected for
competent management.

CANE & SUGAR POLICY

The main policies of the government in relation to the sugar industry during the year were:

a. The Fair & Remunerative Price (FRP) until SS 2017-18 was linked to a recovery of 9.50%. Effective SS 2018-19, FRP
has been linked to a recovery of 10%. While the FRP for SS 2022-23 was H305 per quintal for SS 2023-24, the same
stands increased to H315 per quintal again linked to a recovery of 10.25%. The same has now been increased from
H340 for SS 2024-25 to H355 per quintal for SS 2025-26. There is no change in the base recovery which is unchanged
at 10.25%

b. Chronology of SMP/FRP announced by the Central Government on the basis of recovery is given herein under:

Season	H per Quintal
2000-01(SMP)	59.501
2001 02	62.051
2002 03	64.501
2002 03 (Revised)	69.501
2003-04	73.001
2004-05	74.501
2005-06	79.50&
2006-07	80.25&
2007-08	81.18&
2008-09	81.18&
2009 10 (SMP since replaced by F&RP)	129.84@
2010 11	139.12@
2011 12	145.00@
2012-13	170.00@
2013-14	210.00@
2014-15	220.00@
2015-16	230.00@
2016-17	230.00@
2017-18	255.00@
2018-19	275.00#
2019-20	275.00#
2020-21	285.00#
2021-22	290.00#
2022 23	305.00#
2023 24	315.00$
2024 25	340.00$
2025-26	355.00$

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS
AFFECTING THE FINANCIAL POSITION OF
THE COMPANY

During the year, significant changes were introduced to
the ethanol blending program and related policy. The
government reinstated the use of juice/syrup and B-heavy
molasses as permissible feedstock for ethanol production,
which had previously been suspended in December 2023.
However, for the second Ethanol Supply Year (ESY) in a row,
there was no increase in the procurement price for ethanol
produced from these feedstocks in spite of increase in F&RP
with which the procurement price of ethanol is linked,
impacting the economic viability of their use. Additionally,
the government permitted the export of sugar, opening
a window for the export of up to 1 million tonnes. There
have been no material changes or commitments that have
occurred after close of the financial year till the date of this
report, which affect the financial position of the Company
other than those disclosed in this report.

SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURTS
OR TRIBUNALS

No significant & material orders have been passed impacting
the going concern status & Company’s operations in future.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial
controls commensurate with its size, scale and operations.
Such controls have been assessed during the year under
review taking into consideration the essential components
of internal controls stated in the Guidance Note on Audit
of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India.
Based on the results of such assessments carried out by the
management, no reportable or significant deficiencies, no
material weakness in the design or operation of any control
was observed. Nonetheless your Company recognizes
that any internal control framework, no matter how well
designed, has inherent limitations and accordingly, regular
audits and review processes ensure that such systems
are reinforced on an ongoing basis. The internal financial
controls with reference to the Financial Statements are
commensurate with the size and nature of business of
the Company.

DIVIDEND

In accordance with Regulation 43A of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,

2015 (the ‘Listing Regulations’), the Company has adopted
the Dividend Distribution Policy, which details various
parameters subject to consideration of which the Board
may recommend or declare Dividend.

The Dividend Distribution Policy is available on the
Company’s website at https://www.dwarikesh.com/wp-
content/uploads/2023/03/Dividend-Distribution-Policy.
pdf

Your Directors are pleased to recommend a Final Dividend
of H0.50/- per equity share of the face value of H1/- each
(i.e. 50%)fully paid-up for the financial year ended March
31, 2025. The dividend, as recommended above, if
approved at the 31^st Annual General Meeting (‘AGM’) by the
members, would be paid within thirty days from the date
of declaration of dividend to those Members/Beneficial
holders whose names appear in the Register of Members
as on Book Closure date fixed for the said purpose.

The Register of Members and Share Transfer Books of the
Company will remain closed for the purpose of payment
of dividend for the financial year ended 31^st March 2025
and the AGM. Book closure date has been indicated in the
Notice convening AGM.

If the dividend, as recommended above, is declared by
the Members at the ensuing AGM, the total outflow
towards dividend on Equity Shares for the year would be
H9,26,50,735/-.

BUYBACK OF EQUITY SHARES

The Company successfully completed its buyback of equity
shares on 20^th April 2024, pursuant to the Corporate Action
executed by NSDL - Designated Depository. The Board of
Directors in its meeting held on March 8, 2024, approved
the buyback for 30,00,000 equity shares, through the
tender offer route through Stock exchange mechanism.
The buyback was undertaken at a price of H105 per equity
share, aggregating to H31.50 crores (excluding tax and
transaction costs), representing approximately 1.593% of
the current paid-up equity share capital of the Company.

The buyback was offered to all eligible equity shareholders
of the Company. The tendering period commenced on 27^th
March, 2024 and concluded on April 3, 2024. Payment
to shareholders whose shares were accepted under the
buyback was completed on April 12, 2024. These equity
shares were subsequently extinguished, resulting in
reduction of the paid-up share capital of the Company to
18,53,01,470 equity shares of Re. 1 each.

The Buyback was carried out within the permissible limits
of the Board of Director’s authority in accordance with the
applicable provisions of the Companies Act, 2013 and SEBI
(Buy-Back of Securities) Regulations, 2018.

TRANSFER TO GENERAL RESERVE

As permitted under the provisions of the Companies Act,
2013, the Board does not propose to transfer any amount
to general reserve and has decided to retain the entire
amount of profit for the Financial Year 2024-25 in the
profit and loss account.

SHARE CAPITAL

The Authorised Share Capital of the Company is
H54,00,00,000 (Rupees Fifty-Four Crores Only), divided
as follows.

Equity Share Capital:

H22,50,00,000 (Rupees Twenty-Two Crores Fifty Lakhs
Only), consisting of H22,50,00,000 (Rupees Twenty-Two
Crores Fifty Lakhs Only) Equity Shares of Re. 1 (Rupee
One) each.

Preference Share Capital:

H31,50,00,000 (Rupees Thirty-One Crore Fifty Lakhs Only),
consisting of 31,50,000 (Thirty-One Lakhs Fifty Thousand
Only) Preference Shares of H100 (Rupees Hundred) each.

There has been no change in Authorised Capital of the
Company during the year.

Issued, Subscribed and Paid-up share Capital:

The Paid-Up Equity Share Capital as on March 31, 2025,
stood at H18,53,01,470 divided into 18,53,01,470 shares of
Re. 1/- each. During the year under review, 30,00,000 shares
were bought back by the Company. Accordingly, the capital
of the Company has been reduced from 18,83,01,470
Equity Shares to 18,53,01,470 Equity Shares.

During the year under review, the Company has not issued
shares or convertible securities or shares with differential
voting rights, nor has it granted any stock options or sweat
equity or warrants.

COPY OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013,
read with Rule 12 of the Companies (Management and
Administration) Rules, 2014, the Annual Return of the
Company for the financial year ended March 31, 2025, in
Form MGT-7 will be filed with the Registrar of Companies
after the conclusion of the Annual General Meeting and
shall be made available on the website of the Company at:
https://www.dwarikesh.com/annual-return.html

NUMBER OF MEETINGS OF THE BOARD OF
DIRECTORS

The Board of Directors of the Company met four (4) times
during the year on April 30, 2024; July 31, 2024; October
28, 2024; January 27, 2025.

The maximum gap between two Board meetings did not
exceed 120 days. The details of the Board meetings and
the attendance of Directors are provided in the Corporate
Governance Report forming part of the Annual Report.

SUBSIDIARY COMPANY’S REPORT

The Company does not have any subsidiary as defined
under the provisions of the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions entered during the financial
year were in the ordinary course of business and at arm’s
length basis. There were no materially significant Related
Party Transactions with the Company’s Promoters,
Directors, Management or their relatives, which could have
had a potential conflict with the interests of the Company.
Further, prior omnibus approval of the Audit Committee
is obtained on a yearly basis for the transactions which
are of a foreseen and repetitive nature. Transactions with
related parties entered by the Company in the normal
course of business are periodically placed before the Audit
Committee for its approval and the particulars of contracts
entered during the year as required to be provided under
Section 134(3)(h) of the Companies Act, 2013 are disclosed
in Form AOC-2 as Annexure I.

The Board of Directors of the Company on the
recommendation of the Audit Committee amended the
policy on related party transactions at its meeting held
on January 27, 2025 to regulate transactions between
the Company and its Related Parties, in compliance with
the applicable provisions of the Companies Act 2013, the
rules thereunder and the Listing Regulations and placed
at the below mentioned weblink : https://www.dwarikesh.
com/wp-content/uploads/2025/01/Related-Party-
Transactions-Policy-REVISED.pdf

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

The Company has not made any loans or investments or
given guarantees or provided securities under Section 186
of the Act during the year.

PUBLIC DEPOSITS

The Company did not have any fixed deposits at the
beginning of the year nor has it accepted any deposited
during the year in terms of Section 74 of the Companies
Act, 2013.

MSME RETURN

In accordance with the requirements notified by the
Ministry of Corporate Affairs under the MSME Order dated
January 22, 2019, every company obtaining supplies from
micro and small enterprises (MSEs) and whose payments
exceed 45 days must file half-yearly returns in Form
MSME-1.

During the year under review, the Company did not have
any delayed payments to MSEs exceeding the prescribed
period, and therefore, was not required to file Form MSME-1
under Rule 2 of the Companies (Furnishing of Information
about Payment to MSME Suppliers) Order, 2019.

PARTICULARS OF EMPLOYEES AND
RELATED INFORMATION

Pursuant to the provisions of Section 197(12) of the
Companies Act, 2013 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014, a statement containing the requisite
disclosures relating to remuneration of Directors and
employees, including the ratio of remuneration of each
Director to the median employee’s remuneration and other
prescribed details, forms part of this Report and is annexed
as Annexure II.

Disclosures pertaining to names and other particulars of
employees in accordance with Rule 5(2) and 5(3) of the
aforesaid Rules are available for inspection by the Members
at the Registered Office of the Company during business
hours on working days up to the date of the Annual General
Meeting. Any Member interested in obtaining a copy of
such statement may write to the Company Secretary in
this regard.

DIRECTORS AND KEY MANAGERIAL
PERSONNEL

Pursuant to Section 152(6) of the Companies Act,
2013 read with Schedule IV of Article of the Company,c
Mr. Vijay S Banka (DIN: 00963355) Managing Director
retires by rotation and being eligible offers himself for
re-appointment, a resolution seeking shareholder’s
approval for re-appointment forms part of Notice. The
brief details of Mr. Vijay S Banka, who is proposed to be
re-appointed as required under Secretarial Standard
(“SS-2”) and Regulation 36 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, as
amended, (the “Listing Regulations”) is being provided in
the Notice convening the Annual General Meeting (“AGM”)
of the Company

A. Changes in Directors and Key Managerial
Personnel

¦ Based on the recommendation of the Nomination
and Remuneration committee (NRC), the Board of
Directors of the Company at its meeting held on
May 22, 2025, appointed Mr. Arun Kumar Tulsian
(DIN: 10872777) appointed as an Additional
Director in the capacity of Independent Director
of the Company by the Board of Directors with
effect from 22^nd May, 2025 for a term of 5
(Five) consecutive years till May 21, 2030. The
resolution seeking approval of the Members for
regularization of his directorship and appointment
as Non-executive Independent Director have been
included in the Notice convening the 31^st AGM of
the Company

¦ Based on the recommendation of the Nomination
and Remuneration committee (NRC), The Board
of Directors of the Company at its meeting held
on 22^nd May 2025, appointed Mrs. Bharati Balaji
(DIN:07485652) appointed as an Additional
Director in the capacity of Independent Director
of the Company by the Board of Directors
with effect from 1^st June, 2025 for a term of 5
(Five) consecutive years till 31^st May 2030. The
resolution seeking approval of the Members for
regularisation of his directorship and appointment
as Women-Non-executive Independent Director
have been included in the Notice convening 31^st
AGM of the Company

¦ Based on the recommendation of the Nomination
and Remuneration committee (NRC), and Board
of Directors of the Company at its meeting held
on May 22, 2025, has appointed Ms. Priyanka
G Morarka (DIN:00001088) as an Additional
Director designated as Whole Time Director of
the Company w.e.f May 22, 2025 for a term of 5
consecutive years effective from May 22, 2025.
The approval of the Members for regularisation
of her directorship and appointment as Whole
Time Director have been included in the Notice
convening the 31^st AGM of the Company.

¦ Pursuant to the provision of Section 2(51) and 203
of the Act, read with the Companies (Appointment
and Remuneration of Managerial Personnel)Rules,
2014 the Key Managerial Personnel (“KMP”)
of the Company as on March 31, 2025, were:
Mr. Gautam Radheshyam Morarka, Executive

Chairman and Whole Time Director, Mr. Balkishan
J Maheshwari, Managing Director and Company
Secretary cum Chief Compliance Officer, Mr. Vijay
S Banka , Managing Director, Shri Sunil Goel, Chief
Financial Officer

¦ During the financial year 2024-25, there were no
changes to the KMP of the Company.

B. Declaration by an Independent Director(s), Re¬
Appointment & Meeting

Pursuant to the requirements of Section 149(7) of
the Companies Act, 2013, the company has received
declarations from all the independent directors
confirming the fact that they all are meeting the
eligibility criteria as stated in Section 149(6) of the
Companies Act, 2013.

As required under Schedule IV to the Act (Code for
Independent Directors) and Regulation 25 (3) of the
SEBI hold at least 1 (one) meeting in financial year,
without the presence of Non-Independent Directors
and members of the management.

The Independent Directors met once, i.e, on Monday,
January 27, 2025. The Meeting was conducted without
the presence of the Chairman, Executive Directors and
any other Managerial Personnel.

During the year under review, the Non-Executive
Independent Directors of the Company had no
pecuniary relationship or transactions with the
Company, other than sitting fees, commission and
reimbursement of expenses, if any.

None of the Director of the Company are disqualified
from being appointed as Directors as specified
under Section 164(1) and 164(2) of the Act read
with Rule 14(1) of the Companies (Appointment and
Qualifications of Directors) Rules, 2014 (including
any statutory modification(s) and/or re-enactment(s)
thereof for the time being in force) or are debarred or
disqualified by the Securities and Exchange Board of
India (“SEBI”), Ministry of Corporate Affairs (“MCA”) or
any other such statutory authority.

The Independent Directors, inter alia, discussed, and
reviewed performance of Non-Independent Directors,
the Board as a whole, Chairman of the Company, and
assessed the quality, quantity and timeliness of flow of
information between the Companies management and
the Board that is necessary for the Board to perform its
duties effectively and reasonably.

The Company had sought the following certificates
from independent and reputed Practicing Company
Secretaries confirming that:

a. none of the Director on the Board of the Company
has been debarred or disqualified from being
appointed and/or continuing as Directors by the
SEBI/MCA or any other such statutory authority.

b. independence of the Directors of the Company
in terms of the provisions of the Act, read with
Schedule IV and Rules issued thereunder and the
Listing Regulations

C. Formal Annual Evaluation of Directors,
committees, and Board:

Pursuant to the requirements of Section 134(3)(p)
of the Companies Act, 2013 read with Regulation
17 of the SEBI Listing Regulations, the Board has
carried out an annual performance evaluation of its
own performance, the directors individually as well
as the evaluation of the working of its Committees.
The Nomination and Remuneration committee of the
Company (“NRC”) has defined the evaluation criteria,
procedure for the performance evaluation process for
the Board, its committee and Directors.

A structured questionnaire was prepared after taking
into consideration inputs received from the Directors,
covering various aspects of the Board’s functioning such
as adequacy of the composition of the Board and its
Committees, Board culture, execution and performance
of specific duties, obligations and governance Board
development and succession planning.

A separate exercise was carried out to evaluate
the performance of individual Directors including
the Chairman of the Board, who were evaluated
on parameters such as level of engagement and
contribution, independence ofjudgement, safeguarding
the interest of the Company and its minority
shareholders etc. The performance evaluation of the
Independent Directors was carried out by the entire
Board. The performance evaluation of the Chairman
and the Non-Independent Directors were carried out
by the Independent Directors. The Directors expressed
their satisfaction with the evaluation process.

The Company had provided facility of performance
evaluation to Directors through an online platform
for the convenience of the Board members. The Board
and Nomination Remuneration Committee reviewed
the performance of the Board, its committees and of
the Directors. The same was discussed in the Board
Meeting and the feedback received from the Directors
on the performance of the Board and its Committees
was also discussed. The Directors expressed their
satisfaction with the evaluation process.

D. Policy on Directors’ Appointment and
Remuneration Including Criteria for Determining
Qualifications, Positive Attributes, Independence
of a Director, Key Managerial Personnel and
Other Employees

The company have constituted Nomination and
Remuneration Committee (NRC) as required under
Section 178 of the Companies Act, 2013 which
recommends the appointment/ re-appointment of
Directors to the Board. The NRC is responsible to
identify persons who are qualified to become directors
on the Board and to evaluate them on criteria such
as academic qualifications, previous experience,
track record and integrity of the persons identified,
before recommending their appointment to the
Board. The remuneration policy of the company, duly
reviewed and recommended by the Nomination and
Remuneration committee has been articulated in line
with the requirements of the Companies Act, 2013
and placed on below mentioned weblink: https://www.
dwarikesh.com/wp-content/uploads/2023/03/Policy-
on-Directors-Appointment-and-Remuneration.pdf

The company’s remuneration policy is aimed to attract,
retain, reward and motivate talented individuals,
critical for achieving strategic goals and long-term
success. Remuneration policy is aligned to business
strategy, market dynamics, internal characteristics
and complexities within the organization. The ultimate
objective is to provide a fair and transparent structure
that helps the organization to retain and acquire the
talent pool critical in building competitive advantage
and brand equity. The compensation system also
considers factors like roles, skills / competencies,
experience and grade/ seniority to differentiate
pay appropriately on the basis of contribution, skill
and availability of talent on account of competitive
market forces.

The company only pays sitting fees to its Non-Executive
& Independent Directors for attending meetings
of the Board and its Committees. Non-Executive &
Independent Directors are also reimbursed with
expenses incurred by them for attending meetings
of the Board and its Committees at actuals. The
remuneration payable to the Executive Directors is
governed by the provisions of the Companies Act,
2013. The company does not have any subsidiary
and hence holding of directorships by any of the
directors in subsidiary is not applicable. Policy on
Terms of Appointment of Independent Directors is
placed at: https://www.dwarikesh.com/wp-content/
uploads/202 3/03/Terms-of-Appointments-of-
Independent-Directors.pdf

E. Statement Of Director’s Responsibilities

Pursuant to the requirements under Section 134,
sub-section 3(c) and sub-section 5 of the Companies
Act, 2013, the Board of Directors, to the best of their
knowledge and ability, state and confirm that: As
required under the provisions of Section 134(3) of the
Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the
applicable accounting standards had been
followed along with proper explanation relating to
material departures.

b. the directors had selected such accounting
policies and applied them consistently and made
judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the
state of affairs of the company at the end of the
financial year and of the profit of the company for
that year;

c. the directors had taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of this
Act for safeguarding the assets of the company
and for preventing and detecting fraud and
other irregularities.

d. the directors had prepared the annual accounts on
a going concern basis.

e. the directors had laid down internal financial
controls to be followed by the company and that
such internal financial controls are adequate and
were operating effectively,

f. the directors had devised proper systems to ensure
compliance with the provisions of all applicable
laws and that such systems were adequate and
operating effectively.

The aforesaid statement has also been reviewed and
confirmed by the Audit Committee of the Board of
Directors of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS
REPORT

Pursuant to Regulation 34 read with Schedule V of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Management Discussion and
Analysis Report, capturing the Company’s performance,
industry trends, and other material developments relevant
to the Company during the year under review, is presented
as a separate section forming part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Dwarikesh has been an early adopter of CSR initiatives.
The Company works primarily through CSR trust, viz
R. R. Morarka Charitable Trust, towards supporting projects
in eradication of hunger and malnutrition, promoting
education, art and culture, healthcare, destitute care and
rehabilitation, environmental sustainability, disaster relief
and rural development projects.

Company’s CSR initiatives and activities are aligned to
the requirements of Section 135 of the Act read with
Schedule VII. The brief outline of the CSR policy of the
Company and the initiatives undertaken are available
on our website at https://www.dwarikesh.com/wp-
content/ uploads/2024/05/Policy-on-Corporate-Social-
Responsibility.pdf

A Report on Corporate Social Responsibilities (CSR)
including the constitution of the Corporate Social
Responsibility Committee and activities undertaken during
the FY 2024-2025 as per Rule 8 of the Companies (CSR
Policy) Amendment Rules, 2021 is enclosed as Annexure
III to this report.

Further, the Chairman of CSR committee of the Company
has certified that CSR spends of the Company for FY 2024¬
25 have been utilised for the purpose and in the manner
approved by the Board of Directors of the Company.

RISK MANAGEMENT POLICY

As per Regulation 21 of the SEBI Listing Regulations, the
top 1000 listed entities must constitute a Risk Management
Committee. Accordingly, the Risk Management Committee
of the Company constituted on 13^th February, 2015
is responsible for reviewing and mitigating risks on a
periodic basis. A detailed note on Risk Management policy,
elements of risk and its mitigation is included in the
Corporate Governance Report.

The Company recognises that risk is an integral and
inevitable part of business, and it is fully committed to
managing the risks proactively and efficiently. Our success
as an organisation depends on our ability to identify and
leverage the opportunities while managing the risks.
The Company has a disciplined process for continuously
assessing risks, in the internal and external environment
along with minimizing the impact of risks. The Company
incorporates the risk mitigation steps in its strategy and
operating plans.

The Risk Management Policy of the Company is available
on the Company’s website at https://www.dwarikesh.com/
wp-content/uploads/2025/05/Risk-Management-Policy.
pdf

VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy, in
compliance with the provisions of Section 177 of the
Act and Regulation 22 of the Listing Regulations, so as
to enable the Directors, Employees and all Stakeholders
of the Company to report genuine concerns, to provide
for adequate safeguards against victimization of persons
who use such mechanism and make provisions for direct
access to the Chairman of Audit Committee. The details of
the said policy is explained in the Corporate Governance
Report and has been uploaded on the website of the
Company at https://www.dwarikesh.com/wp-content/
uploads/2023/03/Whistle-Blower-Policy.pdf

Disclosure under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013

The Company has a zero tolerance policy towards sexual
harassment at the workplace and has adopted an Anti¬
Sexual Harassment Policy in alignment with the provisions
of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the
rules framed thereunder. The objective of this policy is to
provide protection to employees at the workplace and to
prevent and address complaints of sexual harassment and
any related matters.

An Internal Complaints Committee (ICC) has been
constituted to promptly redress complaints received
regarding sexual harassment. The policy covers all
employees, including permanent, contractual, temporary,
and trainees.

The Company remains committed to fostering a safe,
respectful, and conducive work environment for all its
employees and associates. During the year under review,
no complaints of sexual harassment were received.

CORPORATE GOVERNANCE

The Company is committed to maintaining the highest
standards of Corporate Governance and continues to comply
fully with the requirements prescribed under Regulation
34 and Schedule V (C) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.

A detailed Corporate Governance Report, along with the
requisite certificate from the statutory auditors of the
Company confirming compliance with the conditions of
Corporate Governance as stipulated under the SEBI Listing
Regulations, forms an integral part of this Annual Report
as Annexure IV.

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO

Pursuant to the provisions of Section 134(3)(m) of the
Companies Act, 2013 read with Rule 8 of the Companies
(Accounts) Rules, 2014, the particulars relating to
conservation of energy, technology absorption, and foreign
exchange earnings and outgo are provided in Annexure V
and form an integral part of this Report.

BOARD COMMITTEE

The Company has constituted the following mandatory
Committees in compliance with the requirements of the
Companies Act, 2013 and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015:

Audit Committee

Stakeholders’ Relationship Committee
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
Risk Management Committee

The composition of the above Committees, the terms of
reference, number of meetings held during the financial
year under review, and attendance of members at such
meetings are provided in detail in the Corporate Governance
Report, which forms part of this Annual Report.

The details of the Committees along with their composition,
number of meetings and attendance at the meetings are
provided in the Corporate Governance Report.

AUDITORS

A. STATUTORY AUDITORS & AUDITOR’S REPORT

M/s. Mittal Gupta & Co., Chartered Accountants having
Firm Reg. No. 01874C, Kanpur were appointed as the
Statutory Auditors of the Company at the AGM held
on June 30, 2022 to hold office until the conclusion of
the 33^rd AGM, ratified for the financial year 2025-26.
As required under the provisions of Section 139 of
the Companies Act, 2013, the Company has obtained
written confirmation from M/s. Mittal Gupta & Co.,
that their appointment is made in conformity with the
limits specified in the said Section.

The Auditors’ Report for the financial year ending
March 31, 2025 is unmodified, i.e, it does not contain
any qualification, reservation, adverse remark or
disclaimer. The Statutory Auditors have not reported
any incident of fraud to the Audit Committee of the
Company during the financial year under review

B. COST AUDITORS

Pursuant to the provisions of Section 148 of the
Companies Act, 2013 read with the applicable rules
made thereunder, the Board of Directors, on the
recommendation of the Audit Committee, has re¬
appointed M/s. Ramanath Iyer & Co., Cost Accountants
(Firm Registration No. 000019) as the Cost Auditors of
the Company to conduct the audit of the cost records
maintained by the Company in respect of its sugar,
electricity and industrial alcohol businesses for the
financial year ending March 31, 2026.

In accordance with Rule 14 of the Companies (Audit
and Auditors) Rules, 2014, the remuneration payable
to the Cost Auditors is required to be ratified by
the shareholders of the Company. Accordingly, an
Ordinary Resolution seeking such ratification is
included as Item No. 9 in the Notice of the ensuing
Annual General Meeting.

M/s. Ramanath Iyer & Co. have confirmed that their
appointment is within the limits prescribed under
Section 141(3)(g) of the Companies Act, 2013, and
that they are not disqualified from being appointed as
Cost Auditors under Section 141(3), Section 141(4),
and the proviso to Section 148(3) of the said Act.

The Cost Audit Report for the financial year ended
March 31, 2025 does not contain any qualification,
reservation, adverse remark or disclaimer. The said
report shall be filed by the Cost Auditors with the
Central Government on or before September 30, 2025,
in accordance with the prescribed timeline.

C. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the
Companies Act, 2013 and the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, the Company had appointed M/s. VKM
& Associates, a Practicing Company Secretary
(Certificate of Practice no. 4279), Secretarial Auditor
to undertake the Secretarial Audit of the Company
for the year ended March 31, 2025. The Form MR-3
Secretarial Audit Report is appended to this Report as
Annexure VI.

The Secretarial Audit Report and Secretarial
Compliance Report for the financial year 2024-25
, does not contain any qualification, reservation or
adverse remark or disclaimer.

Pursuant to the provisions of Regulation 24A of
Securities and Exchange Board of India (Listing

Obligations and Disclosure Requirements) (Third
Amendment) Regulations, 2024, every listed
entity must ensure they follow the rules for the
appointment, reappointment, and continuation of
the Secretarial Auditor. Accordingly, in compliance of
the said amendment, your Directors have proposed
appointment of M/s VKM & Associates, Practicing
Company Secretaries (FCS No. F-5023 & COP
No.4279), Practicing Company Secretaries Mumbai,
as Secretarial Auditor of the Company to hold the
office from the conclusion of the 31^st Annual General
Meeting (AGM) till the conclusion of 36^th AGM of the
company at the remuneration to be fixed by the Board
of Directors of the company. The Company has obtained
Peer Review, Consent and Eligibility Certificate from
the Secretarial Auditor.

BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT

Pursuant to SEBI Circular dated May 10, 2021, submission
of the Business Responsibility and Sustainability Report
(BRSR) has been made mandatory for the top 1,000 listed
companies (by market capitalization) with effect from
financial year 2023-24.

Your Company firmly believes that its responsibilities
extend beyond financial performance to encompass
environmental stewardship, social impact, and ethical
governance. We are accountable not only to our
shareholders, but also to a broader stakeholder community
including employees, customers, suppliers, regulators, and
society at large.

In line with this commitment and to ensure accurate,
meaningful, and transparent reporting, the Company
has engaged an external professional agency,
PricewaterhouseCoopers (PwC), for the preparation and
validation of its BRSR disclosures for FY 2024-25.

The BRSR forms an integral part of this Annual Report
and has been prepared in accordance with Regulation
34(2)(f) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. The report is annexed
to this Annual Report as Annexure VII.

The BRSR outlines the Company’s performance against the
nine principles of the National Guidelines on Responsible
Business Conduct (NGRBC) issued by the Ministry of
Corporate Affairs. It reflects DSIL’s approach and initiatives
towards responsible business practices encompassing
environmental, social, and governance (ESG) parameters..

ACKNOWLEDGEMENT

The Board of Directors expresses its sincere appreciation
and gratitude to all stakeholders for their continued support
and confidence in the Company. The Directors extend their
heartfelt thanks to the esteemed members, sugarcane
growers, employees, bankers, financial institutions, and
business associates for their valuable contributions to the
sustained growth and success of the Company.

The Board also places on record its deep appreciation
for the guidance, cooperation, and support received from
various departments and agencies of the Central and State
Governments and regulatory authorities.

The Directors acknowledge and appreciate the dedication,
commitment, and hard work of all employees at every
level, which continues to be the cornerstone of the
Company’s progress.

On behalf of the Board of Directors
Dwarikesh Sugar Industries Limited

B J Maheshwari Vijay S Banka

Place: Mumbai Managing Director & CS cum CCO Managing Director

Date: May 22, 2025 (DIN: 00002075) (DIN: 00963355)

1

Linked to recovery of 8.50%

& Linked to recovery of 9.00%

@ Linked to recovery of 9.50%

# Linked to recovery of 10.00%

$ Linked to recovery of 10.25%

C. All sugar mills in Uttar Pradesh are mandated to pay the State Administered Price (SAP) for sugarcane. For the 2024-25
crushing season, the Government of Uttar Pradesh maintained the SAP at the same level as the previous season (SS
2023-24), with no increase announced. The early variety of sugarcane—which accounts for over 90% of the total cane
supplied by farmers—is being paid at H370 per quintal, delivered at the factory gate.

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Mar 31, 2024

The Directors are pleased to present their 30^th (Thirtieth) Annual Report along with the Audited Financial Statements for the year ended on March 31, 2024.

FINANCIAL RESULTS		(Rs. in Lakhs)
Particulars	Year Ended 31.03.2024	Year Ended 31.03.2023
Gross profit before depreciation, interest & tax	21,661.76	22,856.96
Less: Depreciation	5,250.23	5,021.64
Finance Costs	2,012.93	2,584.74
Profit / (Loss) before tax and exceptional items	14,398.60	15,250.58
Profit / (Loss) before tax	14,398.60	15,250.58
Tax expenses	6,046.86	4,776.02
Profit /(Loss) after tax	8,351.74	10.474.56
Total comprehensive income / (loss)	8,260.08	10,410.21

YEAR IN RETROSPECT

Operations : Distinguishing features of the crushing operations in your company are given in the following paragraphs : Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given hereunder :

Sugarcane crushed and sugar produced across three units (FY 2023-24)

Particulars	2023-24	2022-23	Change
Crushing (Lakh Quintal)	366.59	382.13	(4.07%)
Recovery % (Gross - adjusted)	11.63	11.83	(1.69%)
Recovery % (Net)	9.55	8.63	10.66%
Production (Lakh Quintal)	35.22	32.98	6.79%

Sugarcane crushed and sugar produced across three units (FY 2023-24)

Particulars	2023-24	2022-23
Crushing (lakh quintal)	268.08	302.71
Recovery % (Gross - adjusted)	11.56	11.62
Recovery % (Net)	9.79	8.00
Production (lakh quintal)	26.25	24.02

The figures presented for SS 2023-24 encompass the entire season, as all units concluded operations before March 31, 2024. The early cessation of the season at all three units led to a decrease in crushing activities. In contrast, for SS 2022-23, the figures represent only a portion of the season due to its spill-over beyond March 31, 2023.

During SS 2023-24 while crushing culminated on March 11, 2024 at the DD unit, it concluded on the March 23, 2024 at the DP unit, and on March 30, 2024 at DN unit.

HIGHLIGHTS FY 2023-24 ^ Sugarcane crushing declined by 4.07% y-o-y.

^ Our net recovery for the fiscal year stood at 9.55%, exhibiting an increase compared to the previous fiscal year’s net recovery of 8.63%. This represents an improvement of 10.66%. The enhanced net recovery can be attributed to the cessation of diverting juice/syrup for ethanol production following the Central Government order. Additionally, restrictions on the supply of ethanol from B heavy molasses led to the generation of C heavy molasses at our DP unit to fulfil country liquor obligations. These factors collectively contributed to the higher net recovery achieved during the fiscal year.

^ Gross-Adjusted Recovery: Despite the improvement in net recovery, our gross-adjusted recovery decreased to 11.63% from 11.83% in the previous fiscal year. This decline is primarily attributable to the extended crushing operations of SS 2022-23 into the hot and humid months of May and June 2023 at our DN and DP plants. Furthermore, the early conclusion of SS 2023-24 across all units resulted in missing out on crushing operations during the period when recovery is typically at its peak. Lower gross - adjusted recovery is also attributable to inclement weather conditions, excessive rainfall & resultant water-logging in fields over prolonged period and devastation caused by red rot in the command area of all units

^ Higher sugar production is also on account of factors mentioned herein above and notwithstanding the lower gross - adjusted recovery. During FY 2023-24 sugar production of 7.62 lakh quintals was sacrificed on account of diversion of sugarcane juice for ethanol and on account of generation of B heavy molasses. This was as against sugar sacrifice of 12.23 lakh quintals on account diversion of sugarcane juice for ethanol and generation of B heavy molasses during FY 2022-23.

Performance of cogeneration division: Metrics of power sold :

Unit	FY 2023-24		FY 2022-23
	Power Sold in Lakhs Units	Amount in Rs. Lakhs	Power Sold in Lakhs Units	Amount in Rs. Lakhs
DN	143.69	489	258.94	844
DP	641.06	2,216	578.60	1,918
DD	595.41	2,043	632.50	2,099
Total	1,380.16	4,748	1,470.04	4,861

Performance of distillery : During the financial year, 992.31 lakh litres of industrial alcohol (previous FY 849.61 lakh litres) was produced and 944.07 lakh litres (previous year 841.75 lakh litres) of industrial alcohol was sold. A revenue of Rs. 589.11 crores (previous year Rs. 535.50 crores) was generated which included, Rs. 5.56 crores from sale of by-products (Previous year Rs. 4.17 crores).

Global sugar industry scenario & outlook

^ According to S&P Global’s latest report, the projected surplus for the 2023-24 sugar season is a substantial 6.01 million metric tons, the highest since the 2017-18 season. This surplus is attributed to increased production levels and decreased consumption. Brazil has played a significant role in this surplus, with factors such as favourable weather conditions, higher sugar mix in crops, and increased crystallization capacity contributing to elevated production levels. The 2023-24 sugarcane crop in Brazil is highlighted as a year of record-breaking achievements, with production increasing by almost 10 million tons. This substantial increase in production prevented a sugar shortage worldwide and allowed India to step back from the exporter arena without significant disruption. With Brazil’s increased contribution, the global production outlook for the year is adjusted to 195 million tons, with Brazil poised to achieve a record-breaking sugar production of over 42 million tons. Despite the promising production forecast, logistical challenges in Brazil are noted to impede trade flows from the country, which provides support to global sugar prices.

^ While S&P Global predicts a surplus, the International Sugar Organization (ISO) provided a different perspective in its February report, estimating a small deficit for the same season. However, going forward, ISO may revise its production number, upwards

^ While the conditions for poor crops in the Northern Hemisphere appear to be repeating in 2024/25, the situation in Brazil CS presents a stark contrast with the previous crop year. Compared to last year, when December/January/February rains were approximately 25% above average, this year they are about 30% lower during the same period. This significant difference in rainfall might lead to a major shift of the cane yield for Brazil. The tightness is expected during the 2024/25 crop, leading to an inadequate supply. Production estimate from India also indicates tightness.

^ Presently, raw sugar is quoted at around 22 cents per pound, and whites are traded at approximately USS 650 per metric ton, reflecting non-pessimistic sentiment in the market.

^ The global sugar market is currently navigating a complex landscape influenced by various factors, including surplus during SS 2023/24 and potential lower production during 2024/25 due to adverse weather conditions. However, the challenges extend beyond the realm of sugar production alone. Geopolitical events, such as the ongoing Russia-Ukraine conflict and the recent escalation in tensions between Israel and Hamas, have the capacity to trigger a surge in crude oil prices. This increase in oil prices, in turn, can have a cascading effect on the economics of global sugar production and trade. The interconnectedness makes the sugar trade dynamics uncertain.

^ Sugar production estimate from India remain pegged at 32 million tons. Tail end production in Maharashtra & Karnataka progressed at stronger than expected pace while the production Uttar Pradesh is talked at being lower. In Thailand sugar harvest & production is in line with estimates with sugar output expected at 8.66 million tons.

The Indian sugar industry - fresh challenges

> The Sugar Season (SS) for 2022-23 concluded with a total production of 32.8 million tons. Around 4 million tons were diverted towards ethanol production. The season ended with a closing stock of approximately 6 million tons, providing a consumption buffer of around three months.

^ The Sugar Season (SS) for 2023-24 began with an initial estimate

of sugar production at 32 million tons, with over 4 million tons allocated for ethanol production. However, the rapid onset of the El Nino phenomenon had significant effects, particularly in Maharashtra and Karnataka, indicating that actual production would be considerably lower than initial estimates.

^ Production estimates in the sugar industry have been volatile, resembling a rollercoaster ride. According to the latest projections from ISMA, India is expected to reach a sugar production figure of 32 million tons, accounting for approximately 2 million tons diverted for ethanol production. Maharashtra has seen an impressive rebound in production estimates, reaching 10.9 million tons. Conversely, Uttar Pradesh is anticipated to experience a decline in production, with estimates now at 10.5 million tons, notably lower than earlier projections. Karnataka is expected to produce around 5 million tons of sugar, showcasing the prowess of these states in the Indian sugar sector.

^ Ahead of the SS 2023-24, the sugar industry experienced a notable increase in sugar prices due to anticipated production declines nationwide. In response, the government took measures to address the situation, including issuing orders to cease the use of cane juice for ethanol production. Simultaneously the Government also banned export of sugar.

^ Additionally, limitations were imposed on the quantity of ethanol produced using B heavy molasses, with sugar mills and distilleries directed to maintain the original quantity offered to Oil Marketing Companies (OMCs). However, there was an increase in the price of ethanol derived from C heavy molasses, alongside a similar adjustment for ethanol produced from grains. This strategic manoeuvre aimed to restrict the sacrifice of sugar production to less than 2 million tons while simultaneously boosting overall sugar production.

^ Government policies and incentives are crucial in motivating the sugar industry to divert its production towards ethanol. During the Ethanol Supply Year (ESY) 2022-23, buoyed by supportive policies, the industry achieved significant success in this regard. Despite encountering obstacles and challenges,

the blending target of close to 12% was successfully achieved. However, due to government-imposed restrictions, the ethanol blending program has been paused, limiting sugar sacrifice to only around 2 million tons.

^ As production estimates have become clearer, it is now projected that sugar production will reach around 32 million tons, reflecting an increase of nearly 3 million tons compared to the opening stock of 6 million tons. Consequently, the estimated closing stock is expected to reach about 9 million tons, equivalent to approximately 4 months of consumption. Government in a recent move has allowed further use of available B heavy stock of 6.7 lakh tons for production of ethanol. However, with the sugar season (SS) 2023-24 nearing closure, restarting the ethanol blending program with sugarcane juice or B heavy molasses as feedstock is challenging. This therefore presents a challenge in effectively utilizing the excess sugar stock to alleviate the market imbalance.

^ The Indian Sugar & Bio-energy Manufacturers Association (ISMA) has also formally requested the Government to consider a price hike for ethanol derived from sugar cane juice/syrup and B heavy molasses as feedstock.

^ Following the Government’s imposition of restrictions on ethanol blending, which curtailed sugar sacrifice and facilitated heightened production, sugar prices, once approaching Rs. 4000 per quintal, have now moderated around Rs. 3800 per quintal. Additionally, the anticipated sugar production of around 32 million tons has also influenced this moderation in sugar prices. The ban on exports has also played a role in moderating sugar prices.

^ In a regressive move, the Government has implemented a mandatory requirement for sugar mills to utilize a minimum of 20% of the sugar produced during the SS 2023-24 in jute bags. While this directive poses challenges due to the limited availability of jute bags, it also has the potential to escalate the cost of sugar production by Rs. 24 per quintal. This decision represents a trade-off between supporting the jute industry and potentially impacting the sugar industry.

> As of March 31, 2024, Oil Marketing Companies (OMCs) have procured a total of 224.46 crore litres out of the total requirement of 825 crore litres for the Ethanol Supply Year (ESY) 2023-24, which spans from November to October. Within this procurement, the sugar sector contributed 126.25 crore litres, while the grain sector contributed the remaining 98.21 crore litres. The achieved blending percentage as of March 31, 2024, stands at 11.96%.

^ Specifically, the sugar sector has supplied 56% of the total supplied quantity, whereas the grain sector has supplied 44% of the total supplied quantity as of March 31, 2024. Contracts for 320.36 crore litres have been executed by the OMCs until March 31, 2024.

^ Out of the total ethanol supply of 120.71 crore litres from the sugar sector, 50.76 crore litres have been sourced from sugarcane juice, while 61.24 crore litres have been sourced from B-Heavy Molasses. This represents an estimated diversion of approximately 12.51 lakh tons of sugar from conventional production to ethanol production.

^ The sugar industry is regulated globally, and India is no exception. The Central Government continues to play a significant role in regulating various aspects of the industry. One key area of regulation is the minimum selling price of sugar, which is fixed at Rs. 3,100 per quintal, although the industry has been advocating for an upward revision.

^ Additionally, the Central Government operates a monthly release mechanism to ensure adequate and affordable sugar availability in the open market. This mechanism helps regulate the flow of sugar into the market to maintain stability.

^ Furthermore, the Central Government announces timely sugar export quotas to enhance sectoral liquidity and ensure better domestic realizations. However presently Central Government has banned sugar exports.

^ Moreover, the Central Government determines the annual Fixed & Remunerative price (F&RP), which is the minimum price that sugar mills must pay for the sugarcane they procure. Some States go a step further and announce a State Administered Price (SAP) that is higher than the F&RP, providing additional support to sugarcane farmers.

^ The Central Government also plays a crucial role in determining the ethanol procurement price for Oil Marketing Companies (OMCs). During the Ethanol Supply Year (ESY) 2023-24, there was an unconventional approach where no increase was given in the ethanol procurement price for ethanol made from B heavy molasses and cane juice as feedstock. This decision aimed to moderate sugar prices while bolstering sugar production.

^ Breaking away from convention, no increase in price was awarded in respect of ethanol made from B heavy molasses and sugarcane juice / syrup. Ethanol made from B heavy molasses continued to be procured at Rs. 60.73 per litre, while ethanol made from sugarcane juice remained unchanged at Rs. 65.61 per litre. Notably, ethanol from C heavy molasses has seen a significant increase of Rs. 6.87 per litre and is now priced at Rs. 56.28 per litre. Moreover, there has been a noteworthy increase for ethanol made from maize, now priced at Rs. 71.86 per litre, indicating a deliberate move to stimulate ethanol production from grains, particularly maize.

The Uttar Pradesh Sugar Industry

> During the Sugar Season (SS) 2022-23, Uttar Pradesh (U.P.) State produced 10.5 million tons of sugar. It is estimated that during SS 2023-24, the sugar industry in U.P. is likely to produce around the same quantity of sugar, taking into account a significantly lesser quantity of sugar diversion in favour of ethanol. This indicates a drop in gross sugar production.

^ Projections indicate a nuanced picture of sugar production across different regions of Uttar Pradesh (U.P.). Anticipations suggest a rise in sugar production in Eastern Uttar Pradesh, while in Central U.P., sugar production is expected to remain relatively flat. However, in Western U.P., a decline in sugar production is projected. Bijnor district, which is in the periphery of both Central & Western U.P., stands out as one of the most severely impacted areas, experiencing notable declines in sugar production ranging between 20% to 40%. This significant decrease underscores the acute challenges faced by farmers and the sugar industry in the district.

^ Moreover, red rot infestation, which was previously rampant in central U.P. and Eastern U.P., has now spread to West U.P. This has caused unprecedented damage to the crop. Incessant rainfall during August & September has further compounded problems for sugar mills in West U.P., even as they intensify efforts to replace the Co 0238 variety, which is now facing existential fatigue.

^ The Uttar Pradesh State Government has unveiled its molasses policy for the molasses year 2023-24, introducing an elevated levy obligation. Sugar mills are now mandated to allocate 26% of their molasses generation for country liquor purposes in the case of C heavy molasses, and 19% for B heavy molasses. Despite the onerous obligation, this is seen as a positive development as the government has equalized the treatment of B and C heavy molasses, acknowledging the crucial distinction in their respective ethanol output.

^ Furthermore, the State Government has declared the State Advised Price (SAP) for the sugar season 2023-24, with an increase of Rs. 20 per quintal. The society commission rate remains at Rs. 5.50 per quintal. Additionally, the transportation rebate has been revised to Rs. 9 per quintal, up from the previous Rs. 8.35 per quintal. The slab rate within the transport rebate has also been adjusted to Rs. 0.45 per quintal per KM from the earlier Rs. 0.42 per quintal per KM.

^ With the low base of sugar production during the sugar season (SS) 2023-24, the outlook for SS 2024-25 should be promising, barring any adverse weather conditions. The challenges faced

during the previous season, including lower yields due to red-rot infestation, have served as wake-up calls for farmers. Consequently, they are now redoubling their efforts to safeguard not only the ratoon crop but are also putting concerted effort

into replacing the susceptible Co 0238 variety with more resilient alternatives.

^ Cane price payments by sugar mills were generally prompt, and arrears were within manageable levels.

Dwarikesh - Financial Scorecard :
Particulars	2023-24		2022-23
	(Rs. lakh)	(%)	(Rs. lakh)	(%)
Revenue from operations	1,70,957	100.00	2,10,296	100.00
EBITDA	21,662	12.67	22,857	10.87
EBDTA	19,649	11.49	20,272	9.64
EBT	14,399	8.42	15,251	7.25
EAT	8,352	4.89	10,481	4.98

^ The revenue from operations for FY 2023-24 witnessed a decline of nearly 19% compared to the previous fiscal year, primarily attributed to several factors. Firstly, there was a notable decrease in revenue due to fewer releases under the monthly release mechanism governed by the Central Government. Additionally, the ban on sugar exports further impacted revenue streams, especially considering that in the preceding fiscal year, your company successfully exported 10 lakh quintals of sugar. This fiscal year lacked similar export opportunities, contributing to the revenue decline. Moreover, while revenue from distillery operations experienced an increase, it did not fully offset the overall revenue decline. Despite capacity expansions, the government’s embargo on using juice for ethanol production & limiting use of B heavy molasses constrained the potential revenue growth from this segment.

> The EBIDTA for FY 2023-24 stands at Rs.21,662 lakhs, reflecting a decrease compared to the previous fiscal year’s EBIDTA of Rs. 22,857 lakhs, marking a decline of 5.23%. This reduction in EBIDTA can be attributed to various factors. Firstly, there was an increase in the cost of goods sold, primarily due to the rise in sugarcane prices announced by the State Government. This hike in input costs directly impacted profitability. Furthermore, the suboptimal utilization of sugar plants due to insufficient availability of sugarcane also contributed to the lower EBIDTA. This resulted in underutilized capacity and increased per-unit production costs, thereby affecting profitability. Additionally, adverse regulatory changes in the distillery segment further exacerbated the decline in EBIDTA. However, in % terms the EBIDTA is higher at 12.67% as against 10.87% last FY. The enhanced EBITDA % was bolstered by better realization of sugar sales and increased sales of ethanol produced from B heavy molasses, which is a more remunerative feedstock.

> The earnings before tax for FY 2023-24 amount to Rs. 14,399 lakhs, in contrast to the previous fiscal year’s figure of Rs. 15,251 lakhs. This represents a decrease in earnings before tax, despite a notable reduction in finance costs.

^ Earnings after tax is at Rs.8,352 lakhs, as compared to the earnings after tax of previous FY of Rs. 10,481 lakhs due to higher provisioning of taxes. Earnings after tax for the year is nearly 20% less than earnings after tax of the previous year.

Salient features :

^ During the sugar season (SS) 2022-23, our company crushed 4.01 crore quintals of sugarcane, achieving a gross recovery rate of 11.93%. However, the beginning of crushing for SS 2023-24 at our DN & DP units on October 31, 2023, and at the DD unit on November 5, 2023, was met with unforeseen challenges.

^ The Bijnor district, where 2 of our 3 units are located, experienced untimely and persistent rainfall, exacerbating the impact of a widespread red-rot attack. These adverse conditions severely affected sugarcane availability, resulting in the most dismal crushing numbers we’ve seen in recent times. In total, our company managed to crush only 268 lakh quintals of sugarcane. Due to the challenging circumstances, our DD plant had to cease operations earlier than anticipated, closing on March 11, 2024. Subsequently, crushing operations at the DP plant concluded on March 23, 2024, followed by the DN plant on March 30, 2024

^ The area under the DD command area has witnessed a significant

reduction of nearly 4000 hectares due to the pervasive red-rot infection. In response to this crisis, extensive initiatives have been launched to safeguard the ratoon crop and implement varietal replacement measures. However, despite these concerted initiatives, the crushing decline in the unit reached a staggering 19%. However, transformations are anticipated in the forthcoming seasons, both in terms of improved crushing figures and a more diversified varietal mix

^ In addition to grappling with the challenges posed by red-rot disease and unseasonal rainfall, our DN and DP units faced setbacks stemming from increased prices offered by Jaggery and Khandsari manufacturers for sugarcane. This resulted in a notable outward diversion of sugarcane, as farmers opted to sell their produce to these alternative buyers rather than the sugar

mills. Furthermore, the establishment of a new sugar mill in the region exacerbated the situation, leading to the partial cession of sugarcane area from our units in favor of other sugar mills in the district. This reallocation of resources further strained our operations and exacerbated the decline in crushing numbers. As a result of these combined factors, our DP unit experienced a steep decline of 39% in crushing, while the DN unit saw a decline of over 36%. These significant declines underscore the urgency of addressing the multifaceted challenges facing our operations

^ Furthermore, the revised ethanol policy by the Central Government has altered the dynamics of molasses generation and ethanol production. The utilization of sugarcane juice for ethanol production has been discontinued, restricting the process to B heavy molasses. Additionally, C heavy molasses is now generated at the DP unit to fulfill the country liquor obligation. All these factors will result in lower ethanol output. Off-take & decanting of ethanol at depots of OMCs’ resulted in sluggish sales of ethanol

^ Your company enjoys long term rating of (ICRA)AA-(pronounced as AA minus). The outlook assigned is ''stable’. Your company also retained the highest rating of A1 also from ICRA for its CP program of H 300 crores. The company enjoys the highest internal rating of A1 accorded by PNB.

^ Your Company continued to pay for sugarcane ahead of schedule. As on date, your Company had cleared payments in entirety in respect of cane purchased during SS 2023-24.

^ The fiscal year under review was marked by underutilization of capacities, observed across both our sugar and distillery units. This underutilization at sugar units stemmed from the reduced availability of sugarcane. Our distillery units experienced

underutilization due to the temporary halt in the ethanol blending program mandated by the Central Government.

^ Long term debt profile: Out of soft loan of Rs. 134.48 crores availed under SEFASU 2018, funded by the State Government, balance on 31/3/2024 is Rs. 6.72 crores and out of distillery term loan availed of Rs. 116.88 crores for DN distillery unit, balance on the same date is Rs. 40.91 crores and in case of term loan of Rs. 185.60 crores sanctioned for 175 KLPD distillery plant at DD unit balance on date is Rs. 167.04 crores. All term loans availed by the Company were mobilized at subsidized rate of interest.

^ Your Company is constantly exploring possibilities of revenue optimization, cost rationalization and profit enhancement. Your Company is respected for competent management.

^ The crushing season of 2023-24 was characterized by a reduced availability of sugarcane, primarily attributed to adverse weather conditions. Unseasonal and heavy rainfall led to waterlogging in sugar fields, resulting in the stunted growth of sugarcane. Additionally, the widespread occurrence of red-rot disease across all units further exacerbated the cane scarcity. Notably, DN and DP units, previously unaffected by red-rot, also experienced its detrimental effects, adding to the overall cane shortage.

^ To address these challenges, the company implemented strategic measures to mitigate crop damage and sustain the healthy growth of Co 0238, the predominant variety. Intensified ratoon management practices were adopted to moderate the impact of adverse conditions. Furthermore, proactive steps were taken to introduce new early maturing varieties such as 15023, 14201, and 118, aimed at enhancing resilience and ensuring consistent yields. In low-lying areas, varieties 94184 and 98014 are being promoted. Barring unforeseen weather condition the crushing numbers should witness smart recovery in SS 2024-25.

CANE & SUGAR POLICY

The main policies of the government in relation to the sugar industry during the year were :

a. The Fair & Remunerative Price (FRP) until SS 2017-18 was linked to a recovery of 9.50%. Effective SS 2018-19, FRP has been linked to a recovery of 10%. While the FRP for SS 2021-22 was Rs. 290 per quintal for SS 2022-23 the same stands increased to Rs. 305 per quintal again linked to a recovery of 10.25%.

b. Chronology of SMP/FRP announced by the Central Government on the basis of recovery is given herein under:

Season	SMP/F&RP H/ Quintal
2000-01(SMP)	59.50*
2001-02	62.05*
2002-03	64.50*
2002-03 (Revised)	69.50*
2003-04	73.00*
2004-05	74.50*
2005-06	79.50&
2006-07	80.25&
2007-08	81.18&

Season	SMP/F&RP H/ Quintal
2008-09	81.18&
2009-10 (SMP since replaced by F&RP)	129.84@
2010-11	139.12@
2011-12	145.00@
2012-13	170.00@
2013-14	210.00@
2014-15	220.00@
2015-16	230.00@
2016-17	230.00@
2017-18	255.00@
2018-19	275.00#
2019-20	275.00#
2020-21	285.00#
2021-22	290.00#
2022-23	305.00#
2023-24	315.00$
2024-25	340.00$

* Linked to recovery of 8.50% & Linked to recovery of 9.00% @ Linked to recovery of 9.50%

# Linked to recovery of 10.00% $ Linked to recovery of 10.25%

c. All sugar mills in Uttar Pradesh are required to pay State Administered Price (SAP). For 4 successive crushing seasons up to the crushing season 2021-22, the State Government of Uttar Pradesh announced SAP, which increased to @ Rs 340 per quintal for general variety of Sugarcane, Rs. 350 per quintal for early variety of sugarcane & Rs 335 per quintal for rejected variety of sugarcane. For crushing season 2022-23, State Government of Uttar Pradesh has announced increase of Rs. 25 per quintal across all varieties.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

During the year, a significant change occurred in the ethanol blending program and policy. The government made the decision to pause ethanol blending in respect of ethanol derived from sugarcane juice/ syrup and imposed quantitative restrictions on ethanol made from B heavy molasses. These measures were implemented to bolster sugar production and prevent any sharp increase in sugar prices.

Sugar companies had invested substantial amounts to build distillery capacities. However, the government’s actions have led to these capacities being grossly underutilized. It is anticipated that this move is temporary, and the ethanol blending program aimed at moderating sugar production will resume in due course. Continued suspension of the program will prolong the underutilization of distillery capacities.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

No significant & material orders have been passed impacting the going concern status & Company’s operations in future.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls commensurate with its size, scale and operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the management, no reportable or significant deficiencies, no material weakness in the design or operation of any control was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are re-enforced on an ongoing basis. The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

DIVIDEND

Your Directors’ have not recommended any payment of equity dividend for the FY 2023-24.

BUYBACK OF EQUITY SHARES

The Board of Directors in their meeting held on March 8, 2024 approved a buyback program for 30,00,000 equity shares, which represents approximately 1.593% of the current paid-up equity share capital. The buyback price was set at Rs 105 per equity share, reflecting a premium of 34.81% over the closing share market price just prior to the announcement. This buyback will involve a total expenditure of Rs 31.50 crores, equivalent to 4.49% of the paid-up capital and free reserves, including the Share Premium Account. Additionally, the Company incurred expenses of approximately Rs 716.35 lakhs for buyback tax and approximately Rs 69.75 lakhs for various fees such as those for merchant bankers, secretarial counsel, auditors, RTA, SEBI, advertisement charges, and other miscellaneous expenses. This buyback falls within the permissible limits of the Board of Directors’ authority.

Buyback initiative serves to efficiently allocate surplus funds to shareholders while bolstering key financial metrics for the company. By repurchasing its own shares, the company can enhance its return on equity, earnings per share, return on net worth, and return on capital employed.

TRANSFER TO GENERAL RESERVE

As permitted under the provisions of the Companies Act, 2013, the Board does not propose to transfer any amount to general reserve and has decided to retain the entire amount of profit for the Financial Year 2023-24 in the profit and loss account.

SHARE CAPITAL

The paid-up Equity Share Capital as at March 31, 2024 stood at Rs. 18.83 crores. During the year under review, the Company has not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity or warrants.

COPY OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, copy of the Annual Returns of the Company in form MGT-7 is placed on the website of the Company and is accessible at the web-link: https:// www.dwarikesh.com/wp-content/uploads/2024/05/FORM-MGT-7-2023-24.pdf

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company met five (5) times during the year on April 27, 2023; July 24, 2023; October 27, 2023; January 30, 2024 and March 08, 2024.

SUBSIDIARY COMPANY’S REPORT

The Company does not have any subsidiary in terms of provisions of Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions entered during the financial year were in the ordinary course of business and at arm’s length basis. There were no materially significant Related Party Transactions with the Company’s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as required to be provided under Section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure I.

The Board of Directors of the Company on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules thereunder and the Listing Regulations and placed at the below mentioned weblink : https://www.dwarikesh.com/wp-content/ uploads/2023/03/Related-Party-Transactions-Policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any loans or investments or given guarantees or provided securities under Section 186 of the Act during the year.

PUBLIC DEPOSITS

The Company did not have any fixed deposits at the beginning of the year nor has it accepted any deposited during the year in terms of Section 74 of the Companies Act, 2013.

MSME RETURN

MCA vide order dated 22^nd January, 2019 directed all companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days during the year. The Company is not required to file MSME Return as all payments have been done within prescribed time.

PARTICULARS OF EMPLOYEES AND RELATED INFORMATION

In terms of the provision of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above rules are provided in Annexure II.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Changes in Directors and Key Managerial Personnel

Du ring the year, there is no change in Directors and Key Managerial Personnel

B. Declaration by an Independent Director(s), ReAppointment & Meeting

Pursuant to the requirements of Section 149(7) of the Companies Act, 2013, the company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in Section 149(6) of the Companies Act, 2013.

As required under Schedule IV to the Act(Code for Independent Directors) and Regulation 25 (3) of the SEBI hold at least 1 (one) meeting in a year, without the presence of Non-Independent Directors.

The Independent Directors met once, i.e, on Monday, January 30, 2023. The Meeting was conducted without the presence of the Chairman, Executive Directors and any other Managerial Personnel.

The Independent Directors, inter alia, discussed, and reviewed performance of Non-Independent Directors, the Board as a whole, Chairman of the Company, and assessed the quality, quantity and timeliness of flow of information between the Companies management and the Board that is necessary for the Board to perform its duties effectively and reasonably.

C. Formal Annual Evaluation

Pursuant to the requirements of Section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of the SEBI Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of its Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation

of the Chairman and the Non-Independent Directors were carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

D. Policy On Directors’ Appointment And Remuneration Including Criteria For Determining Qualifications, Positive Attributes, Independence Of A Director, Key Managerial Personnel And Other Employees

In line with the principles of transparency and consistency, your Company has adopted the following policies which, inter alia includes criteria for determining qualifications, positive attributes and independence of a Director.

The policy of the Company on directors’ appointment and remuneration, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on company’s website at

https://www.dwarikesh.com/wp-content/uploads/2023/03/

Policy-on-Directors-Appointment-and-Remuneration.pdf

E. Statement Of Director’s Responsibilities

Pursuant to the requirements under Section 134, sub-section 3(c) and sub-section 5 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state and confirm that: As required under the provisions of Section 134(3) (c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that year;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d. the directors had prepared the annual accounts on a going concern basis.

e. the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively,

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement), Management Discussion and Analysis Report for the year under review is presented in a separate segment which is forming part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Dwarikesh has been an early adopter of CSR initiatives. The Company works primarily through CSR trust, viz R R Morarka Charitable Trust, towards supporting projects in eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environmental sustainability, disaster relief and rural development projects.

Companies CSR initiatives and activities are aligned to the requirements of Section 135 of the Act. The brief outline of the CSR policy of the Company and the initiatives undertaken are available on our website at https://www.dwarikesh.com/wp-content/ uploads/2024/05/Policy-on-Corporate-Social-Responsibility.pdf

A detailed Annual Report on CSR Activities undertaken by the Company during the year as prescribed under the Companies (Corporate Social Responsibility) Amendment Rules, 2021 is annexed herewith as Annexure III.

RISK MANAGEMENT POLICY

As per Regulation 21 of the SEBI Listing Regulations, the top 1000 listed entities, determined on the basis of market capitalization has to constitute a Risk Management Committee. Risk Management Committee of the Company is responsible to review and combat the risk on periodical basis. A detailed note on Risk Management policy, elements of risk and its mitigation is comprised in Corporate Governance Report.

VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy, in compliance with the provisions of Section 177 of the Act and Regulation 22 of the Listing Regulations, so as to enable the Directors, Employees and all Stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimization of persons who use such mechanism and make provisions for direct access to the Chairman of Audit Committee. The details of the said policy is explained in the Corporate Governance Report and has been uploaded on the website of the Company at https://www.dwarikesh.com/wp-content/ uploads/2023/03/Whistle-Blower-Policy.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has put in place a policy on Anti Sexual harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

No complaints have been received during the year under review.

CORPORATE GOVERNANCE

As per Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance is provided under Annexure IV.

BOARD COMMITTEE

The Company has following mandatory Committees, viz,

1. Audit Committee

2. Stakeholders’ Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure V and form a part of this report.

AUDITORS

A. STATUTORY AUDITORS & AUDITOR’S REPORT M/s. Mittal Gupta & Co., Chartered Accountants having Firm Reg. No. 01874C, Kanpur were appointed as the Statutory Auditors of the Company at the AGM held on June 30, 2022 to hold office until conclusion of the 33^rd AGM. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Mittal Gupta & Co., that their appointment is made in conformity with the limits specified in the said Section.

The Auditors’ Report for the financial year ended March 31, 2024 is unmodified, i.e, it does not contain any qualification, reservation, adverse remark or disclaimer. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year under review

B. COST AUDITORS

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and rules made thereunder, the Board on the recommendation of the Audit Committee has re-appointed M/s. Ramanath Iyer & Co, Cost Accountants (Firm Regn No. 000019), as Cost Auditors to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended March 31, 2025.

The Cost Accountants have confirmed that their appointment is within the limits of Section 141(3)(g) of the Act and free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013.

The Cost Audit Report for the financial year March 31, 2023 did not contain any qualification, reservation, adverse remark or disclaimer. The Cost Audit Report for the year end March 31, 2024 shall be made available by Cost Auditors on or before September 30, 2024.

C. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. VKM & Associates, a Practicing Company Secretary (Certificate of Practice no. 4279), Secretarial Auditor to undertake the Secretarial Audit of the Company for the year ended March 31, 2024. The Secretarial Audit Report is appended to this Report as Annexure VI.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from fiscal 2023, while disclosure was voluntary for fiscal 2022.

DSIL believes that we are accountable not merely to our shareholders from a revenue and profitability perspective but also to the larger society which is also its stakeholder. Hence, to comply with BRSR requirements in professional manner Company has appointed an external agency viz. PricewaterhouseCoopers (PWC). The BRSR disclosures form a part of Annual Report 2023-24. Report is annexed by way of Annexure VII.

ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its members, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organization

---

Mar 31, 2023

Your Directors are pleased to present their 29^th (Twenty Ninth) Annual Report along with the Audited Financial Statements for the year ended on March 31, 2023.

FINANCIAL RESULTS

(H in Lakhs)
Particulars		Year Ended 31.03.2023	Year Ended 31.03.2022
Gross profit before depreciation, interest & tax		22,856.96	29,396.17
Less: Depreciation		5,021.64	4,362.92
Finance Costs		2,584.74	3,165.77
Profit / (Loss) before tax and exceptional items		15,250.58	21,867.48
Profit / (Loss) before tax		15,250.58	21,867.48
Tax expenses		4,769.52	6,345.93
Profit /(Loss) after tax		10,481.06	15,521.55
Total comprehensive income / (loss)		10,416.71	15,557.41
YEAR IN RETROSPECT Operations: Distinguishing features of the crushing operations in your Company are given in the following paragraphs: Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given hereunder: Sugarcane crushed and sugar produced across three units (FY 2022-23)
Particulars	2022-23	2021-22	Change
Crushing (lakh quintals)	382.13	373.92	2.20%
Recovery % (Gross - adjusted)	11.83	12.09	-2.15%
Recovery % (Net)	8.63	10.59	-18.51%
Production (lakh quintals)	32.98	39.60	-16.72%
Sugarcane crushed and sugar produced during season (FY 2022-23)
Particulars		2022-23	2021-22
Crushing (lakh quintals)		302.71	298.77
Recovery % (Gross - adjusted)		11.62	11.85
Recovery % (Net)		8.00	10.31
Production (lakh quintals)		24.02	30.58
For ongoing crushing season 2021-22 (up to 31st March, 2023) vis-a-vis up to same date in SS 2021-22.

HIGHLIGHTS FY 2022-23

¦ Sugarcane crushing increased marginally by 2.20% y-o-y.

¦ Net Recovery stood at 8.63% vis-a-vis net recovery of 10.59% during FY 2021-22. The same is lower by 18.51%. During SS 202223 sugarcane juice was for the first time directly used for making ethanol at both DN & DD Distillery units. 60.69 lakh quintals out of total cane crushed was thus diverted for making ethanol. The net recovery was achieved after taking into account the diversion of sugarcane juice / syrup at DN & DD plants and also on account of generation of B heavy molasses at all plants. Gross - adjusted recovery is 11.83% as compared to 12.09% in FY 2021-22.

¦ Sugar production is also lower on account of aforesaid diversion of sugarcane juice and on account of generation of B heavy molasses across all units. Lower sugar production is also attributable to lower gross - adjusted recovery. During FY 2022-23

sugar production of 12.23 lakh quintals was sacrificed on account of diversion of sugarcane juice for ethanol and on account of generation of B heavy molasses. This was as against sugar sacrifice of 5.61 lakh quintals on account of generation of B heavy molasses during FY 2021-22.

¦ Lower gross - adjusted recovery is on account of inclement weather conditions, excessive late rainfall in the month of October, 2022 resulting in water logging in cane fields over prolonged period and devastation caused by red rot in the command area of Dwarikesh Dham unit. Unfavorable weather conditions persisted throughout the duration of the season hindering optimal recovery.

¦ Notwithstanding the fall in recovery during FY 2022-23, recovery clocked by your Company was yet among the highest in North India.

¦ Diversion of sugarcane juice for ethanol and generation of B heavy molasses will result in broad-basing & transformation of the production metrics with increased focus on production of ethanol and moderation of sugar production. B heavy molasses generated at DN & DD unit is being stored for use in their respective distilleries during off-season, whereas B heavy molasses generated at DP unit will cater to the requirements of B heavy molasses at the distilleries of DN & DD units after fulfilling obligation to supply B heavy molasses for country liquor purposes.

Performance of cogeneration division: Metrics of power sold:

Unit	FY 2022-23		FY 2021-22
	Power sold in lakhs Units	Amount (H in Lakhs)	Power sold in lakhs Units	Amount (H in Lakhs)
DN	258.94	844	284.19	892
DP	578.60	1,918	585.16	1,864
DD	632.50	2,099	725.62	2,301
Total	1,470.04	4,861	1,594.97	5,057

Performance of distillery: During the financial year, 849.61 lakh liters of industrial alcohol (previous FY 553.71 lakh liters) was produced and 841.75 lakh liters (previous year 557.28 lakh liters) of industrial alcohol was sold. A revenue of H533.50 crores (previous year H326.21 crores) was generated which included revenue of H2.17 crores (previous year H1.62 crores) from sale of byproducts.

SUGAR INDUSTRY OVERVIEW

Global sugar industry scenario

¦ According to the March, 23 report of S&P Global ‘Commodity insights’, the projected surplus for SS 2022-23 was expected to moderate at less than one million tons, considerably lower than the erstwhile forecast of 3.77 million tons; This decline was largely due to cuts in sugar production from Asian countries. According to their latest report production estimate is further trimmed and S&P now estimates a virtually balanced position.

¦ In case of India & Thailand, decline in the crushing rate has been faster than usual. Drop in the output expectations from India & Thailand creates prospective uncertainties. There is also 50% probability of El-Nino event in the second half of 2023 which increases the chances of drier weather in Asia and wetter weather in Brazil. However, Season 2023-24 is expected to be a season of bumper sugar production for Central South Brazil.

¦ In CS Brazil, despite large crop expected for SS 202324 sugar supplies remains muted across the short term. In case of North - Northeast Brazil downside production

risks linger. In Thailand cane estimates for SS 2022-23 and SS 2023-24 are on lower side. In EU production cut on account of lower planted area is forecast. While China could continue to be a dominant sugar importer, its imports could prove unpredictable.

¦ Global raw sugar prices have been at an all-time high in the last 6 years. Tightened supplies from Brazil attributable to logistic & port related problems and frequent downward revision in production estimates form India have accentuated the price rise. The uncertainty of Government of India allowing further exports has also propelled the price rise. India has emerged as key sugar exporting geography as it played a pivotal role in the export trade in the world. India is seen as a big influencer of Global sugar price. India exported a record of 11.2 million tons of sugar in SS 2021-22. Indian sugar has been largely exported to Indonesia, Bangladesh, Malaysia, Middle east, China among other countries.

¦ Global sugar prices have been on upward spiral for large parts of the year. Presently NY May’ 23 future price for raw sugar is quoted in excess of 23 cents per pound. Higher energy prices have also lent support to international sugar prices.

¦ The ongoing war between Russia & Ukraine has also created opportunities for export of white sugar from India. White sugar prices have also moved in tandem with raw sugar prices and are at their 6 years highest. Indian sugar industry and ports have risen to the occasion and have completed their export obligations with consummate ease.

The Indian sugar industry - Consolidation

¦ Production figure of SS 2021-22 is 35.8 million tones after accounting for sugar sacrifice in favor of ethanol of 3.2 million tons: when factored back India produced nearly 39 million tons. Highest ever sugar exports - During the previous sugar season, India reported its highest sugar exports of 11.2 million tons, reinforcing the country’s position as a dominant global player. This export achievement was remarkable considering that they were not supported through subsidies / financial assistance by the Central Government. All logistic challenges at the ports were overcome seamlessly.

¦ As per the first estimate drawn by ISMA, it was expected that during SS 2022-23, India will produce 36.5 million tons of sugar after considering sugar sacrifice of 4.5 million tons, taking the gross sugar production to nearly 41 million tons. However, as the season has advanced, with news coming in of declining yield & recovery from the States of Maharashtra & Karnataka, ISMA revised its production estimate to 34 million tons of sugar while maintaining the sugar sacrifice number at 4.5 million tons.

¦ However, Trade bodies and Government of India have further announced a downward revision in production estimate and have now estimated the production at 33.6 million tons of sugar. Some independent trade houses believe that the production may in fact settle at less than 33 million tons. As per the latest update, ISMA trims sugar production estimate to 32.8 million tons from earlier 34 million tons.

¦ With the sharp reduction in tail end crush in Maharashtra & Karnataka, production estimate in Maharashtra is lowered to less than 11 million tons and in Karnataka lowered to less than 5.6 million tons. Crushing operations of many mills in Maharashtra & Karnataka have concluded even before 31^st March, 2023. Lower yields owing to unseasonal rainfall has resulted in lesser availability of sugarcane in these two states. Sugar recoveries in Uttar Pradesh proved lower, offsetting the gains in cane crush.

¦ The Government announced first tranche of export of 6 million tons under MAEQ mechanism. Nearly 5 million tons of sugar has already been exported. Most of the sugar mills in UP have traded deals with mills in Maharashtra, swapping their export quotas with domestic quotas.

¦ The Government has in the meantime recalibrated its opening stock number for SS 2022-23 at 7 million tons. As per Government of India, sugar availability for domestic consumption & exports is thus estimated at 40.6 million tons. Considering sugar consumption of 27.5 million tons & export of 6 million tons, the closing sugar inventory is now being estimated at more than 7 million tons, which translates to more than 3 months of domestic consumption.

¦ There is thus clearly scope for announcing at least one more million ton of sugar export. However, with the production estimates being in a state of flux, the Government may wait for clarity before announcing next tranche of exports.

However, the delay in announcement of export will limit the ability of Indian sugar mills to produce & export raw sugar.

¦ During ESY 2021-22 India creditably achieved ethanol blending of 10%. During ESY 2022-23, 12% blending is targeted. Already blending up to 20% is approved by the Government. The proportion of ethanol derived directly from sugarcane juice is expected to increase in ESY 202223. India is on course to achieve 20% blending by 1 ^st April 2025. Improved blending will result in moderating of sugar production, improvement in the ability of sugar mills to remunerate farmers on time, rationalizing the import tableau & widening the carbon footprint.

¦ Increased blending of ethanol is possible if more & more sugar companies ramp up their distillery capacities and start using cane juice / syrup as feedstock for making ethanol. Ethanol quantity presently offered using cane juice / syrup as feedstock is lesser than quantity of ethanol offered wherein B heavy molasses is used as feedstock.

¦ In order to encourage sugar mills to use cane juice / syrup as feedstock the rates presently announced by the Government needs to improved. More sacrifice of sugar will happen if and only if more sugar mills use cane juice / syrup as feedstock. Industry has been appealing for higher prices for ethanol made from cane juice / syrup directly and it is expected that Government will take an early call on the same.

¦ An area of concern has been the lower sugar prices in the domestic market. It is intriguing that the sugar prices have remained flattish throughout FY 2022-23 and have been range bound between H3,400 and H3,500 per quintal. This is in spite of projected lower closing inventory. Higher international prices have also not found resonance in domestic prices.

¦ However, there is a possibility that the premature closure of Maharashtra and Karnataka mills could revive domestic realisations (as could an El Nino likelihood in some global pockets in the second half of 2023).

¦ Under the ethanol blending program in the country, against requirement 600 crore liters OMC have till 31^st March, 2023 issued LOIs of 502 crore liters and contracts for 499 crore liters have been inked for ESY 2022-23 (December -October). Blending of more than 11.56% has been achieved. State of Uttar Pradesh has been in the forefront in signing ethanol contracts. However, out of 502 crore liters, ethanol produced from sugarcane juice/syrup as feedstock was only 142 crore liters or 28% of the total LOIs issued. There is a growing recognition that for the EBP program to be resoundingly successful, more procurement contracts will need be signed for cane juice / syrup-based ethanol.

¦ There are no two opinions about the success of the Ethanol Blending Program (EBP). Cash flows of sugar companies have improved. In the sugar season of 2021-22, the quantum of sugar production ‘sacrificed’ in favor of ethanol was 3.2 million tons while in SS 2022-23 this is expected to rise to

more than 4 million tons. In SS 2023-24, a sugar ‘sacrifice’ of more than 6 million tons could reduce the gap between sugar production and consumption; the surplus sugar then available could be remuneratively exported.

¦ The government plans to introduce flex fuel vehicles, which can accommodate a higher percentage of ethanol and can even be operated completely on ethanol, a step towards helping the country achieve the 20% blending target.

¦ The EBP has showcased the Indian government’s foresight in addressing longstanding sugar industry challenges. A cash-starved sector that suffered cane arrear delays now has healthy cash flows, making it possible to remunerate farmers punctually and invest in additional distillery capacity. A growing sugar ‘sacrifice’ is expected to moderate sugar inventory and strengthen realizations, strengthening a virtuous cycle of additional cane planting and mill capacity utilization. The confidence instilled by the ethanol blending program is noteworthy. Sugar inventory across the country stands tapered at reasonable levels. Though there are problems such as lower sugar prices among others, sugar industry doesn’t now face insurmountable challenges. However, sickness in the industry is not completely eradicated. Some States do face problems of inadequate cane availability and there are still number of sugar mills operating at sub-optimal capacity.

¦ Sugar industry across the Globe is regulated and India is no exception. Central Government continues to regulate the industry.

Central Government continues to administer minimum selling price of sugar which is fixed at H3,100 per quintal though the industry has been seeking upward revision.

Central Government also operates the monthly release mechanism so as to ensure adequate & affordable sugar availability in the open market.

Central Government announces timely sugar export quotas to enhance sectorial liquidity and ensure better domestic realizations. During the SS 2022-23 the Government has announced maximum allowable export quota (MAEQ) of 6 million tons which has been apportioned across all sugar mills in the country. This was done to ensure a healthy domestic sugar balance between supply and demand, while addressing export needs. The Government dispensed with the export subsidy as international sugar prices remained attractive.

Central Government also determines the annual Fixed & Remunerative price (F&RP). The same is the minimum price which sugar mills must pay for the sugarcane procured by them. Some States went one step further and announce a State Administered Price (SAP) that is higher than F&RP

Ethanol procurement price for Ethanol Season Year 202223 (December to October) is fixed at H49.41 per liter for ethanol made from C-Heavy molasses (increase of H2.75 per liter over the price of previous period), H60.73 per liter for ethanol made from B-Heavy molasses (increase of H1.65 per liter over the price of previous period) and H65.61 per liter for ethanol produced directly from sugarcane juice (increase of H2.16 per liter over the price of previous period). The Government had during ESY 2021-22 also announced ‘relief price’ to incentivize sugar mills to supply more ethanol during the lean months.

The Uttar Pradesh Sugar Industry - Transformation

¦ During SS 2022-23 UP State is expected to produce around 10 million tons of sugar, which is in line with the previous Sugar season.

¦ Gains in crush on account of higher cane area have been neutralized by lower yield, lower recovery and higher diversion of sugarcane for producing ethanol.

¦ The commencement of season 2022-23 was delayed by over 10 days on account of incessant & unseasonal rainfall during October which has resulted in waterlogging of cane fields. Antagonistic climate conditions and the menace of red-rot, scuttled and dented the prospect of improved yields and better recovery.

¦ The State Government announced no change in SAP for SS 2022-23 which remained H350 per quintal (delivered at factory gate) for early variety, which constitutes nearly 90% of the total supply.

¦ The season of 2022-23 has witnessed aggressive participation of sugar mills in Uttar Pradesh in ethanol blending programs. Many a sugar mills are using cane juice / syrup directly for manufacture of ethanol.

¦ The enhanced financial stability of sugar mills in UP enabled these mills to moderate SS 2022-23 cane price arrears to around H7,500 crores from more than H10,000 crores around the same time in the previous year.

¦ Many sugar mills have altered their cane mix from the high yielding Co 0238 which was a win-win variety for both farmers and sugar mills. Since the said variety has now become prone to red rot epidemic, the same is now sought to be replaced by other equally good, early maturing & promising varieties.

¦ UP sugar mills have witnessed moderation of stock levels of sugar, owing to exports in the previous season and also on account of production of ethanol using B heavy molasses and sugarcane juice / syrup.

Dwarikesh - Financial Scorecard:
Particulars	2022-23		2021	-22
	(H lakh)	(%)	(H lakh)	(%)
Revenue from operations	2,10,296	100.00	1,97,871	100.00
EBITDA	22,857	10.87	29,396	14.86
EBDTA	20,272	9.64	26,230	13.26
EBT	15,251	7.25	21,867	11.05
EAT	10,481	4.98	15,522	7.84

¦ Revenue from operations during FY 2022-23 is up by 6.28% as compared to the revenue during 2021-22. Improvement in revenue growth is inferable to the increased releases under the monthly release mechanism administered by the Central Government & beneficial revenue mix with additional weightage of ethanol. It is worth mentioning that the share of revenue from distillery segment to the total net revenue is 25.37% as compared to 16.49% in the previous year. Distillery plant at DN unit worked at its rated capacity while the distillery plant at DD unit which was commissioned in June, 2022 also operated for a part of the year at its rated capacity.

» EBIDTA, during FY 2022-23 is H22,857 lakhs as compared to EBIDTA of H29,396 lakhs during previous FY, is 22.25% less. Lower EBIDTA as compared to previous FY is on account higher cost of goods sold without commensurate increase in their selling price. Higher cost of goods sold is a reflection of higher raw material cost as well as lower sugar recovery.

» EBDTA, during the year under review your Company earned EBDTA of H20,272 lakhs as compared to H26,230 lakhs earned in the previous FY.

» Earning before tax is at H15,251 lakhs when viewed in conjunction with that of the previous FY (H21,687 lakhs).

» Earnings after tax is at H10,481 lakhs, as compared to the earnings after tax of previous FY of H15,522 lakhs. Earnings after tax for the year is 32.47% less than earnings after tax of the previous year.

» Your Company’s focus to rein in finance costs has been fruitful and the Company was able to compress finance costs.

Salient features:

¦ According to the latest estimate, crushing will be in line with that in the previous season with all our units expected to report a similar crushing. The Company initiated a program to change its varietal balance in the Dwarikesh Dham unit area. This unit encountered significant drop in the pol-in-cane during this season, indicative of lower sucrose and higher non-sugar content. Your Company’s cane development is expected to reverse the trend.

¦ The Company has already exported 50,000 MTs of sugar under export policy of SS 2022-23. The raw sugar for export was produced at DN & DD units. The Company has swapped its balance export quota of 36,001 MTs with domestic quota releases of sugar mills in Maharashtra. The Company will benefit from additional releases from April, 2023 onwards.

¦ The Company utilized sugarcane juice directly for making ethanol at both its DN & DD distillery units. Of the total crushing capacity of 21,500 TCD, approximately 4,500 TCD was utilized for generating juice to be used in the manufacture of ethanol. B-Heavy molasses was generated in all three units, which will be used as ethanol feedstock during the off-season at both distilleries. The operations at both distilleries now stabilised; nearly 11 crore litres of ethanol is likely to be produced and sold to OMCs annually. With substantive sugar ‘sacrifice’, the sales and revenue mix will transform.

¦ Rating agency ICRA, has upgraded the long-term rating of the Company to (ICRA)AA- (pronounced as AA minus) from [ICRA]A (pronounced ICRA A plus). This is a significant achievement and is recognition of judicious fiscal management of the Company. The outlook has been revised to ‘Stable’ from ‘positive’. The Company has retained the highest rating of A1 also from ICRA for its CP program of H 300 crores.

¦ Your Company continued to pay for sugarcane ahead of schedule. As on 31^st March, 2023, your Company had cleared payments for cane purchased up to 27^th March 2023.

¦ Your Company’s distilleries (DN and DD units) were operating optimally even as the new DD distillery encountered teething challenges that were subsequently overcome. This resulted in a lower initial ethanol yield from feedstock.

¦ The fiscal in reckoning was a manifestation of higher cost of goods sold (a combination of higher cane cost & lower recovery) without commensurate increase in sugar realisations.

¦ Long term debt profile: Out of soft loan of H134.48 crores availed under SEFASU 2018, funded by the State Government, balance on 31/3/2023 is H33.62 crores and

out of distillery term loan availed of H116.88 crores for DN distillery unit, balance on the same date is H64.28 crores. Term loan of H185.60 crores sanctioned for 175 KLPD distillery plant at DD unit has been fully availed and no repayment during the financial year was made as the repayment is under moratorium. All term loans availed by the Company were mobilized at subsidized rate of interest.

¦ Sugar prices were inexplicably muted & subdued throughout the year and were flattish in the range of H3,400 per quintal to H3,500 per quintal.

¦ Your Company is constantly exploring possibilities of revenue optimization, cost rationalization and profit enhancement. Your Company is respected for competent management, translating into outperformance (evident in record recoveries).

¦ The SS 2022-23 was marked by lower recovery at the DD unit due to a widespread red-rot disease infestation in its command area. The DD unit comprises a vast command area; the unit holds potential for increased crushing and recovery. The Company intensified methodical ratoon management to moderate crop damage and sustain the healthy growth of Co-0238; it also took initiatives to replace this with new early maturing varieties like 15023, 14201 and 118. In command areas not marked by red rot, your Company sustained the health of Co 0238 and will introduce new varieties in a phased manner.

CANE & SUGAR POLICY

The main policies of the government in relation to the sugar

industry during the year were:

a. The Fair & Remunerative Price (FRP) until SS 2017-18 was linked to a recovery of 9.50%. Effective SS 2018-19, FRP has been linked to a recovery of 10%. While the FRP for SS 2021-22 was H290 per quintal for SS 2022-23 the same stands increased to H305 per quintal again linked to a recovery of 10.25%.

b. Chronology of SMP/FRP announced by the Central Government on the basis of recovery is given herein under:

Season	SMP/F&RP H/ Quintal
2000-01(SMP)	59.50*
2001-02	62.05*
2002-03	64.50*
2002-03 (Revised)	69.50*
2003-04	73.00*
2004-05	74.50*
2005-06	79.50&
2006-07	80.25&
2007-08	81.18&
2008-09	81.18&

Season	SMP/F&RP H/ Quintal
2009-10 (SMP since replaced by F&RP)	129.84@
2010-11	139.12®
2011-12	145.00@
2012-13	170.00®
2013-14	210.00®
2014-15	220.00®
2015-16	230.00®
2016-17	230.00®
2017-18	255.00®
2018-19	275.00#
2019-20	275.00#
2020-21	285.00#
2021-22	290.00#
2022-23	305.00#

* Linked to recovery of 8.50%

& Linked to recovery of 9.00%

@ Linked to recovery of 9.50%

# Linked to recovery of 10.00%

c. All sugar mills in Uttar Pradesh are required to pay State Administered Price (SAP). For crushing season 2021-22 the State Government of Uttar Pradesh increased SAP by Rs. 25 per quintal across all varieties. For SS 2022-23 the Government retained the SAP of SS 2021-22. Early variety of sugarcane, which constitutes more than 90% of the sugarcane supplied by farmers, is now paid Rs. 350 per quintal for delivery at factory gate.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The Company commissioned 175 KLPD distillery at its Dwarikesh Dham Unit, Dist. Bareilly, Uttar Pradesh on 24^th June 2022. The distillery uses sugarcane juice / syrup as its principal feedstock during the cane crushing season and turns to B Heavy molasses route during the off season for continuous manufacture of ethanol. The implementation of project was on schedule. With the commissioning of this plant the revenue mix of the Company will undergo paradigm shift as the sugar production will moderate and ethanol production increase.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

No significant & material orders have been passed impacting the going concern status & Company’s operations in future.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls commensurate with its size, scale and operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the management, no reportable or significant deficiencies, no material weakness in the design or operation of any control was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are re-enforced on an ongoing basis. The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

DIVIDEND

Your Directors recommended payment of an interim equity dividend of H2/- per equity share (i.e. 200%) on face value of H 1/- per share. The cash outflow on account of equity dividend is H37,66,02,940 /-. This interim dividend shall be considered as final divided for the FY 2022-23.

TRANSFER TO GENERAL RESERVE

As permitted under the provisions of the Companies Act, 2013, the Board does not propose to transfer any amount to general reserve and has decided to retain the entire amount of profit for the Financial Year 2022-23 in the profit and loss account.

SHARE CAPITAL

The paid-up Equity Share Capital as at March 31, 2023 stood at H 18.83 crores. During the year under review, the Company has not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity or warrants.

H250 crores worth of commercial paper were issued by the Company during the preceding financial year. Out of the aforementioned sum, H150 crores have already been redeemed during previous financial year, and the remaining balance of H100 crores have been redeemed during the year.

COPY OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, copy of the Annual Returns of the Company in form MGT-7 is placed on the website of the Company and is accessible at the web-link: https://www.dwarikesh.com

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company met five (5) times during the year on May 02, 2022; July 29, 2022; October 28, 2022; January 30, 2023 and March 20, 2023.

SUBSIDIARY COMPANY’S REPORT

The Company does not have any subsidiary in terms of provisions of Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions entered during the financial year were in the ordinary course of business and at arm’s length basis. There were no materially significant Related Party Transactions with the Company’s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as required to be provided under Section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure I.

The Board of Directors of the Company on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules thereunder and the Listing Regulations and placed at the below mentioned weblink: https://www.dwarikesh.com/pdf/2018/ Related-Party-Transactions-Policy-1.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any loans or investments or given guarantees or provided securities under Section 186 of the Act during the year.

PUBLIC DEPOSITS

The Company did not have any fixed deposits at the beginning of the year nor has it accepted any deposited during the year in terms of Section 74 of the Companies Act, 2013.

MSME RETURN

MCA vide order dated 22^nd January, 2019 directed all companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days during the year. The Company is not required to file MSME Return as all payments have been done within prescribed time.

PARTICULARS OF EMPLOYEES AND RELATED INFORMATION

In terms of the provision of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above rules are provided in Annexure II.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Changes in Directors and Key Managerial Personnel

During the year, Shri B. K. Agarwal (DIN: 00001085) resigned as an Independent Director of the Company w.e.f. October 28, 2022. The Board places on record appreciation for his valuable contribution to the growth of the Company.

B. Declaration by an Independent Director(s), ReAppointment & Meeting

Pursuant to the requirements of Section 149(7) of the Companies Act, 2013, the Company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in Section 149(6) of the Companies Act, 2013.

As required under Schedule IV to the Act(Code for Independent Directors) and Regulation 25 (3) of the hold at least 1 (one) meeting in a year, without the presence of Non-Independent Directors.

The Independent Directors met once, i.e, on Monday, January 30, 2023. The Meeting was conducted without the presence of the Chairman, Executive Directors and any other Managerial Personnel.

The Independent Directors, inter alia, discussed, and reviewed performance of Non-Independent Directors, the Board as a whole, Chairman of the Company, and assessed the quality, quantity and timeliness of flow of information between the Companies management and the Board that is necessary for the Board to perform its duties effectively and reasonably.

C. Formal Annual Evaluation

Pursuant to the requirements of Section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of the SEBI Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of its Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

D. Policy on Directors’ Appointment and Remuneration including criteria for determining qualifications, positive attributes, independence of a Director, Key Managerial Personnel and other employees

In line with the principles of transparency and consistency, your Company has adopted the following policies which, inter alia includes criteria for determining qualifications, positive attributes and independence of a Director.

The policy of the Company on directors’ appointment and remuneration, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on Company’s website at https://www.dwarikesh.com/pdf/2018/Policy-on-Directors-Appointment-and Remuneration.pdf

E. Statement of Director’s Responsibilities

Pursuant to the requirements under Section 134, subsection 3(c) and sub-section 5 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state and confirm that: As required under the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. the directors had prepared the annual accounts on a going concern basis.

e. the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively,

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement), Management Discussion and Analysis Report for the year under review is presented in a separate segment which is forming part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Dwarikesh has been an early adopter of CSR initiatives. The Company works primarily through CSR trust, viz R R Morarka Charitable Trust, towards supporting projects in eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environmental sustainability, disaster relief and rural development projects.

Companies CSR initiatives and activities are aligned to the requirements of Section 135 of the Act. The brief outline of the CSR policy of the Company and the initiatives undertaken are available on our website at https://www.dwarikesh.com/pdf/2021/ Policy-on-Corporate-Social-Responsibility.pdf .

A detailed Annual Report on CSR Activities undertaken by the Company during the year as prescribed under the Companies (Corporate Social Responsibility) Amendment Rules, 2021 is annexed herewith as Annexure III.

RISK MANAGEMENT POLICY

As per Regulation 21 of the SEBI Listing Regulations, the top 1000 listed entities, determined on the basis of market capitalization has to constitute a Risk Management Committee. Risk Management Committee of the Company is responsible to review and combat the risk on periodical basis. A detailed note on Risk Management policy, elements of risk and its mitigation is comprised in Corporate Governance Report.

VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy, in compliance with the provisions of Section 177 of the Act and Regulation 22 of the Listing Regulations, so as to enable the Directors, Employees and all Stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimization of persons who use such mechanism and make provisions for direct access to the Chairman of Audit Committee. The details of the said policy is explained in the Corporate Governance Report and has been uploaded on the website of the Company at https:// www.dwarikesh.com/pdf/2018/Whistle-Blower-Policy.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has put in place a policy on Anti Sexual harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

No complaints have been received during the year under review.

CORPORATE GOVERNANCE

As per Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance is provided under Annexure IV.

BOARD COMMITTEE

The Company has following mandatory Committees, viz,

1. Audit Committee

2. Stakeholders’ Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure V and form a part of this report.

AUDITORS

A. STATUTORY AUDITORS & AUDITOR’S REPORT M/s. Mittal Gupta & Co., Chartered Accountants having Firm Reg. No. 01874C, Kanpur were appointed as the Statutory Auditors of the Company at the AGM held on June 30, 2022, to hold office until conclusion of the 33^rd AGM. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written

confirmation from M/s. Mittal Gupta & Co., that their appointment is made in conformity with the limits specified in the said Section.

The Auditors’ Report for the financial year ended March, 2023 is unmodified, i.e, it does not contain any qualification, reservation, adverse remark or disclaimer. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year under review.

B. COST AUDITORS

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and rules made thereunder, the Board on the recommendation of the Audit Committee has re-appointed M/s. Ramanath Iyer & Co, Cost Accountants (Firm Regn No. 000019), as Cost Auditors to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended March 31, 2023.

The Cost Accountants have confirmed that their appointment is within the limits of Section 141 (3) (g) of the Act and free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013.

The Cost Audit Report for the financial year March, 2022 did not contain any qualification, reservation, adverse remark or disclaimer. The Cost Audit Report for the year end March, 2023 shall be made available by Cost Auditors on or before September 30, 2023.

C. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment

and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. VKM & Associates, a Practicing Company Secretary (Certificate of Practice no. 4279), Secretarial Auditor to undertake the Secretarial Audit of the Company for the year ended March 31, 2023. The Secretarial Audit Report is appended to this Report as Annexure VI.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from fiscal 2023, while disclosure was voluntary for fiscal 2022 .

DSIL believes that we are accountable not merely to our shareholders from a revenue and profitability perspective but also to the larger society which is also its stakeholder. Hence, to comply with BRSR requirements in professional manner Company has appointed an external agency viz. PricewaterhouseCoopers (PWC). The BRSR disclosures form a part of Annual Report 2022-23. Report is annexed by way of Annexure VII.

ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its members, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organization.

---

Mar 31, 2022

Your Directors are pleased to present their 28^th (Twenty Eighth) Annual Report along with the Audited Accounts for the year

ended on 31^st March, 2022.

FINANCIAL RESULTS

(H in Lakhs)
Particulars	Year Ended 31.03.2022	Year Ended 31.03.2021
Gross profit before depreciation, interest & tax	29,396.17	20,834.99
Less: Depreciation	4,362.92	4,089.40
Finance Costs	3,165.77	4,765,38
Profit / (Loss) before tax and exceptional items	21,867.48	11,980.21
Profit / (Loss) before tax	21,867.48	11,980.21
Tax expenses	6,345.93	2,826.38
Profit /(Loss) after tax	15,521.55	9,153.83
Total comprehensive income / (loss)	15,557.41	9,520.34

DIVIDEND

Your Directors recommended payment of an interim equity dividend of200% i.e. H2/- per equity share of face value of H1/- each. The cash outflow on account of equity dividend is H37,66,02,940/-.

YEAR IN RETROSPECT

Impact of Covid-19: The well-being of our employees and their family members is one of our foremost priorities. We restructured our standard operating procedures and set strict protocols for the safeguard the health of our employees and their families. We also took special care to ensure that there is minimum disruption of services to all our customers and business associates. So far, the pandemic has not caused any significant business disruptions.

Operations: Distinguishing features of the crushing operations in your company are given in the following paragraphs: Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given hereunder:

Sugarcane crushed and sugar produced across three units (FY2021-22)

Particulars	2021-22	2020-21	Change
Crushing (Lac Quintal)	373.92	397.14	-5.85%
Recovery (Gross - adjusted)	12.09	12.20	-0.90%
Recovery % (Net)	10.59	11.54	-8.23%
Production (Lacs Quintal)	39.60	45.93	-13.78%

FINANCIAL RESULTS

(H in Lakhs)
Particulars	Year Ended 31.03.2022	Year Ended 31.03.2021
Gross profit before depreciation, interest & tax	29,396.17	20,834.99
Less: Depreciation	4,362.92	4,089.40
Finance Costs	3,165.77	4,765,38
Profit / (Loss) before tax and exceptional items	21,867.48	11,980.21
Profit / (Loss) before tax	21,867.48	11,980.21
Tax expenses	6,345.93	2,826.38
Profit /(Loss) after tax	15,521.55	9,153.83
Total comprehensive income / (loss)	15,557.41	9,520.34

DIVIDEND

Your Directors recommended payment of an interim equity dividend of200% i.e. H2/- per equity share of face value of H1/- each. The cash outflow on account of equity dividend is H37,66,02,940/-.

YEAR IN RETROSPECT

Impact of Covid-19: The well-being of our employees and their family members is one of our foremost priorities. We restructured our standard operating procedures and set strict protocols for the safeguard the health of our employees and their families. We also took special care to ensure that there is minimum disruption of services to all our customers and business associates. So far, the pandemic has not caused any significant business disruptions.

Operations: Distinguishing features of the crushing operations in your company are given in the following paragraphs: Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given hereunder:

Sugarcane crushed and sugar produced across three units (FY2021-22)

Particulars	2021-22	2020-21	Change
Crushing (Lac Quintal)	373.92	397.14	-5.85%
Recovery (Gross - adjusted)	12.09	12.20	-0.90%
Recovery % (Net)	10.59	11.54	-8.23%
Production (Lacs Quintal)	39.60	45.93	-13.78%

Sugarcane crushed and sugar produced during season 2021-22
Particulars	2021-22	2020-21
Crushing (lac per quintal)	298.77	303.20
Recovery % (Gross - adjusted)	11.85	12.13
Recovery % (Net)	10.31	11.27
Production (lac per quintal)	30.58	33.95

For ongoing crushing season 2021-22 (up to 31^st March, 2022) vis-a-vis up to same date in SS 2020-21.

Highlights FY 2021-22

• Sugarcane crushing declined by 5.85% y-o-y.

• Net Recovery stood at 10.59% compared to net recovery of 11.54% in FY2020-21 is lower by 8.23%. This recovery was achieved after taking into account the diversion of B heavy molasses at all plants. Gross - adjusted recovery is 12.09% compared to 12.20% in FY2020-21.

• Sugar production is lower on account of generation of B heavy molasses across all three units so as to maximize ethanol production. Lower sugar production is also due to lower recovery.

• Lower recovery is on account of inclement weather conditions, excessive late rainfall resulting in water logging in cane fields over prolonged period and devastation caused by red rot in the command area of Dwarikesh Dham unit. Unfavorable weather conditions persisted throughout the duration of the season hindering optimal recovery.

• The Company clocked one of the highest recoveries in North India notwithstanding.

• In an effort to broad-base and optimize revenues from the sale of ethanol and to moderate the production of sugar, entire quantity of sugarcane was crushed to generate B heavy molasses across all three units. A part of the B heavy molasses generated at DN and DP unit was used at the distillery unit at DN plant, another part of the B heavy molasses generated at Dwarikesh Dham unit was sold to country liquor manufacturers for fulfilling levy sale obligations and the remaining quantity is being stored for use in the upcoming distillery at a unit which is expected to be operational by end of June, 2022.

Performance of cogeneration division: Metrics of power sold:				(H in Lakhs)
Unit	FY 2021-22		FY 2020-21
	Power sold in	Amount	Power sold in	Amount
	lakhs Units		lakhs units
DN	284.19	892	294.76	893
DP	585.16	1,864	622.61	1,905
DD	725.62	2,301	791.86	2,423
Total	1,594.97	5,057	1,709.23	5,221

Performance of distillery: During the financial year, 553.71 lac liters of industrial alcohol (previous FY 308.26 lac liters) was produced and 557.28 lac liters (previous year 317.32 lac liters) of industrial alcohol was sold. A revenue of H326.21 crores (previous year H160.67 crores) was generated which included revenue of H1.62 crores (previous year H1.51 crores) from sale of byproducts.

Sugar industry overview

Global sugar industry scenario

The global sugar industry is expected to witness a deficit for the third year in succession. The deficit forecast for SS 2021-22 stands lowered at 1.1 million tonnes from an

earlier forecast of 1.9 million tonnes. The lower deficit is on account of India producing substantially more sugar than was originally estimated. Considering the escalating production trend in India, the small global deficit may soon turn into small surplus. India is on course to export 9 million tonnes of sugar, partly compensating for lower sugar exports from Brazil. Higher production in India will off-set problems in Thailand and China where production is lesser than expected. According to a study by Rabo Bank global sugar demand grew by 1% in the last decade or 1.30% if the pandemic years were to be excluded, down from 2.5% growth in the previous decade.

Performance of India on the export front has been impressive.

India is expected to clock exports of 9 million tonnes during SS 2021-22 all under OGL as compared to 7 million tonnes, mostly exported under export subsidy scheme with quotas allocated to each sugar mill.

The recent spurt in crude prices on account of the ongoing war between Russia and Ukraine has resulted in Brazil diverting sugarcane juice for ethanol manufacture. As per UNICA, sugar production estimate in Brazil CS is pegged at 32.064 million tonnes, lower by 16.64% as compared to 38.465 million tonnes produced during SS 2020-21. Sugar mix was lower than ethanol mix by approximately 1%.

Global sugar prices have been on a rebound. From ~16-17 cents per pound during February to April, 2021, the prices gained traction as the year advanced and remained range bound between 18-19 cents per pound for most part of the year, with sporadic spikes and even breaching the mark of 21 cents per pound. With the onset of Russia-Ukraine war resulting in geo-political tension and disruption of trade across the world, and the surge in oil price, sugar prices were hovering around 20 cents per pound a month ago. Higher global energy prices have been supportive of higher ethanol price in Brazil leading to lower sugar mix estimates in Brazil thus catalysing Indian exports in a big way. White sugar prices have also been on upward trajectory and were hovering around USD 550 PMT a month ago, both raw sugar prices and white sugar prices have recently sobered down a little on account of subdued crude prices.

The Indian sugar industry review

Indian sugar season 2021-22 proved to be eventful. The season was characterized by few landmark statistics such as

a. Highest ever sugar production - as per latest estimate, more than 35 million tonnes.

b. Production estimates were revised multiple times. The latest estimate of production being around 4 million tonnes more than the first estimate.

c. Sugar sacrifice in favor ethanol of 3.4 million tonnes -a gross production of nearly 38.4 million thus fortifying the premise that India is fundamentally a sugar surplus nation.

d. The states of Maharashtra and Karnataka have clocked new records of production. The production in Maharashtra is expected to breach the 13 million tonnes mark for the first time and Karnataka is expected to produce its highest ever yield of six million tonnes of sugar.

e. Highest ever sugar exports - estimated to be around 9 million tonnes - a singular accomplishment considering the fact that the entire export is under OGL scheme and without the support of any export subsidy.

India’s Sugar Season 2021-22 commenced with an opening stock of 8.2 million tonnes. As per the latest estimates of ISMA, sugar mills across the country are likely to produce 35 million tonnes of sugar, after factoring in the sacrifice of 3.4 million tonnes of sugar production in favor of ethanol, thus taking sugar availability to 43.2 million tonnes. With exports likely to record the coveted 9 million tonnes mark and consumption / offtake being around 27.5 million tonnes, the closing stock of sugar is expected to be 6.7 million tonnes. The estimated closing stock translates to 3 months consumption / offtake. The kind of closing stock that India is estimated to end up with is optimum stock which would neither stoke any runaway increase in sugar price nor would it be such that sugar mills will be deprived of reasonable prices.

On the export front performance of India has been impressive more so because it isn’t buttressed by any subsidy scheme of the Government. The large trading houses and the top experts of sugar trade, have now started considering the Indian domestic sugar prices as a big influencer on the world sugar prices. Earlier, the main yardstick applied was the sugar and ethanol parity price of Brazil, but now they factor in the Indian sugar quantity and prices for exports. It is now globally recognized that India is a regular exporter of sugar into the world market. Across the world there is an acceptance of the quality and delivery of Indian raw sugar and white sugar. The Indian sugar finds willing and regular buyers in the world market.

Sugar from India has been mainly exported to countries like Indonesia, Malaysia, Bangladesh, China Saudi Arabia and a few African countries. No quotas were allotted to sugar mills in India and the entire sugar exports from India will be under Open General License scheme. Since sugar mills in Maharashtra and Karnataka enjoy the benefit of proximity to ports whereas sugar mills of Uttar Pradesh are in the hinterland, most export contracts have been signed by sugar mills in Maharashtra and Karnataka.

In a decisive initiative, the Government of India advanced the target for 20 per cent ethanol blending in petrol (also called E20) from 2030 to 2025. E20 is expected to be rolled out from April 2023 and aid in moderating the country’s oil imports and carbon footprint. The Central Government proposed a gradual rollout of ethanol-blended fuel to achieve E10 fuel supply by April 2022 and a phased rollout of E20 from April 2023 to April 2025. The government intends to achieve an ethanol blending target of 10% in the current ethanol supply year of 2021-22.

Under the ethanol blending program in the country, the OMCs have allocated a total quantity of approximately 416.3 crore liter for procurement during ESY 2021-22 against the total requirement of 459 crore liter and contracts for a total quantity of 403 crore liters have already been signed.

Blending of 9.66% has already been achieved and the country is on course to achieve 10% blending during the ESY 2021-22.

Credit to the Government of India for promulgating and executing an ambitious Ethanol Blending Program (EBP) which aims to achieve multiple objectives such as making the country self-reliant in so far as its energy needs are concerned, reducing the carbon footprint, moderating sugar production and also improving the viability of sugar mills to enable them to timely pay the economically remunerative price for the sugar cane procured by them. This is also in line with the global trend of converting surplus food into energy. The sugar industry must be commended for enthusiastically participating in the Ethanol Blending Program (EBP) by setting up or increasing ethanol manufacturing capacities. Indian sugar sector is thus witnessing a paradigm shift -from sugar to bioenergy.

The Ethanol Blending Program (EBP) augurs well for the sugar industry. While season 2021-22 is expected to witness a sacrifice of 3.4 million tonnes of sugar in favor of ethanol, the game changing sacrifice is only going to increase in SS 2022-23 and thereafter more and more sugar companies are expected to produce ethanol directly from juice besides producing the same from B heavy molasses. The practice of using conventional C heavy molasses for producing ethanol which resulted in no sacrifice of sugar production is becoming redundant.

Early introduction of flex-fuel vehicles which can take higher percentages of ethanol, including running these vehicles on pure ethanol will only help achieve 20% blending target, because by 2025 E20 vehicles will constitute for around 25% of the fleet and therefore achieving 20% ethanol blending with petrol by then may seem to be a tall order. Brazil, which is a pioneer in this field, has achieved petrol to ethanol consumption ratio of 53:47 which is mainly thanks to large population of flex-fuel vehicles in the country.

Transactional / logistic challenges in ethanol procurement by oil marketing companies have been much lesser although the policy of oil marketing companies to prioritize ethanol made from non-molasses is rather opaque and creates needless confusion. It is also imperative that OMC’s scale up their storage and blending capacities and also develop capacities at dispensing stations so as to achieve higher percentage of blending. It is also necessary that infrastructure is created for movement of ethanol by rail so that ethanol availability in far-east and other remote areas is improved and transportation costs are minimized.

The Central Government has played a significant role in addressing the fundamental problems plaguing the sugar industry in India. Hitherto whenever the industry faced problems and the cane arrears accumulated, the Government would arrange subsidized loans for the industry to help them

clear the cane dues. The debt burden on the industry kept mounting and the industry never really could come out of the vicious vortex in which it found itself sucked. India is fundamentally a sugar surplus nation. This malady was rightly diagnosed and the Government drew an Ethanol blending program (EBP) for finding alternative uses of sugarcane juice to address the long-term woes ofthe industry and also, in the last few years, has worked to encourage sugar exports from India to address the problem of stock overhang in the country. As a result, the estimated closing stock of sugar during SS 2021-22 is expected to be less than 7 million tonnes (equivalent to 3 months consumption) vis-a-vis stock 14.6 million tonnes at the end of SS 2018-19. The Central Government continues to regulate the industry with a view to support it. The following interventions by the Central Government have augured well for the industry.

• Retention of minimum ex-factory selling price of sugar at H3,100 per quintal. Although the sugar prices in the last several months have been in excess of the MSP announced by the Government, yet the regulation has been able to discipline the industry and prevented sugar companies from panic selling below the threshold price.

• Monthly release mechanism to regulate and moderate the availability of sugar in the open market.

• Ethanol procurement price for Ethanol Season Year 2021-22 (November to October) fixed at H46.66 per liter for ethanol made from C-Heavy molasses, H59.08 per liter for ethanol made from B-Heavy molasses and H63.45 for ethanol produced directly from sugarcane juice. Higher price for ethanol made from sugarcane juice and B heavy molasses is to encourage sugar mills to sacrifice sugar production in favor of ethanol and thus moderate sugar stock levels.

• In view of the better international prices of sugar, the Government for the SS 2021-22, has done away with the quota system and subsidy for export. Regardless of the same, export performance of the industry has been impressive.

The Uttar Pradesh sugar industry - reality check

• After a hiatus of four seasons, sugarcane price for the SS 2021-22 (SAP) was increased by H25 per quintal across all varieties.

• During SS 2021-22 Uttar Pradesh is expected to produce 10.2 million tonnes of sugar as compared to 11.2 million tonnes produced in SS 2020-21 and 12.6 million tonnes produced in SS 2019-20. Estimated lower production is attributed to the following factors:

Unseasonal rainfalls in the month of September and resultant water-logging in low lying cane fields. This not

only stunted the growth of sugarcane, but also constrained sucrose formation. This resulted in lower yields at the farms and lower recovery at sugar mills. Moreover, extremely cold and chilly winter over prolonged period with no significant difference between day and night temperatures did not help optimise the photosynthesis process, thus impacting the recovery. The recovery across Uttar Pradesh for seasons 2021-22 is expected to be lower by at least 20 to 50 basis points.

The menace of red rot pest more particularly in Central and Eastern Uttar Pradesh on variety Co 0238 negatively impacted the production by negating both yield as well as recovery. Massive efforts have been launched by sugar mills towards varietal replacement as well to ensure longevity of Co 0238 variety.

Sugar mills in Uttar Pradesh have been enthusiastic participants in the Ethanol blending programme (EBP). New

capacities have been added and existing capacities expanded. This has resulted in significant sacrifice of sugar in favour of ethanol. While the exact quantum of sacrifice will be known only after the season has ended, as per available statistics not many sugar mills use the conventional C heavy molasses route for producing ethanol.

• Uttar Pradesh sugar mills have witnessed temperance in stock levels of sugar, owing to aggressive exports done by them last season and also on account of production of ethanol using B heavy molasses and sugarcane juice.

• On account of general good health of sugar companies cane price arrears amount has remained manageable this season as only a few groups continue delay in making the cane price payments.

Dwarikesh - Financial Scorecard: (H in Lakhs)
Particulars	2021-22		2020-21
	(H lakh)	(%)	(H lakh)	(%)
Income	1,97,723	100.00	1,84,594	100.00
EBITDA	29,396	14.87	20,835	11.29
EBDTA	26,230	13.27	16,070	8.71
EBT	21,867	11.06	11,980	6.49
EAT	15,522	7.85	9,154	4.96

• Earning before tax is at H21,867 lakhs when viewed in conjunction with that of the previous FY H11,980 lakhs). Highest EBT ever in the history of the Company.

• Earnings after tax is at H15,522 lakhs, as compared to the earnings after tax of previous FY of H9,154 lakhs. Earnings after tax of H15,522 lakhs clocked is nearly 70% more than earnings after tax of the previous year.

• Your company’s focus to rein in finance costs has been fruitful and the Company was able to rationalize finance costs.

Salient features:

• As against 378 lakh quintals during season 2020-21, your company is expected to crush around 375 lakh quintals of sugarcane during SS 2021-22. Up to 30^th April, 2022 your company has crushed 350 lakh quintals of sugarcane. While the crushing operations at DD unit culminated on the 20^th April, 2022, crushing at DN and DP unit is still continuing. However unseasonal & heavy rains & severe winter conditions with very little sunshine during winter months have dented the prospects of higher recovery.

Average gross recovery of the Company is estimated to be lesser as compared to last season, with gross recovery at DD unit lower by more than 65 basis points.

• During the SS 2021-22 company is generating B heavy molasses across all its units and thus expects to sacrifice in excess of 50,000 MTs of sugar production.

• The distillery at DN unit is optimally operational. During the ESY 2020-21, 46.0 million liters of ethanol and during FY 2021-22 55.7 million liters of ethanol was supplied to Oil Marketing Companies, a significant improvement over the previous ESY & FY. While expenditure for expansion of capacity at Distillery unit in DN unit was incurred in the earlier year, benefits are now conspicuous.

• Your company has now embarked up on a distillery project at its DD unit, Bareilly district. The 175 KLPD distillery plant based on state of art technology will use sugarcane juice / syrup and B heavy molasses as feedstock. Envisaged cost of project is H232 crores. Project execution work is in advanced stages of completion and the project is expected to go on stream during June, 2022.

• With DD distillery unit becoming operational, during season cane juice will be used as feedstock for producing ethanol and during off-season B heavy generated across all three units will be used as feedstock at both the distillery units. The sales mix & consequently the revenue stream of the Company is expected to undergo radical change in the coming years with distillery segment contributing to more than 30% of the total revenue.

• Long term debt profile: Out of soft loan of H134.48 crores availed under SEFASU 2018, funded by the State Government, balance on 30/4/2022 is H58.27 crores and out of distillery term loan availed of H116.88 crores for DN distillery unit, balance on the same date is H87.66 crores. Out of loan of H185.60 crores sanctioned for 175 KLPD distillery plant at DD unit, H131.57 crores has been availed till 30/4/2022. All term loans availed by the Company are at subsidized rate of interest.

• Rating agency ICRA, has reaffirmed the long-term rating of the Company at [ICRA]A (pronounced ICRA A plus) and during the year has revised the outlook from ‘stable'' to ‘positive''. The Company has the highest rating of A1 also from ICRA for its CP program of H300 crores.

• Sugar prices were range bound throughout the year. While there was spurt in the price between August, 2021 and November, 2021 the same moderated again with

the arrival of sugar produced during SS 2021-22 in the market.

• During the year your company exported 25,000 MTs of raw sugar under the OGL scheme. It must be reiterated here that neither any quota was allocated to sugar mills nor was any subsidy given by Government for export, unlike in the previous years.

• Your company is constantly evaluating avenues of revenue maximization and cost optimization. Your company’s name is synonymous with efficiency as the Company has clocked highest recoveries year after year by focusing on efficiency both in cane management & plant operations. Your company’s commitment to efficiency enhancement is resolute & unwavering. It is a matter of concern that that the wonder variety Co 0238 has become prone to red rot pest attack, more so in Eastern & Central Uttar Pradesh. The same has had devastating effect on both sugar cane yield and sugar recovery. The command area of DD was also impacted. Efforts on war footing are on to replace the said variety in the command area of DD unit and it is expected that over the next three years the density of Co 0238 variety will be reduced to 30% and other newer & improved varieties increased to 70%. In the command areas of DN & DP units where the menace of red rot pest is not so alarming, efforts are on to increase the longevity of variety Co 0238 and simultaneously introduce newer varieties in a phased manner.

CANE & SUGAR POLICY

The main policies of the government in relation to the sugar

industry during the year were:

a. The Fair & Remunerative Price (FRP) until SS 2017-18 was linked to a recovery of 9.50%. Effective SS 2018-19, FRP has been linked to a recovery of 10%. While the FRP for SS 2020-21 was H285 per quintal for SS 2021-22 the same stands increased to H290 per quintal again linked to a recovery of 10%.

b. Chronology of SMP/FRP announced by the Central Government on the basis of recovery is given herein under:

Season	SMP/F&RP H/ Quintal
2000-01(SMP)	59.501
2001-02	62.051
2002-03	64.501
2002-03 (Revised)	69.501
2003-04	73.001
2004-05	74.501

Season	SMP/F&RP H/ Quintal
2005-06	79.50&
2006-07	80.25&
2007-08	81.18&
2008-09	81.18&
2009-10 (SMP since	129.84@
replaced by F&RP)
2010-11	139.12@
2011-12	145.00@
2012-13	170.00@
2013-14	210.00@
2014-15	220.00@
2015-16	230.00@
2016-17	230.00@
2017-18	255.00@
2018-19	275.00#
2019-20	275.00#
2020-21	285.00#
2021-22	290.00#

* Linked to recovery of 8.50%

& Linked to recovery of 9.00%

@ Linked to recovery of 9.50%

# Linked to recovery of 10.00%

c. All sugar mills in Uttar Pradesh are required to pay State Administered Price (SAP). For 4 successive crushing seasons up to the crushing season 2020-21 the State Government of Uttar Pradesh announced SAP, which remains unchanged @ H315 per quintal for general variety of Sugarcane, H325 per quintal for early variety of sugarcane & H310 per quintal for rejected variety of sugarcane. For crushing season 2021-22, State Government of Uttar Pradesh has announced increase of H25 per quintal across all varieties.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the Company.

MATERIAL CHANGES ANDCOMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

During the year, the Company has embarked upon a project to set up a 175 KLPD distillery at its Dwarikesh Dham Unit, Dist. Bareilly, Uttar Pradesh. The proposed distillery will utilize sugarcane juice / syrup as its principal feedstock during the cane crushing season and turn to B Heavy molasses route (or grain) during the off season for continuous manufacture of ethanol. The project is under implementation & progress

is as per schedule. It is likely to be completed & operational during June, 2022.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

No significant & material orders have been passed impacting the going concern status & Company’s operations in future.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls commensurate with its size, scale and operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the management, no reportable or significant deficiencies, no material weakness in the design or operation of any control was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are re-enforced on an ongoing basis. The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

SHARE CAPITAL

The paid-up Equity Share Capital as at March 31, 2022 stood at H18.83 crores. During the year under review, the Company has not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity or warrants.

As on March 31, 2022, none of the Directors of the Company hold instruments convertible into Equity Shares of the Company.

COMMERCIAL PAPER

The Company had issued Commercial Paper during the year amounting to H250 crores. Out of the mentioned amount, H150 crores has already been redeemed & the balance outstanding stands at H100 crores.

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, the Company have placed a copy of the Extract of Annual Return

of the Company in form MGT-9 on its website at: https:// www.dwarikesh.com/pdf/2022/FORM-MGT-9-2021-22.pdf

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company met five (5) times during the year on May 12, 2021; July 29, 2021; October 25, 2021; January 31, 2022 and March 29, 2022.

SUBSIDIARY COMPANY’S REPORT

The Company does not have any subsidiary in terms of provisions of Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions entered during the financial year were in the ordinary course of business and at arm’s length basis. There were no materially significant Related Party Transactions with the Company’s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as required to be provided under Section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure I.

The Board of Directors of the Company on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules thereunder and the Listing Regulations and placed on below mentioned weblink: https://www.dwarikesh.com/pdf/2018/Related-Party-Transactions-Policy-1.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any loans or investments or given guarantees or provided securities under Section 186 of the Act during the year.

PUBLIC DEPOSITS

The Company did not have any fixed deposits at the beginning of the year nor has it accepted any deposited during the year in terms of Section 74 of the Companies Act, 2013.

MSME RETURN

MCA vide order dated 22^nd January, 2019 directed all companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days during the year. The Company is not required to file MSME Return as all payments have been done within prescribed time.

PARTICULARS OF EMPLOYEES AND RELATED INFORMATION

In terms ofthe provision ofSection 197(12) ofthe Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above rules are provided in Annexure II.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Changes in Directors and Key Managerial Personnel

The term of Shri G. R. Morarka have expired on January 01, 2022 and after the performance evaluation and as per recommendation of Nomination & Remuneration Committee, he is proposed to be re-appointed for a term of 5 years in this AGM.

Shri B. J. Maheshwari, Managing Director & CS cum CCO, retiring by rotation & being eligible offers himself for reappointment.

Brief profile of the directors seeking appointment or reappointment is annexed to the Notice of Annual General Meeting as stipulated under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).

During the year, Shri Alok Lohia resigned as the CFO of the Company w.e.f. June 29, 2021 & Shri Sunil Kumar Goel was appointed as the CFO of the Company in the Board meeting held on October 25, 2021 with immediate effect.

B. Declaration by an Independent Director(s), ReAppointment & Meeting

Pursuant to the requirements of Section 149(7) of the Companies Act, 2013, the Company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in Section 149(6) of the Companies Act, 2013.

The Independent Directors met once i.e. on January 31, 2022. The Meeting was conducted without the presence of the Chairman, Executive Directors and any other Managerial Personnel.

C. Formal Annual Evaluation

Pursuant to the requirements of Section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of the listing regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of its Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

D. Policy on Directors’ Appointment and Remuneration including criteria for determining qualifications, positive attributes, independence of a Director, Key Managerial Personnel and other employees

In line with the principles of transparency and consistency, your Company has adopted the following policies which, inter alia includes criteria for determining qualifications, positive attributes and independence of a Director.

Policy on Directors appointment and remuneration is available on company’s website at

https://www.dwarikesh.com/pdf/2018/Policy-on-

Directors-Appointment-and-Remuneration.pdf

E. Statement of Director’s Responsibilities

As required under the provisions of Section 134(3)(c) of

the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis;

e. the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement), Management Discussion and Analysis Report for the year under review is presented in a separate segment which is forming part ofthe Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Dwarikesh has been an early adopter of CSR initiatives. The Company works primarily through CSR trust, viz R R Morarka Charitable Trust, towards supporting projects in eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environmental sustainability, disaster relief and rural development projects.

Details of the CSR policy are available on our website at https://www.dwarikesh.com/pdf/2021/Policy-on-Corporate-Social-Responsibility.pdf A detailed Annual Report on CSR Activities undertaken by the Company during the year as prescribed under the Companies (Corporate Social Responsibility) Amendment Rules, 2021 is annexed herewith as Annexure III.

RISK MANAGEMENT POLICY

As per Regulation 21 of the SEBI Listing Regulations, the top 1000 listed entities, determined on the basis of market capitalization has to constitute a Risk Management Committee. Risk Management Committee of the Company is responsible to review and combat the risk on periodical basis. A detailed note on Risk Management policy, elements of risk and its mitigation is comprised in Corporate Governance Report.

VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy, as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, in the Board meeting held on May 9, 2014 so as to enable the Directors, Employees and all Stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimization of persons who use such mechanism and make provisions for direct access to the Chairman of Audit Committee. The details of the said policy is explained in the Corporate Governance Report and has been uploaded on the website of the Company at

https://www.dwarikesh.com/pdf/2018/Whistle-Blower-

Policy.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,

PROHIBITION AND REDRESSAL) ACT, 2013

The Company has put in place a policy on Anti Sexual harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

No complaints have been received during the year under review.

CORPORATE GOVERNANCE

As per Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance is provided under Annexure IV.

BOARD COMMITTEE

The Company has following mandatory Committees, viz,

1. Audit Committee

2. Stakeholders’ Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure V and form a part of this report.

AUDITORS

A. STATUTORY AUDITORS & AUDITOR’S REPORT

M/s. NSBP & Co., Chartered Accountants, New Delhi (Firm Registration No. 001075N) who were appointed as the Statutory Auditors of the Company at the AGM held on 19^th August, 2017 retires at this Annual General Meeting after completing their term of 5 years. As per Section 139(2) of the Companies Act, 2013, the Audit committee and board of directors have proposed and recommended to appoint M/s. Mittal Gupta & Co., Chartered Accountants having Firm Reg. No. 01874C, Kanpur, as statutory auditors of the Company by seeking members’ approval for a term of 5 consecutive years. The Company has received their written consent and a certificate that they satisfy the criteria provided

under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder. Also, peer review certificate have been obtained from the proposed Auditors.

The Auditors’ Report for the financial year March, 2022 is unmodified, i.e, it does not contain any qualification, reservation, adverse remark or disclaimer. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year under review.

B. COST AUDITORS

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and rules made thereunder, the Board on the recommendation of the Audit Committee has re-appointed M/s. Ramanath Iyer & Co, Cost Accountants (Firm Regn No. 000019), as Cost Auditors to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended March 31, 2022. The Cost Accountants have confirmed that their appointment is within the limits of Section 141(3)(g) of the Act and free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013.

The Cost Audit Report for the financial year March, 2021 did not contain any qualification, reservation, adverse remark or disclaimer. The Cost Audit Report for the year end March, 2022 shall be made available by Cost Auditors on or before September 30, 2022.

C. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. VKM & Associates, a Practicing Company Secretary (Certificate of Practice no. 4279), Secretarial Auditor to undertake the Secretarial Audit of the Company for the year ended March 31, 2022. The Secretarial Audit Report is appended to this Report as Annexure VI.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

BUSINESS RESPONSIBILITY REPORT

As per SEBI (LODR), Fifth Amendment Regulations, 2019, Business Responsibility Report is mandatory for Top 1000 listed Companies. Our ranking based on Market Capitalization as on 31.03.2022 on BSE is 681 and at NSE is 661. Business Responsibility Report is annexed by way of Annexure VII.

ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its members, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organization.

1

Total income during FY 2021-22 is up by 7.11% as compared to the revenue during 2020-21. Improvement in revenue growth is inferable to the increased releases under the monthly release mechanism administered by the Central Government & beneficial revenue mix with additional weightage to ethanol. It is worth mentioning that the share of revenue from distillery segment to the total net revenue is 16.52% as compared to 8.74% in the previous year. Distillery plant at DN unit worked at its rated capacity while in the previous year the benefits of expanded capacity were only for a part of the year.

• EBIDTA, during FY 2021-22 is H29,396 lakhs as compared to EBIDTA of H20,835 lakhs during previous FY, nearly 41% more. Higher EBIDTA as compared to previous FY is on account remunerative sales mix with higher share of sales from distillery segment as also better performance of sugar segment. EBIDTA recorded by the Company is the highest ever.

• EBDTA, during the year under review your company earned EBDTA of H26,230 lakhs as compared to H16,070 lakhs earned in the previous FY.

---

Mar 31, 2018

Directors'' Report

The Directors take pleasure in presenting their 24^th (Twenty Fourth) Annual Report together with the audited accounts for the year ended 31^st March, 2018.

FINANCIAL RESULTS

RS, in Lakhs

Particulars	Year Ended 31.03.2018	Year Ended 31.03.2017
Gross profit before depreciation, interest & tax	15,997.16	28,792.12
Less: Depreciation	3,250.37	2,994.18
Finance Costs	2,531.14	5,249.76
Profit / (Loss) before tax and exceptional items	10,215.65	20,548.18
Add : Exceptional income (Net of taxes)	---	322.71
Profit / (Loss) before tax	10,215.65	20,870.89
Tax expenses	70.90	5,260.41
Profit /(Loss) after tax	10,144.75	15,610.48
Total comprehensive income / (loss)	10,246.64	15,524.14

TRANSFER TO RESERVES

During the year under review, no amount has been transferred to reserves.

YEAR IN RETROSPECT

Operations:

Distinguishing features of the crushing operations in your company are given below:

Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given hereunder:

DIVIDEND

Dividend of RS,1,60,57,660 (including dividend distribution tax) is recommended to be paid for the Cumulative Redeemable Preference Shares (Series I & II) in respect of the financial year 2017-18.

In view of the rapid & unexpected fall in sugar prices in the last few months resulting in near term uncertainties being faced by the sugar industry and in view of the Company''s avowed policy of protecting long term interest of the shareholders, the Directors have deemed it prudent to plough back the profits and therefore not recommended payment of any equity dividend for the financial year 2017-18.

(FY 2017-18 (From 01.04.2017 to 31.03.2018), includes a small part of season 2016-17 and a major part of season 2017-18)

Particulars	2017-18	2016-17	% Change
Crushing (Lakhs/Quintals) - total at all three units	323.81	260.74	24.19
Recovery % (Combined)	11.84	11.71
Production (Lakhs/Quintals) - total at all three units	38.33	30.34	26.33

- Impressive recoveries on account of superior varietal mix, with increasing thrust on early maturing varieties such as Co 0238. Impressive recovery in spite of early start of the crushing season.

- During the ongoing season of 2017-18 both DP & DD units are poised to clock the highest ever recovery. Group recovery highest in North India during season 2016-17 and among the highest till 15^th April, 2018 during the ongoing season.

Highlights- FY 2017-18

- Sugarcane crushing up by 24.19%.

- Small increase in recovery by 0.13% (from 11.71% to 11.84%)

- Sugar production up by an impressive 26.33%

- Higher yield across Uttar Pradesh resulted in higher sugarcane availability.

Particulars	2017-18	2016-17
Crushing (Lakh/Quintals) - total at all three units	337.28	283.40
Recovery % (Combined)	11.90	11.78
Production (Lakh/Quintals) - total at all three units	39.81	33.33

Crushing season 2017-18 is yet not consummated. Comparison of season 2017-18 (up to 25^th April, 2018) & full season 2016-17 is as below:

Performance of cogeneration division: Metrics of power sold:

Unit	2017-18 (01.04.2017 to 31.03.2018)			2016-17 (01.04.2016 to 31.03.2017)
	Power sold in lakhs units		Amount in H Lakhs	Power sold in lakhs units	Amount in H Lakhs
DN	308.19	1,470		278.66		1,273
DP	682.62	3,283		561.30		2,868
DD	946.51	4,553		745.84		3,811
Total	1,937.32	9,306		1,585.80		7,952

During the ongoing season 2017-18 (up to 30^th April, 2018), value of power evacuated to the power grid is B94.96 crores (19.63 crore units)

- Raw sugar prices had reached the lowest since 2008 - around 10.50 cents per pound in 2015 but thereafter rebounded and traded between 22 and 23 cents per pound in September 2016. However, this rally was short-lived; sugar prices crashed to between 11 and 12 cents per pound. Correspondingly, the London White variety that hovered around 540 USD PMT in September 2016 declined to 325 USD PMT.

India story

- India''s production was 20.3 million tons during 2016-17; in sugar season 2017-18, this is expected to cross 31.5 million tons following several upwards revisions. The sugar output in Maharashtra rebounded from 4.2 million tons in season 201617 to 10 million tons-plus; Uttar Pradesh, which had reported an impressive 8.8 million tons production, coupled with a recovery of 10.62% in season 2016-17, now reported a projected production in excess of 11.5 million tons in season 2017-18. This rebound was largely the result of remunerative cane prices inspiring a large allocation of farm area at a time when other crops delivered weak returns. In addition to larger farm space, most producers reported

Performance of Distillery:

During the year 86.90 lakh liters of industrial alcohol (previous period 79.65 lakh liters)was produced and 64.06 lakh liters of the same amounting to RS,24.91 crores (previous period 82.10 lakh liters amounting RS,33.49 crores) was sold at Dwarikesh Nagar unit of the Company.

SUGAR INDUSTRY - YEAR AT A GLANCE.

Global perspective

- A bumper cane crop across most sugar producing countries coupled with moderate consumption growth in the regions translated into a global sweetener glut in the sugar season 201718. Even as the latest and precise estimates are awaited, the most recent International Sugar Organization''s global production estimate indicates a 180 million tons-plus, the highest global output. There is every possibility that production could be higher, leading to an output surplus of almost 10 million tons. This record output was the result of India, Brazil and Thailand reporting hefty production increases. India was a large contributor to this reality as sugar production exceeded consumption by a vast estimate.

superior yields. The result was that virtually every single sugar producing state in India delivered its highest sugar production during the 2017-18 season.

- With sugar production being unprecedented and consumption virtually stagnant across India, the result was a substantial glut. Sugar companies that were attractively profitable as recent as only a couple of years ago, now address a grim near-term outlook. The glut translated into a meltdown in sugar realizations: prices of above B3,700 per quintal in late December 2017 crashed by nearly B800 to B900 per quintal in the space of a couple of months, stretching sectoral financials. Even as the country''s sugar production crossed 30 MT, a number of serious and committed sugar mills continued to crush cane into the summer at low recoveries that threatened their viability even further.

- The cyclicality of the Indian sugar industry was aggravated by the decision of the government to influence cane costs and preventing free market forces from finding their own level. The sustained increase in raw material costs dictated by the government had a disproportionate impact on production, which in turn had a sensitive influence in market realizations.

- The outlook for season 2018-19 appears challenged: the country faces its second successive bumper production season based on cane initial planting indicators. The second successive year of record output indicates that sugar realizations could stay considerably subdued, threatening sectoral viability and the ability of sugar mills to remunerate cane farmers on schedule. The Central Government and State Government addressed this sharp and sudden decline in sugar prices through a series of initiatives. The Central Government introduced reverse stock holding limits, raised import duty to 100% and abolished sugar export duty to arrest the price decline, which at best had a fleeting impact as the production proved way too large to absorb.

- The Central Government ordered compulsory export of 2 MTs of sugar under the MIEQ scheme. The Central Government has also announced granting a financial assistance of RS,5.50 per quintal of cane crushed to enhance the ability of sugar mills to clear their sugarcane dues. A higher production estimate, estimated year-end stock of more than 10.5 MTs (without considering exports) and evacuation of 2 MTs of sugar appear unlikely to strengthen weak sugar realizations.

- The Central Government strengthened the sugar ancillary business of ethanol manufacture. The ethanol procurement price was increased from RS,39 per liter to RS,40.85 per liter and there is an expectation of a second ethanol price increase coupled with a reduction in GST rate that could strengthen prospects for this business segment.

- Given the prevailing sectoral reality, sugar cane arrears crossed RS,10,000 crores in Uttar Pradesh and around RS,20,000 crores across the country by end-April 2018, with every fear that the eventual number would be considerably higher.

Uttar Pradesh report card

- The SAP for season 2017-18 as announced by the government was higher by B10 per quintal vis-a-vis season 2016-17. SAP for the general variety was B315 per quintal, the early variety B325 per quintal and for the rejected variety B310 per quintal. Society commission was pegged at 2% of the FRP, or B5.10 per quintal.

- Even as the SAP increase for the sugar season 2017-18 was only 3%, even this proved excessive at a time of declining sugar prices. The arbitrary SAP announced in the earlier years has affected the delicate sectoral balance. Encouraged by the prospect of reporting higher incomes, farmers planted more sugarcane than ever. The farmers thereafter reported superior cane yield through the sowing of Co 0238 in Uttar Pradesh. The combination of these realities translated into record cane and sugar output in Uttar Pradesh, aggravating the national excess.

- Even as the decline in sugar prices was not enough, the industry suffered a near-100% collapse in molasses prices. The result is that through much of the sugar season under review, molasses was disbursed virtually free and many sugar mills offered to bear transportation costs to deliver molasses to buyers. This decline in the price of molasses from RS,400 per quintal in the previous year aggravated sectoral profitability. Besides, the higher cost of transporting molasses made ''export'' to southern states unviable.

- The Uttar Pradesh sugar industry, which had posted a positive turnaround in early 2016 is now at a crossroads. Sugar prices have dropped by more than B800 per quintal in the space of just a few months, even as Central and State Governments have initiated a series of measures to reverse market sentiment. However, there is a general feeling that Government measures may not be adequate in the face of the staggering production estimates. The Uttar Pradesh sugar industry has also appealed to the State Government to grant subsidies, which could be directly paid to farmers in lieu of their cane dues.

- The reality is that most Indian sugar mills do not possess adequate bank limits to address cane purchases or payments while the stronger mills are seeing an erosion in working capital mobilization capability following a continuous decline in sugar realizations. This augurs challenging times for the industry and the prospect is that only the integrated and highly efficient among the country''s sugar mills will be in a position to weather the impact of the downtrend.

Your company has been clocking the impressive recovery, season after season and is considered to be among the most efficient sugar producer across the Nation. Process losses recorded at its plants are also among the lowest in the industry. Your company is also largely long-term debt free having done accelerated prepayment of its debts. With such inherent strengths your company is better equipped to deal with the adversities and when the tide turns will obviously be advantageously placed.

- The reassuring news though is that the Governments (both Central & State) are abreast and well-informed of the crisis engulfing the industry and are keen to ensure viability of the industry such that interests of all stakeholders is not endangered. A series of measures have already been initiated with prospects of more announcements very soon so that industry bounces back to robust health

Dwarikesh - Financial Scorecard:
Particular	2017-18		2016-17
	Lakhs	%	Lakhs	%
Gross revenue	145,828		125,610
less: Excise duty	2,833		6,570
Net revenue (from operations)	142,995	100.00%	119,040	100.00%
EBIDTA	15,997	11.19%	29,115	24.46%
EBDTA	13,466	9.42%	23,865	20.05%
EBT	10,216	7.14%	20,871	17.53%
EAT	10,145	7.09%	15,610	13.11%
Total comprehensive income	10,247	7.17%	15,524	13.04%

*Exceptional income of Nil (Previous year RS,323 Lakhs) is added to EBIDTA and EBDTA

creating a glut like situation. Sugar prices have crashed from a high of RS,3,700 per quintal during late 2017 to RS,2,700 per quintal now, an unprecedented decline.

- Higher than estimated production (far in excess of estimated consumption) has created structural imbalances. With no parity with global prices, the possibility of exports is bleak unless the same is supported by the Government by way of some financial assistance.

- The company started its crushing operations early and is on the threshold of crushing record quantity of sugarcane and producing record quantity of sugar. However the industry is unable to reap the benefits of economies of scale as the sugar prices are on downward spiral. The working of power segment though is satisfactory, as commensurate with the higher crushing the Company has been able to evacuate more power to the state grid.

- Your company continues to maintain loftiest standards of efficiencies and has been relentless in its pursuit to clock the best possible recoveries. Process losses recorded at its plants are also among the lowest in the industry. While macro factors such as sugar prices etc. are beyond the realm of company''s control,

- EBDITA, during FY 2017-18 both in absolute numbers and in % terms has declined as compared to the EBIDTA during previous period. Margin of EBIDTA is 11.19% vis- a-vis margin of 24.46% in the previous year. In absolute numbers the EBIDTA amount is RS, 15,997 lakhs as compared to EBIDTA amount of RS,29,115 lakhs in the previous FY. While power & distillery segments have clocked better EBIDTA, the sugar segment has reported lesser EBIDTA mainly on account of unexpected & steep fall in the price of sugar during the latter part of the FY 2017-18.

- During the year under review your company earned EBDTA of RS,13,466 lakhs as compared to RS,23,865 lakhs earned in the previous FY.

- Earning before tax when viewed in conjunction with that of the previous FY has also declined.

- Earnings after tax is RS, 10,145 lakhs. In % the same is 7.09% of the net revenue

Main reasons for the decline in profitability are:

- Steep & unexpected fall in price of sugar post January, 2018. All initial estimates of production of sugar have gone haywire and the country is poised to now produce record quantity of sugar company has kept a tight leash on its costs and is minimizing the collateral damage by being a cost efficient sugar producer in the country.

- Your company is relentlessly making efforts to trim its debt profile and reduce its long-term debt burden with a view to keep the interest cost under control. Not only has the company been able to reduce its long term debt with some aggressive and accelerated debt repayment program, the company has had the benefit of lower rate of interest on account of its improved credit rating. The long term loans of the company are rated ''A'' ( ) with stable outlook and commercial paper program (short term) been accorded the highest rating of A1 by ICRA. The company has been able to substantially reduce its finance cost during the FY 2017-18.

CANE & SUGAR POLICY

The main policies of the government in relation to the sugar industry during the year were:

a) Hitherto applicable levy and free sale sugar ratio of 10:90 for the period up to 31^st March, 2013 has since been abolished pursuant to adoption of recommendations contained in the report of Dr. Rangarajan. The sugar mills are now eligible to sell their entire production as free sale sugar.

b) The Fair & Remunerative Price (FRP) for the crushing season 2016- 17 was B230 per quintal which has been increased to B255 per quintal for 2017-18, where both are linked to recovery @ 9.50%.

c) Chronology of SMP /FRP announced by the Central Government on the basis of recovery is given herein under:

* Linked to recovery of 8.50%

& Linked to recovery of 9%

@Linked to recovery of 9.50%

d) The Company is required to pay State Administered Price (SAP) for the crushing season 2017-18, the State Government of Uttar Pradesh announced SAP of B315 per quintal for general variety of Sugarcane, B10 per quintal is extra payable for early variety & B5 per quintal is less payable for rejected variety.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No Material changes have occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

No significant & material orders have been passed impacting the going concern status & Company''s operations in future.

INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial control in place. The Company has got robust systems in place to ensure prepayment audits of transactions, concurrent internal audit of all transactions of various segments of activities of the company.

SHARE CAPITAL

During the year under review, Company had split shares in the ratio of 1:10 (i.e 10 equity shares of B1 each for every one share of B10 held) and simultaneously reduced the nominal value of shares from B10 to B1. As a result of which the equity share capital of the company remains the same.

The Company redeemed 10,00,000 (Ten Lakhs) Cumulative Redeemable preference shares of B100 each (Series III) on 30^th September, 2017.

Season	SMP/F&RP H / Quintal
2000-01(SMP)	59.50*
2001-02	62.05*
2002-03	64.50*
2002-03 (Revised)	69.50*
2003-04	73.00*
2004-05	74.50*
2005-06	79.50&
2006-07	80.25&
2007-08	81.18&
2008-09	81.18&
2009-10 (SMP since replaced by F&RP )	129.84@
2010-11	139.12@
2011-12	145.00@

Season	SMP/F&RP H / Quintal
2012-13	170.00@
2013-14	210.00@
2014-15	220.00@
2015-16	230.00@
2016-17	230.00@
2017-18	255.00@

RISK MANAGEMENT POLICY

The Company has Risk Management Committee to review and combat the risk on periodical basis. A detailed note on risk management policy, elements of risk and its mitigation is comprised in this Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has put in place a policy on Anti Sexual harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

No complaints have been received during the year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Related party transactions that were entered during the financial year were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company''s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed herewith and marked as Annexure IV.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules thereunder and the Listing Regulations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Changes in Directors and Key Managerial Personnel

Shri G R Morarka has resigned from the post of Managing Director w.e.f 18^th April, 2018 owing to his health issues and has been advised by Doctors to take rest for few months. The Board has recorded its sincere appreciation for the valuable services rendered by him.

Shri B J Maheshwari, Director retiring by rotation and being eligible offers himself for re-appointment.

The Company also redeemed 5,00,000 (Five Lakhs) Cumulative Redeemable preference shares of RS,100 each (Series IV) on 30^th March, 2018.

EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No. MGT - 9 is annexed as Annexure I

CORPORATE SOCIAL RESPONSIBILITY

Dwarikesh has been an early adopter of CSR initiatives. The Company works primarily through its CSR trust, viz R R Morarka Charitable Trust, towards supporting projects in eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environmental sustainability, disaster relief and rural development projects. Details of the CSR policy are available on our website at www.dwarikesh.com. The annual report on our CSR activities is appended as Annexure II to the Board''s report.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, five Board Meetings were held.

VIGIL MECHANISM

The Company has adopted policy on Vigil Mechanism in the Board meeting held on May 9, 2014 so as to bring to the attention of the management, the concerns about behavior of employees that raise concerns including fraud by using the mechanism provided in the Whistle Blower Policy. The details of the said policy are included in the Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

No Loans, Guarantees or investments are made under Section 186 of the Act during the year.

PARTICULARS OF EMPLOYEES AND RELATED INFORMATION

In terms of the provision of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above rules are provided in Annexure III.

PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 74 of the Companies Act, 2013. The Company did not accept any deposits during the year.

Policy on Directors nomination and remuneration is available on company''s website at http://www.dwarikesh.com/pdf/2018/ Policy-on-Directors-Appointment-and-Remuneration.pdf.

STATEMENT OF DIRECTOR''S RESPONSIBILITIES

As required under the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that year;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively,

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulations 34 of SEBI (Listing Obligation and Disclosure Requirement), Management Discussion and Analysis Report for the year under review is presented in a separate segment which is forming part of the Annual Report.

CORPORATE GOVERNANCE

As per Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement), a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance is provided under Annexure V.

BOARD COMMITTEE

The Company has following mandatory Committees, viz,

1. Audit Committee

B. Declaration by an Independent Director(s) and reappointment

Pursuant to the requirements of Section 149(7) of the Companies Act, 2013, the company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in Section 149(6) of the Companies act, 2013.

All the three independent directors are appointed/re-appointed in the meeting of Board of Directors held on August 13, 2014 for a period of 5 years as per the requirements of section 149 of the Companies act, 2013.

C. Formal Annual Evaluation

Pursuant to the requirements of Section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of the listing regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors were carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

D. Policy on Directors'' Appointment and Remuneration Including Criteria for Determining qualifications, Positive Attributes, Independence of a Director, Key Managerial Personnel and Other employees

Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields.

2. Stakeholders'' Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134 (3)(m) of the Companies Act, 2013, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure VI and form a part of this report.

SUBSIDIARY COMPANY''S REPORT

The Company does not have any subsidiary in terms of provisions of Companies Act, 2013.

AUDITORS & AUDITOR''S REPORT

Pursuant to the provisions of Section 139(2) of the Companies Act, 2013 and rules made thereunder, M/s. NSBP & Co., Chartered Accountants, New Delhi (Firm Registration No. 001075N) were appointed as Statutory Auditors of the Company for period of 5 years, to hold office up to the conclusion of 28^th Annual General Meeting of the company, subject to ratification of their appointment at every subsequent Annual General Meeting.

A certificate from Statutory Auditors has been received to the effect that their appointment as Statutory Auditors of the Company, if ratified at ensuing Annual General Meeting, would be according to the terms and conditions prescribed under Section 139 of the Act and Rules thereunder.

The Auditors'' Report for the financial year March, 2018 does not contain any qualification, reservation, adverse remark or disclaimer. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year under review.

COST AUDITORS

Pursuant to the provisions of section 148 of the Companies Act, 2013 and rules made thereunder, the Board on the recommendation of the Audit Committee has re-appointed M/s. Ramanath Iyer & Co, Cost Accountants as Cost Auditors to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended March 31, 2019.

The Cost Audit Report for the financial year March, 2017 did not contain any qualification, reservation, adverse remark or disclaimer. The Cost Audit Report for year end March, 2018 shall be made available by Cost Auditors on or before September 30, 2018.

SECRETARIAL AUDIT REPORT

A Secretarial Audit Report given by M/s. VKM & Associates, a company secretary in practice is received and annexed herewith as Annexure VII. There are no qualifications, reservation or adverse remarks or disclaimer in the Secretarial Audit Report.

ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its members, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organization.

By Order of the Board

For DWARIKESH SUGAR INDUSTRIES LIMITED

B J Maheshwari Vijay S Banka

Managing Director & CS cum CCO Managing Director & CFO

(DIN - 00002075) (DIN - 00963355)

Place: Mumbai

Dated: May 7, 2018

---

Mar 31, 2017

The Members of the Company,

The Directors take pleasure in presenting their twenty third Annual Report together with the audited accounts for the year ended 31st March, 2017.

1. Financial Results Rs. in Lakhs

Gross profit before depreciation, interest & tax	Year Ended 31.3.17	Year Ended 31.3.16
	28,079.88	11,683.04
Less: Depreciation	2,994.18	3,076.46
Finance Costs	4,193.75	5,159.02
Profit / (Loss) before tax and exceptional items	20,891.95	3,447.56
Add : Exceptional income (Net of taxes)	322.71	491.83
Profit / (Loss) before tax	21,214.66	3,939.39
Less: Provision for taxes (Net of MAT credit entitlement)	144.14	9.55
Deferred tax liability / (asset)	5,224.02	33.21
Profit /(Loss) after tax	15,846.50	3,896.63

2. Dividend

Your directors have recommended equity dividend of RS.10/- per share (100%) for the year 2016-17 aggregating to RS.2,266.35 Lakhs (including dividend distribution tax)

The dividend on Cumulative Redeemable Preference Shares (Series I, II, III & IV) is accumulated and is recommended to be paid with arrears thereon in this year aggregating to RS.1,828.23 Lakhs (including dividend distribution tax), since the company has earned adequate profits in the year 2016-17.

3. Year in Retrospect

Operations:

Distinguishing features of the crushing operations in your company are given below:

- Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given hereunder:

FY 2016-17 (From 1.4.2016 to 31.3.2017), includes a small part of season 2015-16 and a major part of season 2016-17

Particulars	2016-17	2015-16	% Change
Crushing (Lakhs/Quintals) - total at all three units	260.74	224.65	16.07
Recovery % (Combined)	11.71	11.67	0.34
Production (Lakhs/Quintals) - total at all three units	30.34	26.28	15.44

Crushing season 2016-17 is now consummated. Comparison of full season 2016-17 & full season 2015-16 is as below: Season 2016-17 (completed season)

Particular	2016-17	2015-16	% Change
Crushing (Lakhs/Quintals) - total at all three units	283.40	210.49	34.64
Recovery % (Combined)	11.78	11.67	0.94
Production (Lakhs/Quintals) - total at all three units*	33.38	24.71	35.10

*lncluding small quantity of non-marketable (Brown) sugar.

Highlights-Season 2016-17

- Sugarcane crushing up by 34.64%.

- Small increase in recovery by 0.42%

- Sugar production up by an impressive 35.10%

- Higher crushing during 2016-17 a Pan-Uttar Pradesh phenomenon.

- Higher yield across Uttar Pradesh resulted in higher sugarcane availability. Demonetization also resulted in lesser diversion of sugarcane to alternative sweeteners.

- Impressive recoveries on account of superior varietal mix, with increasing thrust on early maturing varieties such as Co 0238. Impressive recovery in spite of early start of the crushing season

- Highest ever group recovery of 11.78% with recovery at DN plant at 12.34% and DP plant at 12.11%, accomplishing the coveted number 1 and 2 position in North India. Recovery clocked at DN and DP among the highest in India.

Performance of cogeneration division: Metrics of power sold:

Unit	Year 2016-17 (01.04.2016 to 31.03.2017)		Period 2015-16 (01.04.2015 to 31.03.2016)
	Power sold in lakhs units	Amount in D Lakhs	Power sold in lakhs units	Amount in D lakhs
DN	278.66	1,273	249	1,092
DP	561.30	2,868	567	2,830
DD	745.84	3,811	561	2,797
Total	*1585.80	*7,952	1,377	6,719

*includes sale of 6.33 lakh units (RS.29.67 lakhs) from unutilized power banked in season 2015-16

During the completed season 2016-17, value of power evacuated to the power grid is approximately D90.45 crores

Performance of Distillery:

During the year 7,964,691.2 Litres of rectified Spirit (previous period 5,701,769 Litres) was produced. The rectified spirit was further reprocessed and 6,354,581.6 Litres Ethanol (previous period 5,168,428) was produced at Dwarikesh Nagar Unit of the Company.

4. Sugar industry - year at a glance.

- The performance of India-s sugar industry was marked by a paradox in FY 2016-17. Conventionally, when the domestic sugar industry performed well, it did so uniformly across the country; this was not the case in FY2016-17 when the industry performed well in certain states and under-performed in others.

- The Indian sugar industry is characterized by cyclicality wherein bountiful years are followed by weak years. In this agriculture sector, lower cane output usually translates into a lower sugar production which in turn corrects the country-s sugar supply vis a vis demand, strengthening sugar realizations. When mills begin to report higher surpluses, cane arrears to farmers are cleared and there is a larger inducement to grow more sugarcane. In the next cyclical leg, this inducement to plant more cane inevitably enhances cane planting leading to a higher sugar production a couple of seasons later. When higher output moderates sugar realizations, mills relatively under-perform which could enhance cane arrears, culminating in farmers being discouraged to grow low sugarcane quantities.

During the last few years, there was no reduction in sugarcane planting area in Uttar Pradesh as the annual increase in sugarcane remuneration paid to farmers enhanced farmer viability and cane planting even as the sector was marked by high accumulated arrears.

During FY 2016-17, the country-s sugar production was impacted by drought in Maharashtra. While Maharashtra and Karnataka sugar manufacturers were affected by sub-optimal rainfall on the one hand, Uttar Pradesh sugar manufacturers reported superior production.

- The Central Government and ISMA were compelled to revise their production estimates on a number of occasions in the course of a single season as drought in Southern India during FY 2015-16 blurred production outlook. The result was that Maharashtra and Karnataka sugar production estimates continued to shrink even as Uttar Pradesh estimates continued to improve. It is now estimated that sugar season FY 2016-17 will report production of around 20 million tons compared with 25.1 million tons produced in FY 201516, a substantial decline. The reality is that Maharashtra-s sugar production nearly halved when compared with the previous year, while Uttar Pradesh-s output increased over 28%.

The result was that the Indian sugar industry reported a mixed year, marked by an encouraging performance in Uttar Pradesh but weak output in Maharashtra, Karnataka and Tamil Nadu.

- The Uttar Pradesh government strengthened the sugar industry-s viability with the announcement of a reasonable increase of RS.25 per quintal in the state advised price (SAP) for season 2016-17. However, the State Government withdrew benefits to the sugar industry like waiver of purchase tax, entry tax and society commission. Besides, the two-tier payment mechanisms that had been provided earlier were also done away with.

The responsible handholding by the Central and State Governments played a crucial role in the sugar industry-s revival in Uttar Pradesh. The government focused on the timely clearance of cane price paid to farmers and improved sugarcane yields.

- The year under review was marked by a domestic production deficit as well as a projected global deficit of nearly 5 million tons. While international prices peaked in September, 2016, domestic prices staged an extended recovery. NY Raw, which had declined to a low of 10.5 cents per pound, traded at nearly 23 cents in September 2016. Domestic prices ranged broadly between RS.3,500 to RS.3,600 per quintal marked by occasional spikes and declines. The Uttar Pradesh sugar sector reported higher volumes coupled with improved realizations; the industry in Southern and Western India suffered lower volumes and sub-optimal capacity utilization. However it would be relevant to indicate that despite a recovery in Uttar Pradesh, a number of sugar companies in that state were not able to translate the sectoral rebound into improved Balance Sheet hygiene.

- Uttar Pradesh sugar companies reported attractive improvements in operating recoveries. The average State recovery was 10.50% or higher compared to 9.25% and 9.50% recovery recorded in the earlier years. Sugar mills in Uttar Pradesh engaged in a number of cane development initiatives comprising propagation of the early maturing variety, trench farming, autumn planting etc.

These initiatives helped improve recovery and yields, which in turn, increased farmer incomes. The industry is increasingly convinced that the Government-s vision to double farmer incomes by 2022 can be achieved by optimizing the varietal mix, maximizing planting of the proven Co 0238 variety.

- Timely Central Government interventions and policies endeavored to ensure that sugar prices were largely stable and affordable. Concerned with the depleting national sugar inventory, the Central Government announced a duty-free import of 500,000 metric tons. However, the allotment of the imported quantity was focused largely on sugar-deficit regions, facilitating equitable distribution. The consignments of imported sugar and correction in the international sugar prices kept domestic prices range-bound in FY 2017-18.

- The Central government-s 10% ethanol blending program was taken up in earnest; being a plan with long-term implications, this decision could take time to yield results. During 2017, Central Government reduced the ethanol procurement price and transactional bottlenecks were addressed. For the program to be successful in the long term, the Government plans to link ethanol procurement prices with international oil prices.

- The year FY 2016-17 was marked by two historic national moments, both relevant to the Uttar Pradesh sugar industry. The first defining moment was the currency demonetization announced on 8 November, 2016, intended to enhance financial transparency. The immediate fall out of this measure was a lower diversion of sugarcane to alternative sweeteners, which increased the availability of sugarcane to sugar mills. Temporarily, demonetization resulted in sluggish demand and declining sugar realizations, but the sector regained its momentum in a matter of months. The second important development was the election of the BJP Government in Uttar Pradesh. With the Central and State governments now of the same political affiliation, there is an expectation that policies will be cohesive and growth-oriented for the sugar industry in Uttar Pradesh, catalyzing the rural economy. The state sugar industry believes that the next positive reform initiative could comprise a linking of the cane cost to the sugar price, ensuring a linkage of sectoral fortunes to raw material costs and evolving vendors into partners.

- The FY 2016-17 was a buoyant one for the sugar industry in Uttar Pradesh. After an extensive trough, the sugar industry encountered fresh hope, marked by improved financials, plans of business development and business consolidation. One of the positives to emerge from the extended slowdown was the progressive de-risking and risk-averse industry planning. The industry is increasingly focused on efficiency enhancement, value-addition and fiscal consolidation leading to business sustainability.

Dwarikesh - Financial Scorecard:

Particular	2016-17		2015-16
	Lakhs	%	Lakhs	%
Gross revenue	125,610		83,151
less: Excise duty	6,570		3,717
Net revenue (from operations)	119,040	100.00%	79,434	100.00%
EBIDTA	28,403	23.86%	12,175	15.33%
EBDTA	24,209	20.34%	7,016	8.83%
EBT	21,215	17.82%	3,939	4.96%
EAT	15,847	13.31%	3,897	4.91%

*Exceptional income of RS.323 lakhs (Previous year RS.492 Lakhs) is added to EBIDTA and EBDTA

The numbers for the year under review make impressive comparison with the numbers of the previous period.

- EBDITA, both in absolute numbers and in % terms is significantly better than in the previous period. Margin of EBIDTA is 23.86% vis-a-vis margin of 15.33% in the previous year. In absolute numbers the EBIDTA amount at RS.28,403 lakhs is 133% more than the EBIDTA amount of RS.12,175 lakhs in the previous FY.

- During the year under review your company earned EBDTA of RS.24,209 lakhs as compared to RS.7,016 lakhs earned in the previous FY, an increase of over 245%.

- Earning before tax when viewed in juxtaposition with that of the previous FY is also impressive.

- Earnings after tax is RS.15,847 lakhs. In % the same is 13.31% of the net revenue. This may be seen in conjunction with EAT of RS.3,897 lakhs earned in the previous FY.

Standout reasons for the better performance are:

- Liquidation of low cost stock carried forward from the previous FY. Sugar price continued to be buoyant. Sugar season 2016-17 was a deficit year both internationally and domestically.

- With the restoration of sugar balance, the sugar sales was brisk and healthy. Your company sold in excess of 29.69 lakh quintals of sugar as compared to 25.86 lakh quintals sold in the previous FY. Average price at which sugar was sold was better than that in previous FY

- The company started its crushing operations early and hence crushed larger quantity of sugarcane and commensurately produced more sugar. This resulted in reaping the benefits of economics of scale. Not only was the Company able to produce more sugar, it generated and sold more power to the State Grid.

- Your company continued to record impressive recoveries during the year, thus keeping the raw material & other costs pegged at lower levels

- Your company is relentlessly making efforts to recalibrate its debt profile and reduce its long-term debt burden with a view to keep the interest cost under control. Not only has the company been able to reduce its long term debt with some aggressive and accelerated debt repayment program, the company has had the benefit of lower rate of interest on account its improved credit rating. The long term loans of the company are rated -A- (-) with stable outlook by ICRA. The company has thus been able to place a lid on its interest costs.

- During the year the company successfully concluded a QIP program in which many a marquee investors participated. The company raised RS.59.4 crores, which amount was used for accelerated repayment of long term debt. The QIP was in the overall interest of the Company and will have spiraling effect in pruning the debt profile of the company.

5. A - CANE & SUGAR POLICY

The main policies of the government in relation to the sugar industry during the year were:

a) Hitherto applicable levy and free sale sugar ratio of 10:90 for the period up to 31st March, 2013 has since been abolished pursuant to adoption of recommendations contained in the report of Dr. Rangarajan. The sugar mills are now eligible to sell their entire production as free sale sugar

b) The Fair & Remunerative Price (FRP) for the crushing season 201516 was RS.230 per quintal and the same has been retained at RS.230 per quintal for 2016-17, both are linked to recovery @ 9.50%.

c) Chronology of SMP /FRP announced by the Central Government on the basis of recovery is given herein under:

Season	SMP/F&RP D / Quintal
2000-01(SMP)	59.50*
2001-02	62.05*
2002-03	64.50*
2002-03 (Revised)	69.50*
2003-04	73.00*
2004-05	74.50*
2005-06	79.50&
2006-07	80.25&
2007-08	81.18&
2008-09	81.18&
2009-10 (SMP since replaced by F&RP )	129.84@
2010-11	139.12@
2011-12	145.00@
2012-13	170.00@
2013-14	210.00@
2014-15	220.00@
2015-16	230.00@
2016-17	230.00@

* Linked to recovery of 8.50%

& Linked to recovery of 9%

@ Linked to recovery of 9.50%

d) The Company is required to pay State Administered Price (SAP). For the crushing season 2016-17, the State Government of Uttar Pradesh announced SAP of RS.305 per quintal for general variety of Sugarcane, RS.10 per quintal is extra payable for early variety & RS.5 per quintal is less payable for rejected variety.

B. Change in Nature of Business

There is no change in nature of business of the company.

C. Material Changes and Commitments, if any, Affecting the Financial Position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

No Material changes have occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

D. Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals Impacting The Going Concern Status and Company-s Operations in Future

No significant & Material orders have been passed impacting the Going concern Status & Company-s operations in future.

E. Details in respect of adequacy of internal financial controls with reference to the financial statements.

The Company has adequate internal financial control in place. The Company has got robust systems in place to ensure prepayment audits of transactions, concurrent internal audit of all transactions of various segments of activities of the company.

F. Share Capital

The company issued 25,15,471 equity shares @ RS.236.11 per shares by way of Qualified Institutional Placement to Qualified Institutional Buyers during the year.

G. Extract of the Annual Return

The extract of the annual return in Form No. MGT - 9 is annexed herewith as Annexure III, forming part of the Board-s report

H. Corporate Social Responsibility

The company made profits in last financial year 2015-16 but incurred losses in earlier 2 years & thus average profits of past 3 years is negative and hence a requirement of incurring CSR expenditure is not applicable to the Company for the Current financial year under Section 135 of the Companies Act, 2013 read with the relevant rules. However as per the requirement of the Act, the Company has already constituted CSR Committee. Although as aforesaid the requirement of spending on CSR is not applicable, however, the Company has been carrying out CSR in various fields including education, health, medical facilities etc. for the common benefits of employees, farmers, villagers from time to time.

I. Number of Meetings of The Board of Directors

Details of Composition of Board, Audit Committee & details of their meetings are given in Corporate Governance Report.

J. Vigil Mechanism

The Company has adopted policy on Vigil Mechanism in the Board meeting held on May 9, 2014. No complaints were received under this policy during the year.

K. Nomination & Remuneration Committee

Details of Composition of the Committee & details of their meetings are given in Corporate Governance report.

L. Particulars of Loans, Guarantees or Investments Under Section 186

No Loans, Guarantees or investments are made during the year.

M. Particulars of Contracts or Arrangements with Related Parties:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section(1) of section 188 of the Companies Act, 2013 are approved by the Board & if required approval is sought from shareholders in General meeting.

N. Managerial Remunartion

a) Details of the ratio of the remuneration of each director to the median employee-s remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given below:

Name of director	Category	Ratio to median employees remuneration
Shri G R Morarka	Managing Director	316.83:1
Shri Vijay S Banka	Whole Time Director & CFO	23.29:1
Shri B J Maheshwari	Whole Time Director & CS cum CCO	23.50:1
Shri B K Agarwal	Independent Director	0.49:1
Shri K N Prithviraj	Independent Director	0.43:1
Ms. Malathi Mohan@ (upto 26th October, 2016)	Independent Director	0.08:1
Ms. Nina Chatrath$ (from 4th February, 2017)	Independent Director	0.12:1

@ Ceased to be Director on account of demise

$ Appointed as Director to fill in vacancy caused on account of death of Ms. Malathi Mohan

b) Median Remuneration

There is increase of 23.81% in median remuneration of employee during the current accounting year of 12 months over the previous accounting period consisting of 12 months.

c) Permanent employees

As at 31st March, 2017, the Company has on its payroll 638 permanent employees excluding seasonal employees.

d) Affirmation that the remuneration is as per the remuneration policy of the company.

Remuneration paid to Managing Director & Whole Time Director is as per approved policy of the Company.

e) A statement showing the name of every employee of the company, who-

f) If employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than One crore & twenty lakh rupees; 1 (Shri G R Morarka, Managing Director).

g) If employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than Eight lakh fifty thousand rupees per month: NIL.

B Any director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Board-s Report: NOT APPLICABLE.

C Details of remuneration with break-up of components paid to Managing Director, Whole Time Director, terms of appointment are stated in Corporate Governance Report.

O. Secretarial Audit Report

A Secretarial Audit Report given by M/s. VKM & Associates, a company secretary in practice is submitted and annexed herewith as Annexure IV. There are no qualifications, reservation or adverse remarks or disclaimer in the Secretarial Audit Report.

P. Risk Management Policy

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

Q. Policy on Anti Sexual Harassment

The Company has put in place a policy on Anti Sexual harassment, No complaints have been received under this policy during the year.

R. Related Party Transactions

Related party transactions that were entered during the financial year were on an arm-s length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company-s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed herewith and marked as Annexure II. The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules thereunder and the Listing Regulations.

6. Directors

A) Changes in Directors and Key Managerial Personnel

Pursuant to the requirements of the Companies Act, 2013, Managing Director & Independent directors are not liable to retire by rotation and hence all the Whole Time Directors are liable to retire by rotation. Accordingly Shri B J Maheshwari and Shri Vijay S Banka retire by rotation and has offered themselves for re appointment. Ms. Malathi Mohan has passed away during the year and the casual vacancy taken place due to her death has been filled up by appointment of Ms. Nina Chatrath.

B) Declaration by an Independent Director(s) and re-appointment

Pursuant to the requirements of section 149(7) of the Companies Act, 2013, the company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in section 149(6) of the Companies act, 2013.

All the three independent directors are appointed/re appointed in the meeting of Board of Directors held on August 13, 2014 for a period of 5 years as per the requirements of section 149 of the Companies act, 2013.

C) Formal Annual Evaluation

Pursuant to the requirements of section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of the listing regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board-s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

D) Policy on Directors- Appointment and Remuneration Including Criteria for Determining qualifications, Positive Attributes, Independence of a Director, Key Managerial Personnel and Other employees

The Board shall have minimum 3 and maximum 15 directors, unless otherwise approved. No person of age less than 21 years shall be appointed as a director on the Board. The company shall have such person on the Board who complies with the requirements of the Companies Act, 2013, Provisions of the Listing Regulations, Memorandum of Association and Articles of Association of the company and all other statutory provisions and guidelines as may be applicable from time to time. Composition of the Board shall be in compliance with the requirements of Listing Regulations of the Stock Exchanges. Majority of the Directors shall have specialised knowledge/ experience in the areas like Sugar sector, Strategic management, Legal, Risk Management, Accountancy, Finance, etc. Except for whole time directors, no other directors are paid remuneration, but are paid only sitting fees. The MD is paid remuneration as approved by other applicable authorities, but are not paid sitting fees. MD, Company Secretary and Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of the company. All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct.

Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields.

Policy on Directors nomination and remuneration is available on company-s website at www.dwarikesh.com

7. Statement of Director-s Responsibilities

As required under the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that year;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively,

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

8. Management-s Discussion and Analysis Report

Pursuant to Regulations 34 of the Listing Regulations of the Stock Exchanges, Management-s Discussion and Analysis Report for the year under review is presented in a separate segment which is forming part of the Annual Report.

9. Corporate Governance

As per Regulations 34 of the Listing Regulations with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

10. Disclosure: CSR Committee

The CSR Committee comprises Shri B. K. Agarwal as Chairman, Shri G. R. Morarka and Shri B. J. Maheshwari as other members.

Audit Committee

The Audit Committee comprises of Independent Directors namely Shri B. K. Agarwal as Chairman, Shri K. N. Prithviraj, Ms. Nina Chatrath and Shri V. S. Banka as other members.

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

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

Pursuant to section 134 (3)(m) of the Companies Act, 2013, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure -I and form a part of this report.

12. Subsidiary Company-s Report:

The Company does not have any subsidiary in terms of provisions of Companies Act, 2013.

13. Auditors & Auditor-s Report:

There are no qualifications in the Auditors report.

Pursuant to the provisions of section 139(2) of the Companies Act, 2013, the existing Auditors, M/s. S S Kothari Mehta & Co., Chartered Accountants have completed their tenure and as proposed, identified and recommended by audit committee and board. You are requested to appoint M/s. NSBP & Co., Chartered Accountants, New Delhi as statutory the Auditors for the period of 5 years holding their office upto the conclusion of 28th Annual General Meeting of the company.

All remarks of the auditors having reference to the accounting policies or notes to the account are self-explanatory and do not require any further explanation. There are no qualifications in the Auditors report.

14. Cost Auditors:

As per the directions issued by the Central Government pursuant to the provisions of section 148 of the Companies Act, 2013 M/s. Ramanath Iyer & Co, Cost Accountants were appointed to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended March 31, 2017.

15. Public Deposits

The Company does not have any fixed deposits at the beginning of the year in terms of Section 74 of the Companies Act, 2013. The Company did not accept any deposits during the year.

16. Acknowledgement

Your directors wish to place on record their sincere gratitude and appreciation to its members, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organisation.

By Order of the Board

For DWARIKESH SUGAR INDUSTRIES LIMITED

G. R. Morarka

Managing Director

(DIN - 00002078)

Vijay S Banka

Whole Time Director & CFO

(DIN - 00963355)

B J Maheshwari

Place : Mumbai Whole Time Director & CS cum CCO

Dated : May 18, 2017 (DIN - 00002075)

---

Mar 31, 2016

The Members of the Company,

Your Directors take pleasure in presenting their twenty second Annual Report together with the audited accounts for the year ended 31^st March, 2016.

1. FINANCIAL RESULTS

	Rs. in lacs Year ended 31.03.2016	Rs. in lacs Eighteen months period ended 31.03.2015
Gross profit before depreciation, interest & tax	11,683.04	9,586.58
Less: Depreciation	3,076.46	4,724.64
Finance Costs	5,159.02	7,520.98
Profit / (Loss) before tax and exceptional items	3,447.56	(2,659.04)
Add : Exceptional income (Net of taxes)	491.83	--
Profit / (Loss) before tax	3,939.39	(2,659.04)
Less: Provision for taxes (Net of MAT credit entitlement)	9.55	--
Deferred tax liability / (asset)	33.21	(984.02)
Profit /(Loss) after tax	3,896.63	(1,675.02)
Add: Balance brought forward from previous year	(6,876.46)	(5,201.44)
Amount available for appropriation	(2,979.83)	(6,876.46)
Appropriations:	—	—
Balance carried forward to next year	(2,979.83)	(6,876.46)

2. DIVIDEND

In view of brought forward losses, it is deemed prudent to plough back the profits earned during the year for strengthening the cash flows of the Company. No divided [(including dividend on Preference Shares of any of the Series (including Arrears)] is hence being recommended for payment.

Fourth Proviso to sub section 1 of section 123 of the Companies Act, 2013 does not permit payment of any dividend unless all brought forward losses including depreciation are set off against profits of the Company for the Current year.

The dividend on Cumulative Redeemable Preference Shares (Series I, II, III & IV) is being accumulated and will be paid subsequently in the year when the company earns adequate profits.

3. YEAR IN RETROSPECT OPERATIONS:

Distinguishing features of the crushing operations in your company are given below:

• Accounts for the current year are drawn up for 12 months, captures results of small part of crushing season 2014-15, off season of 2015-16 and major part of crushing season 2015-16, whereas the accounts of previous accounting period 201315 were drawn up for 18 months (from 1^st October, 2013 to 31^st March, 2015). The figures are therefore not comparable.

Season 2014-15 vis-a-vis season 2013-14:

Season 2014-15 (completed season)

Particulars	2014-15	2013-14	% Change
Crushing (Lac/Quintals) - total at all three units	233.06	208.72	11.66
Recovery % (Combined)	10.78	10.22	5.48
Production (Lac/Quintals) - total at all three units*	25.12	21.33	17.77

-including small quantity of non-marketable (Brown) sugar

Season 2014-15 vis-a-vis season 2013-14

- Crushing higher, by 11.67%.

- Recovery higher, by 5.48%.

- Sugar production higher, by 17.77%.

Season 2015-16 (till 31^st March, 2016) vis-a-vis season 2014-15 (till 31^st March, 2015):

Particulars	2015-16	2014-15	% Change
Crushing (Lac/Quintals) - total at all three units	200.58	209.00	-4.03
Recovery % (Combined)	11.62	10.57	9.93
Production (Lac/Quintals) - total at all three units*	23.31	22.09	5.52

- including small quantity of non-marketable (Brown) sugar at DD unit.

- Crushing lower, by 4.03%.

- Recovery higher, by 9.93%.

- Sugar production higher, by 5.52%.

Crushing season 2015-16 is now consummated. Comparison of full season 2015-16 & full season 2014-15 is as below: Season 2015-16 (completed season)

Particulars	2015-16	2014-15	% Change
Crushing (Lac/Quintals) - total at all three units	210.49	233.06	-9.68
Recovery % (Combined)	11.73	10.78	8.81
Production (Lac/Quintals) - total at all three units *	24.71	25.12	-1.63

*including small quantity of non-marketable (Brown) sugar.

- Sugarcane crushing down, by 9.69%.

- Remarkable increase in recovery, by 8.81%.

- Sugar production marginally lower, by 1.63%.

- Lower crushing during season 2015-16 was a Pan Uttar Pradesh phenomenon.

- Lower cane availability on account of lower yields across Uttar Pradesh.

- Impressive recoveries on account of superior varietal mix, with increasing thrust on early maturing varieties such as Co 0238.

-Higher recovery also on account extremely favorable climatic conditions.

- Ongoing efforts to reduce cut - crush time (lead time between harvest & crushing) also played a role in enhancement of recoveries.

- Highest ever group recovery of 11.73% with recovery at DN plant, an impressive 12.12%.

Performance of cogeneration division: Metrics of power sold:

Unit	Year 2015-16		Period 2013-15
	(01.04.2015 to 31.03.2016)		(01.10.2013 to 31.03.2015)
	Power sold in lac units	Amount in Rs. lacs	Power sold in lac units	Amount in Rs. lacs
DN	249	1,092	441	1,904
DP	567	2,830	1,086	4,910
DD	561	2,797	1,298	5,870
Total	1,377	6,719	2,825	12,684

Performance of Distillery:

During the year 5,701,769 Litres of Spirit (previous period 5,038,103 Litres [Including 212,806 Liters on conversion of 200,155 Liters ethanol and additional moisture thereon]. The rectified spirt was further reprocessed and 5,168,428 Litres Ethanol (previous period 574,205) was produced at Dwarikesh Nagar Unit of the Company. In value terms the sale of Rectified Spirit was Rs. 310.01 lacs (previous period Rs. 1,320.97 lacs) and sale of Ethanol was Rs. 2,025.04 lacs (previous period Rs. 123.23 lacs). Your company migrated to producing more ethanol which resulted in value addition

During the year Bio machinated spent wash plant was commissioned. The capital expenditure plan was executed at an outlay of approximately Rs. 10 crores. The plant will not only address the effluent treatment needs of the distillery but will also assist in uninterrupted functioning of the distillery plant for most part of the year.

4. Sugar industry - year at a glance.

0 The year under review was a year of fluctuating fortunes. During first few months of the year there was a sense of deja-vu as the sugar prices, both globally & domestically plunged to extremely unviable levels. While on the one hand international price of raw sugar touched a low of around 10 cents per pound, domestic prices reached a nadir of around Rs. 2,200 per quintal during August, 2015. Sugar industry in India was in a state of disarray with cane arrears figure at an all-time astounding high. Over supply resulting in glut had swept across the world. Many sugar companies across India were in a debt trap and on the cusp of bankruptcy

0 Central Government had to perforce intervene and it quickly announced a slew of measures which have helped revival of the industry. For starters, it announced a soft loan of Rs. 6,000 crores to be paid to sugar mills through Banks to be disbursed directly to the farmers towards their cane dues. Central Government agreed to provide interest subvention @ 10% for one year period. Secondly, it announced compulsory export of 3.2 million tons of sugar and to compensate the sugar mills for the losses incurred on exports, agreed to provide a production subsidy Rs. 4.50 per quintal of sugarcane crushed during the season 2015-16. There was an additional covenant of supplying a minimum agreed quantity of ethanol so as to be eligible to claim subsidy. The scheme was revenue neutral for the Government, as it sought to raise cess on sugar sale to build the corpus to settle claims of subsidy

0 10% Ethanol blending program has been taken up by the Central Government in the right earnestness. Bids were invited by oil marketing companies for 2.66 billion litres of ethanol. A one year excise duty benefit has been given to mills supplying ethanol so as to motivate mills to actively participate in the ethanol program. While fructification of 10% ethanol blending may take some time, country has already achieved 5% blending. Central Government is proactively ironing out all transactional bottlenecks by constantly engaging and communicating with all stakeholders including oil marketing companies, various ministries and all agencies, both at the levels of Central Government & State Government.

-State Government of Uttar Pradesh also played a significant role in mitigating the crisis engulfing the industry. It cannibalized and directly disbursed subsidy of Rs. 28.60 per quintal of cane purchased during the season 2014-15. State Government also kept the sugarcane price for the season unchanged at Rs. 280 per quintal for the general variety. It has also announced waiver of post-procurement levies such society commission, purchase tax & entry tax amounting to Rs. 11.90 per quintal. Two tier cane price payment mechanism was introduced, in which first part of Rs. 230 per quintal is to be paid within stipulated 14 days of purchase of cane. Balance cane price is made payable within 90 days of the close of crushing of the respective sugar mill. This payment mechanism besides providing succour to the cash flows of sugar mills has ensured that all the farmers supplying sugarcane are at least paid Rs. 230 per quintal unlike in the past when the burden of arrears was mainly on the famers supplying sugarcane towards the rear end.

0 The aforesaid measures coincided with certain fundamental correction in the demand-supply scenario, both internationally & domestically. For the first time after many years if will be a deficit year globally with deficit stretching between 5 and 7 million tons. Compulsory exports combined with estimated lower production in the country on the back of unfortunate draught in Maharashtra & Karnataka led to a rally in sugar prices. From dreadful low levels of price in August 2015, the prices have now rebounded by nearly 50%. The price rise augurs well for the sugar industry which was facing existential crisis. However for the benefits to percolate on the industry the prices should sustain at reasonable levels.

0 Sugar mills in Uttar Pradesh benefited additionally on account of smart improvement in recoveries. The present trend is positive although the economics of the industry is nowhere near superlative. Yet the companies of better pedigree which are low on debt content and which are constantly achieving lofty standards of operating efficiencies may have something to cheer about, although it will take constantly good economics for 2 to 3 years at least to strengthen the financial position. The key of course would be the sugarcane price that the State Government may determine for the crushing season 2016-17.

It will make or mar the fortunes of the industry. Circumspection has given way and the industry is guardedly optimistic Dwarikesh - Financial scorecard:

Particulars	2015-16 Lac Rs.	%	2013-15 (18 months) Lac Rs.	%
Net Sales	79,434	100.00	112,839	100.00
EBIDTA	*12,175	15.33	9,587	8.50
EBDTA	*7,016	8.83	2,066	1.83
EBT	3,939	4.96	(2,659)	(2.36)
EAT	3,897	4.91	(1,675)	(1.48)

*Exceptional income of Rs. 492 Lacs is added to EBIDTA and EBDTA

The numbers for the year under review make impressive comparison with the numbers of the previous period.

a. EBDITA, both in absolute numbers and in % terms is markedly better than in the previous period. Margin of EBITDA is more than 15% and in absolute numbers more than Rs. 120 crores. In absolute terms the EBIDTA posted in higher than the EBIDTA posted in the previous period of 18 months.

b. Your company has earned a healthy cash profit in excess of Rs. 70 crores in comparison to meagre cash profit of Rs. 20.66 crores earned in the previous period.

c. Earnings after tax is close to Rs. 39 crores which in % works out nearly 5%. This may be seen in juxtaposition with the loss of Rs. 16.75 crores posted during the previous period.

Your company has posted better results after several years. Standout reasons are not difficult to explore:

- Realignment of fundamentals of sugar industry. After many years of surplus sugar, world over, 2015-16 has been a deficit year, resulting in rally in sugar prices. Sales price realization of sugar, post November, 2015 improved steadily & gradually

- During the year under review your Company received and accounted for a subsidy of Rs. 20 per quintal of cane purchased during the season 2014-15. The subsidy was received from the State Government.

- Your company recorded impressive recoveries during the year, significantly better than in the previous year, thus keeping the raw material & other costs pegged at lower levels

-Your company is relentlessly making efforts to recalibrate its debt profile and reduce its long-term debt burden with a view to keep the interest cost under control

- Though the State Government has announced subsidy of Rs. 23.30 per quintal of cane purchased during the season 2105-16 the same is linked to threshold price of sugar and by-products. The same will be taken cognizance of as and when the same is crystallized.

5. A - CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were:

a) The ratio of levy and free sale sugar was 10:90 for the period up to 31^st March, 2013 & thereafter levy obligation was abolished pursuant to adoption of recommendations contained in the report of Dr. Rangarajan.

b) The Fair & Remunerative Price (FRP) for the crushing season 2015-16 was Rs. 230 per quintal and the same has been retained at Rs. 230 per quintal for 2016-17, both are linked to recovery @ 9.50 %.

c) Chronology of SMP /FRP announced by the Central Government on the basis of recovery is given herein under:

Season	SMP/F&RP Rs. / Quintal
2000-01(SMP)	59.50*
2001-02	62.05*
2002-03	64.50*
2002-03 (Revised)	69.50*
2003-04	73.00*
2004-05	74.50*
2005-06	79.50&
2006-07	80.25&
2007-08	81.18&
2008-09	81.18&
2009-10 (SMP since replaced by F&RP )	129.84@
2010-11	139.12@
2011-12	145.00@
2012-13	170.00@
2013-14	210.00@
2014-15	220.00@
2015-16	230.00@

-Linked to recovery of 8.50 %.

& Linked to recovery of 9%%.

@ Linked to recovery of 9.50%.

d) The Company is required to pay State Administered Price (SAP) .For the crushing season 2015-16, the State Government of Uttar Pradesh announced SAP of Rs. 280 per quintal for general variety with concessions/reliefs to the extent of Rs. 23.30 per quintal linked to certain benchmarks.

B. CHANGE IN NATURE OF BUSINESS:

There is no change in nature of business of the company.

C. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No Material changes have occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

D. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

No significant & Material orders have been passed impacting the Going concern Status & Company''s operations in future.

E. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.

The Company has adequate internal financial control in place .The Company has got robust systems in place to ensure prepayment audits of transactions, concurrent internal audit of all transactions of various segments of activities of the company.

F. SHARE CAPITAL

The company has not issued any shares during the year.

G. EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No. MGT - 9 is annexed herewith as Annexure III, forming part of the Board''s report.

H. CORPORATE SOCIAL RESPONSIBILITY

The company is incurring losses in last few years & there were losses in last 3 preceding accounting years, hence the provisions of CSR are mandatorily not applicable, however the Company is carrying out CSR activities. The Company has been incurring expenditure on CSR activities covering education, health, medical facilities etc for the common benefits of employees, farmers, villagers from time to time.

I. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

Details of Composition of Board, Audit Committee & details of their meetings are given in Corporate Governance Report.

J. VIGIL MECHANISM

The Company has adopted policy on Vigil Mechanism in the Board meeting held on May 9, 2014. No complaints were received under this policy during the year.

K. NOMINATION & REMUNERATION COMMITTEE

Details of Composition of the Committee & details of their meetings are given in Corporate Governance report.

L. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

No Loans, Guarantees or investments are made during the year.

M. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section

(1) of section 188 of the Companies Act, 2013 are approved by the Board & if required approval is sought from shareholders in General meeting.

N. MANAGERIAL REMUNARTION: a) Details of the ratio of the remuneration of each director to the median employee''s remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given below:

Name of Director	Category	Ratio to median employees remuneration
Shri G R Morarka	Managing Director	71.55:1
Shri Vijay S Banka	Whole Time Director & CFO	22.51:1
Shri B J Maheshwari	Whole Time Director & CS cum CCO	23.29:1
Shri B K Agarwal	Independent Director	0.34:1
Shri K N Prithviraj	Independent Director	0.25:1
Ms Malathi Mohan	Independent Director	0.16:1

b) Median Remuneration

There is increase of 9.89 in median remuneration of employee during the current accounting year of 12 months over the previous accounting period consisting of 18 months, pro-rated for 12 months for calculating the increase.

c) Permanent employees

As at 31^st March, 2016, the Company has on its payroll 620 permanent employees excluding seasonal employees.

d) The explanation on the relationship between average increase in remuneration and company performance;

Although performance of the Company has deteriorated on account of high cost of Sugarcane & low realization of its products, the average increase in remuneration of employees is commensurate with increase in Sugar Industry.

e) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company; The operating performance of the Company has been one of the best, however financial performance is marred by high cost of Sugarcane & low realization of Sugar. Remuneration of Key Managerial personnel is in line with the trends & remuneration paid by others in Sugar Industry in state of Uttar Pradesh.

f) Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies.

Particular	As at 1/4/2015	31/3/2016	Change%
Market Cap (Rs. in Crores)	33.77	337.39	999
P E Ratio	NA*	9.43	—
Price of shares Rs.	20.70	206.80	999

(Source: NSE prices)

*Since there is loss in accounting year 2013-15.

IPO price: Rs. 65 per share.

Market price as on 1/4/2015 - Rs. 20.70, Decrease Rs. 44.03, (-ve) 68.15 %.

Market price as on 31/3/2016 - Rs. 206.80, increase Rs. 141.80, ( ve) 218.15 %.

g) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The average increase in average Salaries of median employee is 9.89 % & average increase in salaries of Key Managerial personnel''s remuneration is 40.38 % over last accounting year (pro-rated for 12 months based on 18 months).

h) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company;

Although performance of the Company over the years has been less than satisfactory, reflected in the losses incurred in the last few years (barring current year), on account of high cost of Sugarcane & low realization of its products, the increase in remuneration is commensurate with increase in Sugar Industry.

i) The key parameters for any variable component of remuneration availed by the directors;

All whole-time Directors including Managing Director are entitled to receive remuneration by way of ex gratia / interim bonus.

j) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: NOT APPLICABLE.

k) Affirmation that the remuneration is as per the remuneration policy of the company.

Remuneration paid to Managing Director & Whole Time Director is as per approved policy of the Company, l) A statement showing the name of every employee of the company, who-

(i) If employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees; 3 (Shri G R Morarka, Managing Director, Shri Vijay S Banka, Whole Time Director & CFO, Shri B J Maheshwari, Whole Time Director & CS Cum CCO).

(ii) If employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month: NIL.

m) Any director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Board''s Report: NOT APPLICABLE.

n) Details of remuneration with breakup of components paid to Managing Director, Whole Time Director, terms of appointment are stated in Corporate Governance Report.

O. SECRETARIAL AUDIT REPORT:

A Secretarial Audit Report given by M/s VKM & Associates, a company secretary in practice is submitted and annexed herewith as Annexure IV. There are no qualifications, reservation or adverse remarks or disclaimer in the Secretarial Audit Report.

P. RISK MANAGEMENT POLICY:

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

Q. POLICY ON ANTI SEXUAL HARASSMENT:

The Company has put in place a policy on Anti Sexual harassment, No complaints have been received under this policy during the year.

R. RELATED PARTY TRANSACTIONS :

Related party transactions that were entered during the financial year were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company''s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed herewith and marked as Annexure II. The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules there under and the Listing Regulations.

6. DIRECTORS

A) Changes in Directors and Key Managerial Personnel

Pursuant to the requirements of the Companies Act, 2013, Managing Director & Independent directors are not liable to retire by rotation and hence all the Whole Time Directors are liable to retire by rotation. Accordingly Shri B J Maheshwari and Shri Vijay S Banka retire by rotation and has offered themselves for re appointment.

B) Declaration by an Independent Director(s) and re- appointment

Pursuant to the requirements of section 149(7) of the Companies Act, 2013, the company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in section 149(6) of the Companies act, 2013.

All the three independent directors are appointed/re appointed in the meeting of Board of Directors held on August 13, 2014 for a period of 5 years as per the requirements of section 149 of the Companies act, 2013.

C) Formal Annual Evaluation

Pursuant to the requirements of section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of the listing regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

D) POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Board shall have minimum 3 and maximum 12 directors, unless otherwise approved. No person of age less than 21 years shall be appointed as a director on the Board. The company shall have such person on the Board who complies with the requirements of the Companies Act, 2013, Provisions of the Listing Regulations, Memorandum of Association and Articles of Association of the company and all other statutory provisions and guidelines as may be applicable from time to time. Composition of the Board shall be in compliance with the requirements of Listing Regulations of the Stock Exchanges. Majority of the Directors shall have specialized knowledge/ experience in the areas like Sugar sector, Strategic management, Legal, Risk Management, Accountancy, Finance, etc. Except for whole time directors, no other directors are paid remuneration, but are paid only sitting fees. The MD is paid remuneration as approved by other applicable authorities, but are not paid sitting fees. MD, Company Secretary and Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of the company. All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct.

Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields.

Policy on Directors nomination and remuneration is available on company''s website at www.dwarikesh.com

7. STATEMENT OF DIRECTOR''S RESPONSIBILITIES

As required under the provisions of Section 134(3)( c ) of the Companies Act, 2013, your Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that year;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively,

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

8. MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulations 34 of the Listing Regulations of the Stock Exchanges, Management''s Discussion and Analysis Report for the year under review is presented in a separate segment which is forming part of the Annual Report.

9. CORPORATE GOVERNANCE

As per Regulations 34 of the Listing Regulations with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

10. DISCLOSURES: CSR Committee

The CSR Committee comprises Shri B. K. Agarwal as Chairman, Shri G. R. Morarka and Shri B. J. Maheshwari as other members. Audit Committee

The Audit Committee comprises of Independent Directors namely Shri B. K. Agarwal as Chairman, Shri K. N. Prithviraj, Ms. Malathi Mohan and Shri V S. Banka as other members.

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

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 134 (3)(m) of the Companies Act, 2013, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure -I and form a part of this report.

12. SUBSIDIARY COMPANY''S REPORT:

The Company does not have any subsidiary in terms of provisions of Companies Act, 2013.

13. AUDITORS & AUDITOR''S REPORT:

There are no qualifications in the Auditors report.

The Auditors, M/s. S S Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2016-17 and fix their remuneration. M/s S. S. Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

All remarks of the auditors having reference to the accounting policies or notes to the account are self-explanatory and do not require any further explanation. There are no qualifications in the Auditors report.

14. COST AUDITORS:

As per the directions issued by the Central Government pursuant to the provisions of section 148 of the Companies Act, 2013 M/s Ramanath Iyer & Co, Cost Accountants were appointed to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended March 31, 2016.

15. PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 74 of the Companies Act, 2013. The Company did not accept any deposits during the year.

16. ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its members, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organization.

By Order of the Board

For DWARIKESH SUGAR INDUSTRIES LIMITED

G. R. MORARKA

MANAGING DIRECTOR

VIJAY S BANKA

WHOLE TIME DIRECTOR & CFO

Place : Mumbai B J MAHESHWARI

Dated : May 24, 2016 WHOLE TIME DIRECTOR & CS Cum CCO

---

Mar 31, 2015

The Members of the Company,

The Directors take pleasure in presenting their Twenty first Annual Report together with the audited accounts for the period ended 31st March, 2015.

1. FINANCIAL RESULTS

Rs. in lacs Rs. in lacs Eighteen months period ended Year ended 31.03.2015 30.09.2013

Gross profit before depreciation, interest & tax 9,586.58 7,182.82

Less: Depreciation 4,724.64 3,318.52

Finance Costs 7,520.98 7,056.09

Profit / (Loss) before tax and exceptional items (2,659.04) (3,191.79)

Less: Provision for taxes -- 9.98

Deferred tax liability / (asset) (984.02) (1,265.74)

Profit /(Loss) after tax (1,675.02) (1,936.03)

Add: Balance brought forward from previous year (5,201.44) (3,265.41)

Amount available for appropriation (6,876.46) (5,201.44)

Appropriations: -- --

Balance carried forward to next year (6,876.46) (5,201.44)

2. DIVIDEND

In view of losses during the period, your directors are compelled to skip dividend on 8% (Series M,MI & IV) and 12% (series I) Cumulative Redeemable Preference Shares and also on the Equity Shares for the year.

The dividend on Cumulative Redeemable Preference Shares (both 8% & 12% series) is being accumulated and will be paid in the year of profit.

3. YEAR IN RETROSPECT OPERATIONS:

Salient features of the crushing operations in Dwarikesh are listed herein under:

- Accounts for the current period consists of 18 months encompassing 2 crushing seasons viz. crushing season 2013-14 (completed) and crushing season 2014-15 (partial, up to 31st March, 2015): whereas the previous year 2012-13 covers operations of completed crushing season of 2012-13. Therefore the figures are not comparable.

Season 2013-14 vis-a-vis season 2012-13:

Season 2013-14 (completed season)

Particulars 2013-14 2012-13 % Change

Crushing (Lac/Quintals) - total at all three units 208.71 242.60 -13.97%

Recovery % (Combined) 10.22 9.81

Production (Lac/Quintals) - total at all three units* 21.33 23.81 -10.42%

*including small quantity of non-marketable (Brown) sugar

- Crushing suffered a setback during the season 2013-14 owing to lesser availability of sugarcane. It was lesser by nearly 14% as compared to the previous season.

- However the recovery recorded was significantly better (10.22% vis-a-vis 9.81%). Consequently production was lesser by only 10.42% (21.32 lac quintals vis-a-vis 23.80 lac quintals).

Particulars 2014-15 2013-14 % Change

Crushing (Lac/Quintals) - total at all three units 209.00 188.86 10.66%

Recovery % (Combined) 10.57 10.04

Production (Lac/Quintals) - total at all three units* 22.09 18.98 16.39%

*including small quantity of non-marketable (Brown) sugar at DD unit.

- Sugar recoveries higher at all the 3 units.

- Higher recoveries were mainly on account of optimum mix of better cane varieties.

However since the season 2014-15 is completed a comparison of full season 2014-15 & full season 2013-14 is as given below:

Season 2014-15 (completed season)

Particulars 2014-15 2013-14 % Change

Crushing (Lac/Quintals) - total at all three units 233.07 208.71 11.67%

Recovery % (Combined) 10.78 10.22

Production (Lac/Quintals) - total at all three units * 25.12 21.33 17.59%

*including small quantity of non-marketable (Brown) sugar

- Season 2014-15 witnessed improved availability of sugarcane, mainly driven by improved yield at farm level.

- Crushing at 233.07 lac quintals was higher by 11.67% over crushing of 208.71 lac quintals clocked during the season 2013-14.

- Higher crushing coupled with higher recovery (10.78% vis-a-vis 10.22%) resulted in higher production of 25.12 lac quintals of sugar as compared to 21.33 lac quintals of sugar produced during the season 2013-14.

- During the season 2014-15 recovery of 11.11% was recorded at DN plant. Typically recovery in mills of North India is lower and the average recovery of UP sugar mills is in the band of 9.25% to 9.50%. Outstanding recovery at DN has been possible on account of optimum varietal mix, proficient logistics management resulting in lowest lead time between harvesting & crushing of sugarcane.

- Recovery recorded at DP plant is also an impressive 10.98% whereas at DD plant recovery of 10.14% was recorded.

- Group recovery of 10.78% clocked during the season 2014-15 is among the highest in North India.

- Sugarcane variety Co 0238 has brought about a revolution in the recovery pattern of mills in Uttar Pradesh and has contributed significantly for the better recovery of the Company.

Performance of cogeneration division: Metrics of power sold:

Period 2013-15 Season 2013-14 Unit (01.10.2013 to 31.03.2015) (01.10.2013 to 30.09.2014)

Power sold in Amount in Power sold in Amount lac units Rs. lacs lac units in Rs. lacs

DN 441 1,904 241 1,009

DP 1,086 4,910 577 2,535

DD 1,298 5,870 678 2,976

Total 2,825 12,684 1,496 6,520



Unit Season 2012-13 (01.10.2012 to 30.09.2013) Power sold in Amount lac units in Rs. lacs

DN 262 1,074

DP 648 2,789

DD 772 3,318

Total 1682 7,181

Highlights:

a. Power evacuation and sales during the season 2013-14 lower on account of lesser crushing & lesser number of crushing days.

b. UPERC has revised tariff effective 20th January, 2015 Performance of Distillery:

During the period under review, 50,38,103* Litres of Industrial Alcohol (previous year 34,31,173 Litres) and 5,74,205 Litres Ethanol (previous year 7,11,883 Litres) was produced at Dwarikesh Nagar Unit of the Company. In value terms the sale of rectified spirit was Rs. 1,320.97 lacs (previous year Rs. 836.26 lacs) & sale of Ethanol was Rs. 123.23 lacs (Previous Year Rs. 268.59 lacs).

*Includes 2,00,155 ltrs. on conversion of ethanol and 12,651 ltrs. additional moisture (water) thereon.

4. FINANCIAL PERFORMANCE:

- Last few years have been extremely challenging for your company and the sugar industry in general. The State Govern- ment hasn''t announced any increase in sugarcane price (SAP) over the last three crushing seasons. However on account of previous, year on year, successive & excessive increase in sugarcane price for almost 4 to 5 crushing seasons, sugarcane price and resultantly the costs are fastened at extremely higher & unviable levels. Sugarcane price in Uttar Pradesh is among the highest in the world. With no commensurate increase in the price of sugar & by-products, economics of sugar industry has gone haywire.

- Both globally and domestically sugar supply/ production exceeds sugar demand / consumption. Consequently there is a surplus / glut situation which has caused a drag on the sugar prices. Since sugarcane price is not linked to sugar prices in Uttar Pradesh, sugar industry in Uttar Pradesh is on loss making trajectory. The pain of the sector is showing no signs of abatement.

- State Government has announced multi-tier payment mechanism for the season 2014-15, besides announcing various other financial reliefs and subsidies. However fall in price of sugar is so pronounced that, the benefits announced have negligible impact on the overall health of the industry. Benefits were announced on the basis of benchmark price of sugar & by-products. However since the announcement prices have fallen, thus rendering the benefits grossly inadequate. In- crease in sugarcane price during the earlier years is continuing to torment the industry.

Double whammy of higher raw material cost and falling sugar prices has impacted the bottom-line of your company, though the bottom-line, during the period, on account higher recovery and improved operational efficiencies is relatively better as compared to the bottom-line of previous year. Your Company posted after tax loss of Rs. 16.75 crores (for the 18 months period) as compared to loss of Rs. 19.36 crores posted during the year 2012-13. However, your Company did manage to earn cash profit.

Financial scorecard:

Lac Rs.

Particulars 2013-15 % 2012-13 %

Net Sales 1,13,607 100.00 92,761 100.00

EBIDTA 9,587 8.44 7,183 7.74

EBDTA 2,066 1.82 127 0.14

EBT (2,659) (2.34) (3,192) (3.44)

EAT (1,675) (1.47) (1.936) (2.09)

Following inference can be drawn from the above numbers:

1. EBIDTA in absolute terms as well as in percentage terms is higher than the EBIDTA for the earlier year. While comparison of EBIDTA in absolute terms may not capture & articulate the true picture, the fact that in % terms it is better at 8.44% as compared to 7.74% during the year 2012-13 is a matter of some consolation.

2. Cash profit of Rs. 20.66 crores compares favourably, both in absolute terms and in % terms with the cash profit earned during 2012-13.

3. The non-satisfactory financial results are on account of:

- Fastening of sugarcane price at an raised up level of Rs. 280 per quintal for the general variety for the last 3 crushing seasons.

- Rapidly declining price of sugar (presently hovering between Rs. 2,400 and Rs. 2,600 per quintal). Sugar prices are on downward spiral. Both Central Government & the State Government are seized of the problems facing the industry and are attempting to resolve the same.

- EBIDTA margin of your Company has improved on account better recoveries.

- Company''s efforts to recalibrate its debt profile with a view to augment the cash flows and with a view to rationalise interest costs continues. In fact the annualized finance cost during the period is significantly less than the finance cost of year 2012-13.

5. A CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were:

a) The ratio of levy and free sale sugar was 10:90 for the period up to 31st March, 2013 & thereafter levy obligation was abolished pursuant to adoption of recommendations contained in the report of Dr. Rangarajan.

b) The Fair & Remunerative Price (FRP) for the crushing season 2014-15 was Rs. 220 per quintal and the same has now been increased to Rs. 230 per quintal for 2015-16, both are linked to recovery @ 9.50 %.

c) Chronology of SMP /FRP announced by the Central Government on the basis of recovery is given herein under:

Season SMP/F&RP Rs. / Quintal

2000- 01(SMP) 59.50*

2001- 02 62.05*

2002- 03 64.50*

2002- 03 (Revised) 69.50*

2003- 04 73.00*

2004- 05 74.50*

2005- 06 79.50&

2006- 07 80.25&

2007- 08 81.18&

2008- 09 81.18&

2009- 10 (SMP since replaced by F&RP ) 129.84@

2010- 11 139.12@

2011- 12 145.00@

2012- 13 170.00@

2013- 14 210.00@

2014- 15 220.00@

* Linked to recovery of 8.50 % & Linked to recovery of 9%%

@Linked to recovery of 9.50%

d) The Company is required to pay State Administered Price (SAP) .For the crushing season 2014-15, the State Govern- ment of Uttar Pradesh announced SAP of Rs. 280 per quintal for general variety with concessions/reliefs to the extent of Rs. 28.60 per quintal based on certain parameters.

B. CHANGE IN NATURE OF BUSINESS:

There is no change in nature of business of the company.

C. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINAN- CIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No Material changes have occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

D. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IM- PACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

No significant & Material orders have been passed impacting the Going concern Status & Company''s operations in future.

E. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.

The Company has adequate internal financial control in place .The Company has got robust systems in place to ensure prepayment audits of transactions, concurrent internal audit of all transactions of various segments of activities of the company.

F. SHARE CAPITAL

The company has not issued any shares during the period.

G. EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No. MGT - 9 by way of annexure I is annexed and forming part of the Board''s report.

H. CORPORATE SOCIAL RESPONSIBILITY

The company is incurring losses in last few years and hence the provisions of CSR are mandatorily not applicable, however the Company is carrying out CSR activities.

I. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

Details of Composition of Board, Audit Committee & details of their meetings are given in Corporate Governance report.

J. VIGIL MECHANISM

The Company has adopted policy on Vigil Mechanism in the Board meeting held on May 9, 2014. No complaints were received under this policy during the period.

K. NOMINATION & REMUNERATION COMMITTEE

Details of Composition of the Committee & details of their meetings are given in Corporate Governance report.

L. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 No Loans, Guarantees or investments are made during the period.

M. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub- section (1) of section 188 of the Companies Act, 2013 are approved by the Board and given by way of annxure II & if required, approval is sought from shareholders in General meeting.

N. MANAGERIAL REMUNARTION:

a) Details of the ratio of the remuneration of each director to the median employee''s remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given below:

Name of Director Category Ratio to median employees remuneration

Shri G R Morarka Managing Director 42.27:1

Shri Vijay S Banka Whole Time Director & CFO 21.69:1

Shri B J Maheshwari Whole Time Director & CS cum CCO 21.14:1

Shri B K Agarwal Independent Director 0.40:1

Shri K N Prithviraj Independent Director 0.19:1

Ms Malathi Mohan Independent Director 0.13:1

Shri K L Garg* Independent Director 0.06:1

Shri L P Aggarwal* Independent Director 0.10:1

* Resigned during the year

b) Median Remuneration

There is increase of 60.25% in median remuneration of employee during the current accounting period of 18 months over the previous accounting year consisting of 12 months, hence figures are not comparable.

c) Permanent employees

As at 31st March, 2015, the Company has on its payroll 1,584 permanent employees.

d) The explanation on the relationship between average increase in remuneration and company performance; Although performance of the Company has deteriorated on account of high cost of Sugarcane & low realization of its products, the average increase in remuneration of employees is commensurate with increase in Sugar Industry.

e) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company; The operating performance of the Company has been one of the best, however financial performance is marred by high cost of Sugarcane & low realization of Sugar. Remuneration of Key Managerial personnel is in line with the trends & remuneration paid by others in Sugar Industry in state of Uttar Pradesh

f) Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies,

i) Particular As at 1/10/2013 31/3/2015 Change

Market Cap (Rs. in Crores) 27.13 33.28 6.15%

P E Ratio* NA NA NA

Price of shares Rs. 16.63 20.40 3.77%

*Since there are losses in both the period GDR price: Rs. 182 per share

Market price as on 1/10/2013 - Rs. 16.63, Decrease Rs. 165.37, (-ve) 90.86% Market price as on 31/3/2015 - Rs. 20.40, Decrease Rs. 161.60, (-ve) 88.79 % ii) Return on annualized basis:

Market price as on 1/10/2013 - Rs. 16.63, annualized return, (-ve) 10.10% Market price as on 31/3/2015 - Rs. 20.40, annualized return, (-ve) 9.87 %

g) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The increase in average Salaries of median employee is 60.25% & average increase in salaries of Key Managerial personnel''s remuneration is 69.32% for accounting period of 18 months over previous accounting year of 12 months Hence the figures are not comparable.

h) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company;

Although performance of the Company has deteriorated on account of high cost of Sugarcane & low realization of it''s products, the increase in remuneration is commensurate with increase in Sugar Industry.

i) The key parameters for any variable component of remuneration availed by the directors;

Only Managing Director is entitled to receive commission & that too only in case of profits as computed u/s 198 of the Companies Act, 2013.

j) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: Not Applicable

k) Affirmation that the remuneration is as per the remuneration policy of the company

Remuneration paid to Managing Director & Whole Time Director is as per approved policy of the Company.

l) A statement showing the name of every employee of the company, who-

(i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees: Nil

(ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month: Nil

m) Any director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Board''s Report. Not Applicable

n) Details of remuneration with break up of Components paid to Managing Director, Whole Time Director, terms of appointment are stated in Corporate Governance Report.

O. SECRETARIAL AUDIT REPORT:

A Secretarial Audit Report given by M/s VKM & Associates, a company secretary in practice is submitted & annexed as annexure III. There are no qualifications, reservation or adverse remarks or disclaimer in the Secretarial Audit Report.

P. RISK MANAGEMENT POLICY:

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company

Q. POLICY ON ANTI SEXUAL HARASSMENT: The Company has put in place a policy on Anti Sexual harassment, No complaints have been received under this policy during the period.

6. DIRECTORS

A) Changes in Directors and Key Managerial Personnel

During the period from October 1, 2013 to March 31, 2015, Shri G R Morarka has been re-designated as a Managing Director from Chairman & Managing Director pursuant to the requirement of Companies Act, 2013 on account of a ban on holding dual position unless stated otherwise by Articles of the Company. Shri K L Garg, Nominee Director of IDBI Bank Ltd has discontinued as a Director of the company since his nomination was withdrawn by IDBI Bank Ltd. Shri L P Aggarwal, who was appointed as an additional director has tendered his resignation on account of his preoccupations. Ms Malathi Mohan has been appointed as an additional woman director to meet the requirements of section 149 of the Companies Act, 2013.

Pursuant to the requirements of the Companies Act, 2013, Independent directors are not liable to retire by rotation and hence all the Whole Time Directors are liable to retire by rotation. Since the tenure of Shri B J Maheshwari and Shri Vijay S Banka has been ending on April 30, 2015, both of them are proposed to be re appointed for the period of 3 years. Shri G R Morarka is liable to retire by rotation and has offered himself for re appointment.

B) Declaration by an Independent Director(s) and re- appointment

Pursuant to the requirements of section 149(7) of the Companies Act, 2013, the company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in section 149(6) of the Companies act, 2013.

All the three independent directors are appointed/re appointed in the meeting of Board of Directors held on August 13, 2014 for a period of 5 years as per the requirements of section 149 of the Companies act, 2013 & their reappointment is being regularized in the ensuing Annual General meeting.

C) Formal Annual Evaluation

Pursuant to the requirements of section 134(3)(p) of the Companies Act, 2013 read with clause 49 of the listing agree- ment, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

D) POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Board shall have minimum 3 and maximum 12 directors, unless otherwise approved. No person of age less than 21 years shall be appointed as a director on the Board. The company shall have such person on the Board who complies with the requirements of the Companies Act, 2013, Provisions of the Listing Agreement, Memorandum of Association and Articles of Association of the company and all other statutory provisions and guidelines as may be applicable from time to time. Composition of the Board shall be in compliance with the requirements of Clause 49 of the Listing Agreement of the Stock Exchanges. Majority of the Directors shall have specialised knowledge/ experience in the areas like Sugar sector, Strategic management, Legal, Risk Management, Accountancy, Finance, etc. Except for whole time directors, no other di- rectors are paid remuneration, but are paid only sitting fees. The MD is paid remuneration as approved by other applicable authorities, but are not paid sitting fees. MD, Company Secretary and Chief Financial Officer shall be the Key Managerial

Personnel (KMPs) of the company. All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct.

Directors/KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields.

DIRECTORS APPOINTMENT AND REMUNERATION POLICY:

PREFACE:

Pursuant to section 134(3)(e) read with section 178(1) & (3) of the Companies Act, 2013 there shall be a need for all the listed companies and such other companies as specified in this act to have policy on Director''s appointment and remuneration.

The company being listed entity on both the bourses of NSE and BSE, is required to form a policy on Director''s appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other matters mentioned in section 178(3) of the Companies Act, 2013, which is as follows:

Appointment of Executive & Non-executive Directors:

While appointment of any person as a director of the company, the Nomination & Remuneration Committee shall consider the following:

No person shall be eligible for appointment as a managing or whole-time director (hereinafter referred to as managerial person) of a company unless he satisfies the following conditions, namely

(a) he had not been sentenced to imprisonment for any period, or to a fine exceeding one thousand rupees, for the conviction of an offence under any of the Statutory Acts as mentioned in Schedule V of the Companies Act, 2013.

(b) he had not been detained for any period under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974):

Provided that where the Central Government has given its approval to the appointment of a person convicted or detained under sub-paragraph (a) or sub-paragraph (b), as the case may be, no further approval of the Central Government shall be necessary for the subsequent appointment of that person if he had not been so convicted or detained subsequent to such approval.

(c) he has completed the age of twenty-one years and has not attained the age of seventy years:

Provided that where he has attained the age of seventy years; and where his appointment is approved by a special resolution passed by the company in general meeting, no further approval of the Central Government shall be necessary for such appointment;

(d) where he is a managerial person in more than one company, he draws remuneration from one or more companies subject to the ceiling provided in section V of Part II;

(e) he is resident of India as per explanation I of Schedule V of the Act.

Further, Nomination & Remuneration committee shall ensure while appointing the independent directors the requirements stated in section 150 (4) of the Companies Act, 2013.

Remuneration to Independent / Non-Executive Directors:

1. Payment of Remuneration :

None of the independent / Non-executive directors shall be entitled to any remuneration as stated in section 197(1)(ii)(a) and

(b) of Companies Act, 2013.

2. Payment of sitting fees:

All the independent / Non-Executive directors shall be entitled to receive sitting fees for attending Board Meetings and / or Committee Meetings as may be decided by the Board from time to time,which shall not exceedRs 1,00,000 per meeting. At present, they have been paid a sitting fees at the rate of Rs. 2,500 to Rs. 10,000 depending on whether it is a committee meeting or board meeting.

The sitting fees shall be payable in line with fees being paid to independent directors and shall be in comparison with company''s peers. If so required, it may be enhanced within the limits of Rs. 1,00,000 from time to time to attract various professionals and elite person to join the Board room.

3. Payment / Reimbursement of Out of pocket expenditure:

Besides sitting fees as stated above, the independent / non-executive directors shall also entitled to receive out of pocket expenditure for an amount not exceeding Rs. 1,000 per meeting subject to the approval of shareholders in ensuing general meeting of the company, if required.

Remuneration to Whole time / Executive Directors:

Currently, there are only 3 whole time executive directors as follows:

Sr No Name of Director Designation

1 Mr. Gautam R Morarka MD

2 Mr. B J Maheshwari Whole Time Director & CS cum CCO

3 Mr Vijay S Banka Whole Time Director & CFO

Remuneration:

In case if the company has adequate profits:

All the three executive directors putting them together shall be entitled to get overall upto 10% of the net profits computed in a manner stated in section 198 of the Companies Act, 2013. Further, in no case it shall exceed 5% of the net profits computed in the manner stated in section 198 of the Act to a single executive director.

In case if the company has losses or inadequate profits:

If during any financial year the company has incurred losses or it has earned inadequate profits then in such case, the remuneration to the whole time / executive directors shall be payable as per the provisions of Schedule V of the Companies Act, 2013 on the basis of effective capital of the company.

Maximum Remuneration payable to each of the three executive directors may extend to the maximum of Rs. 60 lacs per annum plus 0.01% of the effective capital in excess of Rs. 250 crores.

Besides above, the whole time directors may also be entitled to get such other benefits / emoluments/ allowances / perquisites as stated in section IV of Schedule V of the Companies Act, 2013 in the manner and to the extend provided thereat.

The company shall approach the Central Government for payment / increase in remuneration exceeding the amount stated in Schedule V of the Companies Act, 2013 in case if the company has losses or inadequate profits or terms and conditions stipulated in schedule V have not been met with.

In terms of academic qualifications, although there shall be no any written norms but the preference shall be given to IAS, IPS, CS, CA, CMA and other professional persons to be inducted on the Board of the company. The person should have a skill and experience in the arena of his profession. He should enhance the quality of governance and should be a team member to provide positive input in strategic management to the and being in the top brass of the company. To be an independent director, the person should fulfil the following criteria as specified in section 149 (6) of the Companies Act, 2013.

(a) who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;

(b) (i) who is or was not a promoter of the company or its holding, subsidiary or associate company;

(ii) who is not related to promoters or directors in the company, its holding,subsidiary or associate company;

(c) who has or had no pecuniary relationship with the company, its holding,subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;

(d) none of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two per cent. or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;

(e) who, neither himself nor any of his relatives—

(i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;

(ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of—

(A) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten percent or more of the gross turnover of such firm;

(iii) holds together with his relatives two percent or more of the total voting power of the company; or

(iv) is a Chief Executive or director, by whatever name called, of any non-profit organisation that receives twenty-five percent or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two percent or more of the total voting power of the company; or

(f) who possesses such other qualifications as may be prescribed.

The nomination and remuneration committee understands and acknowledges the matters set out in section 178(4)(a) (b)&(c) and shall always endeavour to reward the quality directors and other key managerial personnel [section 203(1)]. The qualification, merits and experience shall be asserted while deciding the remuneration and it shall be endeavour to attract, retain and enhance the human capital being biggest asset of the company.

7. STATEMENT OF DIRECTOR''S RESPONSIBILITIES

As required under the provisions of Section 134(3)( c ) of the Companies Act, 2013, your Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

8. MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges in India, Management''s Discussion and Analysis Report for the period under review is presented in a separate segment which is forming part of the Annual Report.

9. CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

10. DISCLOSURES:

CSR Committee

The CSR Committee comprises Shri B K Agarwal as Chairman, Shri G R Morarka and Shri B J Maheshwari as other members. Audit Committee

The Audit Committee comprises of Independent Directors namely Shri B K Agarwal as Chairman, Shri K N Prithviraj, Ms Malathi Mohan and Shri V S Banka as other members.

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

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 134 (3)(m) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure - IV and form a part of this report.

12. SUBSIDIARY COMPANY''S REPORT:

The Company does not have any subsidiary in terms of provisions of Companies Act, 2013

13. AUDITORS & AUDITOR''S REPORT:

There are no qualifications in the Auditors report.

The Auditors, M/s. S S Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2015-16 and fix their remuneration. M/s S S Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

All remarks of the auditors having reference to the accounting policies or notes to the account are self-explanatory and do not require any further explanation. There are no qualifications in the Auditors report. However, there is a matter of emphasis in respect of deferred tax assets on unabsorbed depreciation & business losses and the same has been explained in note no.12 of the financial statements, further regarding observation in point no. xvii in Annexure to Auditors report, Company is in the process of arranging long term funds to set right the mismatch.

14. COST AUDITORS:

As per the directions issued by the Central Government pursuant to the provisions of section 148 of the Companies Act, 2013 M/s Ramanath Iyer & Co, Cost Accountants were appointed to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended March 31, 2015.

15. PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 74 of the Companies Act, 2013. The Company did not accept any deposits during the year.

16. ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its share holders, sugar cane growers, em- ployees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organisation.

By Order of the Board For DWARIKESH SUGAR INDUSTRIES LIMITED

G. R. MORARKA

MANAGING DIRECTOR

VIJAY S BANKA

WHOLE TIME DIRECTOR & CFO

Place : Mumbai B J MAHESHWARI

Dated : May 28, 2015 WHOLE TIME DIRECTOR & CS Cum CCO

---

Sep 30, 2013

The Directors take pleasure in presenting their Twentieth Annual Report together with the audited accounts for the year ended 30th September 2013.

1. fInanCIal reSultS

Rs.in lacs Rs.in lacs Year ended Year ended 30.09.2013 30.09.2012

Gross proft before depreciation, interest & tax 7,182.82 9,610.93

Less: Depreciation 3,318.52 3,289.04

Finance Costs 7,056.09 7,885.90

Proft / (Loss) before tax and exceptional items (3,191.79) (1,564.01)

Less: Provision for taxes 9.98

Deferred tax liability (1,265.74) (433.47)

Proft /(Loss) after tax (1,936.03) (1,130.54)

Add: Balance brought forward from previous year (3,265.41) (2,134.87)

Amount available for appropriation (5,201.44) (3,265.41)

appropriations:

Balance carried forward to next year (5,201.44) (3,265.41)

2. DIVIDenD

In view of losses during the year, your directors are compelled to skip dividend on 8% (Series II,III & IV) and 12% (series I) Cumulative Redeemable Preference Shares and also on the Equity Shares for the year.

The dividend on Cumulative Redeemable Preference Shares (both 8% & 12% series) are being accumulated and will be paid in the year of proft.

3. InCreaSe In authorISeD, ISSueD, SuBSrIBeD anD paID up Share CapItal

The company has increased its'' Authorised share capital by creation of 10,00,000 preference shares of Rs. 100 each during the year by creating a new series IV cumulative redeemable preference share by obtaining shareholders approval in Extra Ordinary General Meeting held on March 22, 2013.The Authorised Share capital at present is as follows: The Authorised Share Capital of the Company is Rs. 54,00,00,000/- (Rupees Fifty Four Crores Only) divided in to 1,75,00,000 (One Crore Seventy Five Lac Only) Equity Shares of Rs. 10/- each, 1,50,000 (One Lac Fifty Thousand Only) 12% Cumulative Redeemable Preference Shares of Rs. 100/- each (Series I) and 15,00,000 (Fifteen Lac Only ) Cumulative Redeemable Preference Shares of Rs. 100/- each (Series II), 10,00,000 (Ten Lac Only ) Cumulative Redeemable Preference Shares of Rs. 100/- each (Series III) and 10,00,000 (Ten Lac Only ) Cumulative Redeemable Preference Shares of Rs. 100/- each (Series IV).

4. Year In retroSpeCt operatIonS:

Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given herein under:

units Cane crushed in (Qtl) Sugar produced in quintals recovery in %

Dwarikesh Nagar (DN) 77,30,481 7,97,890 10.32

Dwarikesh Puram (DP) 83,90,189 8,38,650 10.00

Dwarikesh Dham (DD) 81,39,741 7,44,505 9.15

Total 2,42,60,411 23,81,045

Your Directors are pleased to inform that the recovery recorded at DN plant was the highest in State of Uttar Pradesh.

performance of cogeneration division: metrics of power sold:

2012-13 2011-12 unit power sold in lac units amount in Rs.lacs Power sold in lac units amount in Rs. lacs

DN 262 1,074 255 1,016

DP 648 2,789 628 2,641

DD 772 3,318 869 3,659

total 1,682 7,181 1,752 7,316

performance of Distillery:

During the year 3,431,173 Litres of Industrial Alcohol (previous year 3,809,947 Litres) and 711,883 Ethanol (previous year 576,219) was produced at Dwarikesh Nagar Unit of the Company. In value terms the sale of rectifed spirit was Rs. 836.25 lacs (previous year Rs. 852.84 lacs) & sale of Ethanol was Rs. 268.58 lacs (Previous Year Rs. 230.42 lacs).

5. fInanCIal performanCe:

Financially, year 2012-13 proved to be one most challenging year in the recent history of the Company and the sugar industry in Uttar Pradesh. The sugar prices were relatively better to begin with. However since January, 2013 they are on downward spiral. Deregulation of the sector on the sell-side and consequent lifting of curbs on the quantity that each sugar mill could sell every month / quarter also accentuated the free fall in the prices. The abolition of levy obligation did provide some succour to the industry. Given the backdrop of higher domestic and international production, sugar prices are now below Rs. 3,000 per quintal with no trace of any early resurrection. However sharp increase in the SAP announced by the State Government from Rs. 240 per quintal in 2011-12 to Rs. 280 per quintal in 2012-13 proved to be catastrophic.

Sharp increase in the raw material price coupled with declining sugar prices had its impact on the bottom-line of your Company. Your Company posted after tax loss of Rs. 19.36 crores as against after tax loss of Rs. 11.31 crores in the previous year. However, your Company did manage to earn minuscule cash proft.

Financial highlights are given below:

Lac Rs.

particulars 2012-13 % 2011-12 %

Net Sales 92,761 100.00 69,860 100.00

EBIDTA 7,183 7.74 9,611 13.76

EBDTA 127 0.14 1,725 2.47

EBT (3,192) (3.44) (1,564) (2.25)

Following analogy can be drawn from the above numbers:

1. EBIDTA in absolute terms as well as in percentage terms is lesser than the EBIDTA for the earlier year. The EBIDTA in absolute terms is lesser by approximately Rs. 24 crores and in % terms is 7.74%, down by more than 6%.

2. The non satisfactory fnancial results are on account of:

a. Irrationally high sugarcane price (SAP of Rs. 280 as against SAP of Rs. 240 last year), an increase of more than 16%.

b. Non commensurate increase in the selling price of sugar. On full year basis the Company realised a price of Rs. 3,151 per quintal on the quantity of sugar sold. This is as compared to an average price realisation of Rs. 2,897 per quintal in the previous year (after factoring for 10% of levy sugar sold at a price of less than Rs. 2,000 per quintal).

3. Net Sales during the year is higher on account of higher quantity of sugar sold. Post deregulation of the sector effective 1st April, 2013, sugar companies were at liberty to sell sugar at any time and any quantity they deemed appropriate depending on their market perception. This resulted in many companies liquidating their sugar stock with a view to shrink their interest burden. The company produced 23.81 lac quintals of sugar as compared to 22.87 lac quintals of sugar produced in the previous year.

4. EBIDTA margin of your Company is lower on account of increase in raw material cost and less than commensurate increase on the selling price of sugar. The dichotomy of the sugar business is that while the price of fnished product is market driven, the price of raw material price is regulated by the Government and is always skewed against the sugar mills.

5. Company''s efforts to recalibrate its debt profle with a view to augment the cash fows and with a view to rationalise interest costs continues.

6. Cane & SuGar polICY:

The main policies of the government in relation to the sugar industry during the year were:

1. The ratio of levy and free sale sugar was 10:90 for the period up to 30th September, 2012 & thereafter levy obligation was abolished pursuant to adoption of recommendations contained in the report of Dr. Rangarajan.

2. The Fair & Remunerative Price (FRP) for the crushing season 2012-13 was Rs. 170 per quintal and the same has now been increased to Rs. 210 per quintal for 2013-14.

3. Chronology of SMP announced by the Central Government on the basis of recovery is given herein under:

Season SMP/F&RP (Rs. Quintal)

2000-01(SMP) 59.50*

2001-02 62.05*

2002-03 64.50*

2002-03 (Revised) 69.50*

2003-04 73.00*

2004-05 74.50*

2005-06 79.50&

2006-07 80.25&

2007-08 81.18&

2008-09 81.18&

2009-10

(SMP since replaced by F&RP) 129.84@

2010-11 139.12@

2011-12 145.00@

2012-13 170.00@

* Linked to recovery of 8.50 % & Linked to recovery of 9% @Linked to recovery of 9.50%

4. The Company is required to pay State Advised Price (SAP) .For the crushing season 2011-12, the State Government of Uttar Pradesh announced SAP of Rs. 240 per quintal of sugarcane of the general variety to be delivered at the factory gate, which has now been steeply increased to Rs. 280 per quintal for general variety, an increase of Rs. 40 per quintal for the season 2012-13 .The said increase is sharp rise of around 17% for the General variety of Sugar cane and is another blow to the beleaguered sugar industry.

7. DIreCtorS

Pursuant to Article 146 of the Articles of Association of the company, Shri B.K. Agarwal & Shri K. N. Prithviraj retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Shri L.P. Aggarwal who was appointed as an Additional Director of the company with effect from 27th November, 2013 by the Board of Directors and holds offce upto the date of ensuing Annual General Meeting under section 269 of the Companies Act, 1956 ( the act) read with Article 132 of the Atricles of Association of the Company, but being eligible, offers himself for re-appointment and in respect of whom the Company has received a notice in writing under section 257 of the Act from a shareholder signifying his intention to propose Shri L.P. Aggarwal as a candidate for the offce of a Director.

8. Statement of DIreCtor''S reSponSIBIlItIeS

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

(i) in the preparation of the annual accounts, applicable Accounting Standards have been followed with proper explanation relating to material departures, if any;

(ii) 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 fnancial year and of the proft of your company for that period;

(iii) Taken proper & suffcient care for the maintenance of 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) Prepared the Annual accounts on a going concern basis.

9. Corporate GoVernanCe

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certifcate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

10. emploYeeS

In accordance with the provisions of sections 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors report, as an addendum thereto. However, as per the provisions of section 219 (1)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Offce of the Company.

11. ConSerVatIon of enerGY, teChnoloGY aBSorptIon anD foreIGn exChanGe earnInGS anD outGo:

Pursuant to section 217 (1)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure –I and form a part of this report.

12. SuBSIDIarY CompanY''S report:

The Company presently do not have any subsidiary in terms of provisions of Companies Act, 1956 However, Pursuant to provisions of section 2(87) (ii) of the Companies Act, 2013, Dwarikesh Informatics Limited is a subsidiary of the company as on September 30, 2013. However, provisions relating to consolidation of accounts pursuant to section 129 (3) of the Companies Act, 2013 is still not notifed to be operational as on date.

13. auDItorS & auDItor''S report:

There are no qualifcations in the Auditors report.

The Auditors, M/s. S S Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2013-14 and fx their remuneration. M/s S S Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

Regarding observation in point no. xvii in Annexure to Auditors report, Company is in the process of arranging long term funds to set right the mismatch.

14. CoSt auDItorS:

As per the directions issued by the Central Government pursuant to the provisions of section 233B of the Companies Act, 1956 M/s Ramanath Iyer & Co, Cost Accountants were appointed to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended September 30, 2013.

The cost audit report for the fnancial year ended September 30, 2013 shall be fled by the cost auditors latest by March 28, 2014 which shall be well within the due date.

15. puBlIC DepoSItS

The Company does not have any fxed deposits at the beginning of the year in terms of Section 58A of the Companies Act, 1956. The Company did not accept any deposits during the year.

16. aCknoWleDGement

Your directors wish to place on record their sincere gratitude and appreciation to its share holders, sugar cane growers, employees, bankers, fnancial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organisation.

By Order of the Board

for DWarIkeSh SuGar InDuStrIeS lImIteD

G. r. morarka

CHAIRMAN & MANAGING DIRECTOR

VIJaY S Banka

WHOLE TIME DIRECTOR & CFO

Place : New Delhi B J maheShWarI

Dated : November 27, 2013 WHOLE TIME DIRECTOR & CS Cum CCO

---

Sep 30, 2012

The Members of the Company,

The Directors take pleasure in presenting their Nineteenth Annual Report together with the audited accounts for the year ended 30th September 2012.

1. FINANCIAL RESULTS

INR in lacs INR in lacs Year ended Year ended 30.09.2012 30.09.2011

Gross profit before depreciation, interest & tax 9,610.93 7,483.40

Less: Depreciation 3,289.04 3,271.80

Finance Costs 7,885.90 5,977.83

Profit / (Loss) before tax and exceptional items (1,564.01) (1,766.23)

Less: Provision for taxes (including previous year) - 128.39

Deferred tax liability (433.47) (578.31)

Profit /(Loss) after tax (1,130.54) (1,316.31)

Add: Balance brought forward from previous year (2,134.87) (818.56)

Amount available for appropriation (3,265.41) (2,134.87)

Appropriations: - -

Balance carried forward to next year (3,265.41) (2,134.87)

(3,265.41) (2,134.87)

2. DIVIDEND

In view of losses during the year, your directors are compelled to skip dividend on 8% and 12% Cumulative Redeemable Preference Shares and also on the Equity Shares for the year.

The dividend on Cumulative Redeemable Preference Shares (both 8% & 12% series) are being accumulated and will be paid in the year of profit.

3. RECLASSIFICATION OF SHARE CAPITAL

The company has reclassified its unissued Authorised share capital by replacing 100,00,000 equity shares of Rs 10 each with 1,000,000 cumulative redeemable preference share of Rs 100 each during the year by creating a new series III cumulative redeemable preference share by obtaining shareholders approval in Extra Ordinary General meeting held on 10th September,2012.The reclassified Authorised Share capital is as follows: The Authorised Share Capital of the Company is Rs. 44,00,00,000/- (Rupees Forty Four Crores Only) divided in to 1,75,00,000 (One Crore Seventy Five Lac Only) Equity Shares of Rs. 10/- each, 1,50,000 (One Lac Fifty Thousand Only) 12% Cumulative Redeemable Preference Shares of Rs. 100/- each (Series I) and 15,00,000 (Fifteen Lac Only ) Cumulative Redeemable Preference Shares of Rs. 100/- each (Series II), 10,00,000 (Ten Lac Only ) Cumulative Redeemable Preference Shares of Rs. 100/- each (Series III).

4. YEAR IN RETROSPECT OPERATIONS:

Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given herein under:

Units Cane crushed in MT Sugar produced in quintals Recovery in %

Dwarikesh Nagar (DN) 7,66,276 778198 10.16

Dwarikesh Puram (DP) 7,88,832 767410 9.73

Dwarikesh Dham (DD) 8,15,736 741195 9.09

Total 23,70,844 22,86,803

Your Directors are pleased to inform that the recovery recorded at DN plant was amongst the highest in State of Uttar Pradesh.

Performance of cogeneration division: Metrics of power sold:

2011-12 2010-11

Unit Power sold in lac units Amount in Rs. lacs Power sold in lac units Amount in Rs. lacs

DN 255 1,016 222 867

DP 628 2,641 538 2,212

DD 869 3,659 606 2,490

Total 17521 7,3161 1,3661 5,569

Performance of Distillery:

During the year 38,09,947 Litres of Industrial Alcohol (previous year 4,347,511 Litres) and 5,76,219 Ethanol (previous year NIL) was produced at Dwarikesh Nagar Unit of the Company. In value terms the sale of rectified spirit was Rs 852.84 lacs (previous year Rs. 1,183.28 lacs) & sale of Ethanol was Rs. 230.42 lacs (Previous Year NIL).

5. FINANCIAL PERFORMANCE:

Financially, year 2011-12 continued to be difficult. The sugar prices remained subdued and range-bound. Throughout the year price of free sale sugar hovered in the band of Rs. 2,700 and Rs. 3,000 per quintal. However, domestic sugar prices started reviving from July, 2012 and are currently hovering around Rs. 3,400 per quintal. Levy sugar produced during 2011-12 was sold at Rs. 1,953 per quintal. SAP for sugarcane was announced at Rs. 240 per quintal, a hopping increase of 17% for the general variety of sugarcane.

Surplus sugar production in the nation and flip flop on lifting of embargo on export of sugar pegged the sugar prices at lower levels. Lower selling price of sugar and other by-products, had its impact on the bottom-line of your Company. Your Company posted after tax loss of Rs. 11.31 crores as against after tax loss of Rs. 13.16 crores in the previous year. However your Company earned cash profits during the year.

Financial highlights are given below:

Lac/Rs.

Particulars 2011-12 % 2010-11 %

Net Sales 69,860 100.00 59,313 100.00

EBIDTA 9,611 13.76 7,483 12.62

EBDTA 1,725 2.47 1,505 2.53 EBT (1,564) (2.25) (1,766) (2.98)

Following analogy can be drawn from the above numbers:

1. EBIDTA in absolute terms as well as in percentage terms is better than the EBIDTA for the earlier year. The EBIDTA in absolute terms is higher by approximately Rs. 21 crores and in % terms is at least 1% better.

2. Evidently drag on the profitability was caused by:

a. Higher sugarcane cost (SAP of Rs. 240 as against SAP of Rs. 205 last year).

b. Lower per quintal realisation on sale of sugar.

c. Incremental sugarcane of Rs. 22.68 crores paid pertaining to crushing 2007-08, pursuant to order of Supreme Court.

d. Higher interest costs. Interest cost during the year at Rs. 79 crores was higher by Rs. 19 crores over the interest cost of previous year. Incidence of interest was higher on account the following reasons:

e. Carrying of larger inventory and consequently higher requirement of working capital.

f. Multiple upward revisions in interest rates by Banks.

3. Net Sales during the year is higher on account of higher quantity of sugar sold. Production of sugar was also at least 27% more than the production of sugar in the previous crushing season.

4. EBIDTA margin of your Company is better on account of revival of sugar prices in the last quarter of the year. Plant capacity configuration and enhanced share of power income in the total revenue stream has also played a major role in improvement of EBIDTA margins.

5. Though your Company continues to ruthlessly and relentlessly attack costs, it is helpless in putting a lid on the interest cost. The Company strives to rationalise its interest cost by recalibrating its debt profile, wherever possible.

6. CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were:

1. The ratio of levy and free sale sugar was 10:90 for the crushing season 2011-12.

2. The price of levy sugar for Central U.P. has been increased during the year to Rs. 1959.41 per quintal for the sugar season 2011-12.

3. The Fair & Remunerative Price (FRP) for the crushing season 2010-11 was Rs. 139.12 per quintal and the same has now been increased to Rs. 145 per quintal for 2011-12.

4. Chronology of SMP announced by the Central Government on the basis of recovery is given herein under:

Season SMP Rs. / Quintal.

2000-01 59.50

2001-02 62.05

2002-03 64.50

2002-03 (Revised) 69.50

2003-04 73.00

2004-05 74.50

2005-06 79.50

2006-07 80.25

2007-08 81.18

2008-09 81.18

2009-10 107.76

2009-10 (SMP replaced by FRP) 129.84

2010-11 139.12

2011-12 145.00

5. For the crushing season 2010-11, the State Government of Uttar Pradesh announced State Administered Price (SAP) of Rs. 205 per quintal of sugarcane of the general variety to be delivered at the factory gate, which has now been steeply increased to Rs. 240 per quintal for general variety, an increase of Rs. 35 per quintal and to Rs. 250 per quintal for early variety,an increase of Rs. 40 per quintal for the season 2011-12 .The said increase is sharp rise of around 17% for the General variety of Sugar cane and is another blow to the beleaguered sugar industry.

7. DIRECTORS

During the year, Shri S.S. Vaidya, Shri L N Heda & Shri Harshvardhan Neotia have resigned from their directorships in the company. Pursuant to Article 146 of the Articles of Association of the company, Shri B.K.Agarwal & Shri K.N.Prithviraj, retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

8. STATEMENT OF DIRECTOR''S RESPONSIBILITIES

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

(i) in the preparation of the annual accounts, applicable Accounting Standards have been followed with proper explanation relating to material departures, if any;

(ii) 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) Taken proper & sufficient care for the maintenance of 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) Prepared the Annual accounts on a going concern basis.

9. CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

10. EMPLOYEES

In accordance with the provisions of sections 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors report, as an addendum thereto. However, as per the provisions of section 219 (1)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 217 (1)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure -I and form a part of this report.

12. SUBSIDIARY COMPANY''S REPORT:

The company is not having any subsidiary as on September 30, 2012.

13. AUDITORS & AUDITOR''S REPORT:

There are no qualifications in the Auditors report.

The Auditors, M/s S S Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2012-13 and fix their remuneration. M/s S S Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

The observation regarding conversion of free sugar into levy sugar & non provision of Society Commission have been explained satisfactorily in note no 4 & 14 respectively of Schedule B to the Notes on accounts.

14. COST AUDITORS:

As per the directions issued by the Central Government pursuant to the provisions of section 233B of the Companies Act, 1956 M/s Ramanath Iyer & Co, Cost Accountants, were appointed to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended September 30, 2012.

The cost audit report for the financial year ended September 30, 2012 shall be filed by the cost auditors latest by March 28, 2013 which shall be well within the due date.

15. PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 58A of the Companies Act, 1956. The Company did not accept any deposits during the year.

16. ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its share holders, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organisation.

By Order of the Board

For DWARIKESH SUGAR INDUSTRIES LIMITED

G. R. MORARKA

CHAIRMAN & MANAGING DIRECTOR

VIJAY S BANKA

WHOLE TIME DIRECTOR & CFO

B J MAHESHWARI

WHOLE TIME DIRECTOR & CS Cum CCO

Place : Mumbai

Dated : 25th October, 2012

---

Sep 30, 2011

The Directors take pleasure in presenting their Eighteenth Annual Report together with the audited accounts for the year ended 30th September 2011.

1. FINANCIAL RESULTS

INR in lacs INR in lacs Year ended Year ended 30.09.2011 30.09.2010

Gross profit before depreciation, interest & tax 7,487.23 6,500.24

Less: Depreciation 3,271.80 3,205.86

Interest 5,977.83 4,630.69

Profit / (Loss) before tax and exceptional items (1,762.40) (1,336.31)

Less: Provision for taxes (including previous year) 132.16 12.46

Fringe Benefit Tax 0.06 (2.68)

Deferred tax liability (578.31) (440.55)

Profit after tax (1,316.31) (905.55) Add: Balance brought forward from previous year (818.56) 86.99

Amount available for appropriation (2,134.87) (818.56) Appropriations:

Balance carried forward to next year (2,134.87) (818.56)

(2,134.87) (818.56)

2. DIVIDEND

In view of losses during the year & on account of inadequate amount available in Profit & Loss Account brought forward from the earlier year, your directors are compelled to skip dividend on 8% and 12% Cumulative Redeemable Preference Shares and also on the Equity Shares for the year.

The dividend on Cumulative Redeemable Preference Shares (both 8% & 12% series) are being accumulated and will be paid in the year of profit.

3. YEAR IN RETROSPECT OPERATIONS:

Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given herein under:

Units Cane crushed in MT Sugar produced in quintals Recovery in %

Dwarikesh Nagar (DN) 688,234 710,349 10.30

Dwarikesh Puram (DP) 587,003 557,845 9.47

Dwarikesh Dham (DD) 610,571 522,085 8.55

Total 1,885,808 1,790,279 -

Your Directors are pleased to inform that the recovery recorded at DN plant was the highest in State of Uttar Pradesh.

Performance of cogeneration division: Metrics of power sold:

2010-11 2009-10 Unit Power sold in lac units Amount in Rs lacs Power sold in lac units Amount in Rs lacs

DN 222 867 203 773

DP 538 2,212 627 2,541

DD 606 2,490 559 2,257

Total 1,366 5,569 1,389 5,571

Performance of Distillery:

During the year 4,347,511 Liters of Industrial Alcohol (previous year 4,226,785 Liters) and no Ethanol (previous year 516,214) was produced at Dwarikesh Nagar Unit of the Company. In value terms the sale of rectified spirit was Rs 1,183.28 lacs (previous year Rs 882.13 lacs).

4. FINANCIAL PERFORMANCE:

Financially, if year 2009-10 was challenging, year 2010-11 was frustrating. Non-levy sugar prices remained stagnant and range bound between Rs. 2,700 and Rs. 2,800 per quintal. While the yearly average in 2009-10 was close to Rs. 3,000 per quintal, the same was around Rs. 2,750 per quintal in the year 2010-11. Central Government continued with its policies aimed at pegging the sugar price at lower levels. SAP for sugarcane was announced at Rs. 205 per quintal for the general variety of sugarcane.

Surplus sugar production in the nation and continued embargo on export of sugar pegged the sugar prices at lower levels. Though some exports were allowed, it was too little and too late. Lower selling price of sugar and other by-products, had its impact on the bottom-line of your Company. Your Company posted after tax loss of Rs 13.16 crores as against after tax loss of Rs 9.06 crores in the previous year. Only redeeming feature of the results is that the Company has earned cash profits.

Financial highlights are given below:

Lac/Rs

Particulars 2010-11 % 2009-10 %

Net Sales 58,404 100.00 55,507 100.00

EBIDTA 7,488 12.82 6,500 11.71

EBDTA 1,510 2.59 1,870 3.37

EBT (1,762) (3.02) (1,336) (2.41)

Following analogy can be drawn from the above numbers:

1. EBIDTA in absolute terms as well as in percentage terms is better than the EBIDTA for the earlier year. The EBIDTA in absolute terms is higher by approximately Rs 10 crores and in % terms is at least 1% better.

2. Evidently the main drag on the profitability was caused by higher interest costs. Interest cost during the year at Rs 59.78 crores was higher by Rs 13.47 crores over the interest cost of previous year. Incidence of interest was higher on account the following reasons:

a. Carrying of larger inventory and consequently higher requirement of working capital

b. Multiple upward revisions in interest rates by Banks.

3. Net Sales during the year is marginally higher and production of sugar more or less static as compared to previous year.

4. Though average realisation on sale of sugar was lesser, raw material cost was also lower. Year 2009-10 was exceptional in the sense that sugar mills in Uttar Pradesh vied with one another and ended up paying higher than State mandated SAP. However, during the current year Mills procured sugarcane at State mandated SAP

5. EBIDTA margin of your Company for the year could have been a trifle better. However command area of the DP plant was devastated by floods. As a result the yield at farm level and recovery & crushing at plant level suffered. This again was an unfortunate and exceptional development.

6. Regardless of all these factors EBIDTA margin of your company is better than the EBIDTA margin many peer group sugar Companies. Comparatively better EBIDTA margins bears testimony of overall efficiencies and lower cost of production. Plant capacity configuration and enhanced share of power income in the total revenue stream has also played a major role in improvement of EBIDTA margins.

7. Though your Company continues to ruthlessly and relentlessly attack costs, it is helpless in putting a lid on the interest cost. The financial numbers of the Company are undergoing grind mainly on account of interest cost. The Company strives to rationalise its interest cost by recalibrating its debt profile, wherever possible.

5. CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were

1. The ratio of levy and free sale sugar was 10:90 for the crushing season 2010-11.

2. The price of levy sugar for Central U.P. has been increased during the year to Rs. 1900.88 per quintal for the sugar season 2010-11.

3. The Fair & Remunerative Price (FRP) for the crushing season 2010-11 was Rs. 139.12 per quintal and the same has now been increased to Rs. 145 per quintal for 2011-12.

4. Chronology of SMP announced by the Central Government on the basis of recovery is given herein under:

Season SMP Rs/ Quintal.

2000-01 59.50

2001-02 62.05

2002-03 64.50

2002-03 (Revised) 69.50

2003-04 73.00

2004-05 74.50

2005-06 79.50

2006-07 80.25

2007-08 81.18

2008-09 81.18

2009-10 107.76

2009-10 (SMP replaced by FRP) 129.84

2010-11 139.12

2011-12 145.00

5. For the crushing season 2010-11, the State Government of Uttar Pradesh announced State Administered Price (SAP) of Rs. 205 per quintal of sugarcane of the general variety to be delivered at the factory gate, which has now been steeply increased to Rs. 240 per quintal for general variety, an increase of Rs. 35 per quintal and to Rs. 250 per quintal for early variety, an increase of Rs. 40 per quintal for the season 2011-12 .The said increase is sharp rise of around 17% for the General variety of Sugar cane and is another blow to the beleaguered sugar industry.

6. DIRECTORS

During the year, Shri M G Diwan and Shri K P Medhekar have resigned form their directorships in the company. Pursuant to Article 146 of the Articles of Association of the company, Shri S.S. Vaidya, Shri K.N.Prithviraj and Shri B.K.Agarwal, retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Shri B J Maheshwari and Shri Vijay S Banka have been re-appointed for a period of 3 years from May 1, 2012 to 30th April,2015. The terms of their remuneration is set out in the Notice of the Annual General Meeting.

7. STATEMENT OF DIRECTOR''S RESPONSIBILITIES

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

(i) in the preparation of the annual accounts, applicable Accounting Standards have been followed with proper explanation relating to material departures, if any;

(ii) 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) Taken proper & sufficient care for the maintenance of 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) Prepared the Annual accounts on a going concern basis.

8. CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

9. EMPLOYEES

In accordance with the provisions of sections 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors report, as an addendum thereto. However, as per the provisions of section 219 (1)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 217 (1)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure –I and form a part of this report.

11. SUBSIDIARY COMPANY''S REPORT:

During the year, company has divested 60% stake (30,000 equity shares of Rs. 10 each) in its wholly owned subsidiary viz. Faridpur Sugars Limited (FSL) which was formed on 9th February, 2010. Therefore, FSL is now more subsidiary company of Dwarikesh Sugar Industries Limited and hence the requirement of furnishing details of the subsidiary company under section 212 of the Companies Act, 1956 is not applicable.

12. AUDITORS & AUDITOR''S REPORT:

There are no qualifications in the Auditors report.

The Auditors, M/s S S Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2011-12 and fix their remuneration. M/s S S Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

The observations regarding cane price and conversion of free sugar into levy sugar have been explained satisfactorily in note no 12 and 13 respectively of Schedule B to the Notes on accounts.

13. PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 58A of the Companies Act, 1956. The Company did not accept any deposits during the year.

14. ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its share holders, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organisation.

By Order of the Board For DWARIKESH SUGAR INDUSTRIES LIMITED

VIJAY S BANKA

WHOLE TIME DIRECTOR & CFO

B J MAHESHWARI

WHOLE TIME DIRECTOR & CS Cum CCO Place : Mumbai

Dated : 28th November, 2011

---

Sep 30, 2010

The Directors take pleasure in presenting their seventeenth Annual Report together with the audited accounts for the year ended 30th September 2010.

1. FINANCIAL RESULTS

Rs in lacs Rs in lacs Year ended Year ended 30.09.2010 30.09.2009

Gross profit before depreciation, interest & tax 6,500.24 12,597.84

less: Depreciation 3,205.86 3,295.50

Interest 4,630.69 6,164.42

Profit / (Loss) before tax and exceptional items (1,336.31) 3,137.92

Less: provision for taxes (including previous year) 12.46 (130.65)

Fringe Benefit Tax (2.68) 4.24

Deferred tax liability (440.55) 756.67

Profit after tax (905.55) 2,507.66

Add: Balance brought forward from previous year 86.99 (1,672.69)

Amount available for appropriation (818.56) 834.97

Appropriations:

Proposed Dividend

- On equity shares Rs 244.72

- On preference shares Rs 266.40

Additional tax on dividend Rs 86.86

Transferred to general reserve Rs 150.00

Balance carried forward to next year (818.56) 86.99

(818.56) 834.97



2. DIVIDEND

In view of losses during the year & on account of inadequate amount available in Profit & loss account brought forward from the earlier year, your Directors are compelled to skip dividend on 8% and 12% Cumulative Redeemable preference shares as also on equity shares for the year.

The Dividend on Redeemable Cumulative preference shares (both 8% & 12% series) are being accumulated & will be paid in the year of profit.

3. YEAR IN RETROSPECT OPERATIONS:

Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given herein under:

Units Cane crushed in MT Sugar produced in Recovery in % quintals

Dwarikesh Nagar (DN) 6,61,507 6,83,165 10.31%

Dwarikesh Puram (DP) 6,48,301 6,34,460 9.77%

Dwarikesh Dham (DD) 5,85,508 5,14,082 8.77%

Total 18,95,316 18,31,707 9.67%



Your Directors are pleased to inform that the recovery recorded at DN plant was the highest in state of Uttar Pradesh.

Performance of Cogeneration division: Metrics of power Sold:

2009-10 2008-09

Unit Power sold in lac units Amount in Rs lacs Power sold in lac units Amount in Rs lacs

DN 203 773 135 400

DP 627 2,541 307 966

DD 559 2,257 275 868

Total 1,389 5,571 717 2,234

Performance of Distillery:

During the year 4,226,785 litres of Industrial Alcohol (previous year 3,305,401 litres) and 516,214 Llitres of Ethanol (previous year 2,093,983) was produced at Dwarikesh Nagar unit of the Company. In value terms the sale of rectified spirit was Rs 882.13 lacs (previous year Rs 270.70 lacs) and sales of ethanol was NIL (previous year Rs 550.28 lacs).

4. FINANCIAL PERFORMANCE:

From financial perspective, the year 2009-10 was a lacklustre year. The year started of impressively with sugar prices touching a high of Rs 4,200 per quintal in January, 2010. However, Government intervention and a series of measures initiated by the Government dampened the market sentiments and the price reversal thereafter were rapid and fast. the initial estimates of lower cane availability triggered a price war for procurement of sugarcane. While sugar prices plummeted, increase in sugarcane prices beyond SAP was irreversible.

Higher than estimated sugarcane availability coupled with unabated imports resulted in abundant availability of sugar. Government measures aimed at reining in sugar prices resulted in reduced demand for sugar. Institutional sugar consumers, Whole-sellers and retailers who constitute a vital cog in the supply chain operated with bare minimum stocks. Institutional sugar consumers were encouraged to import their sugar requirement directly. the aforesaid factors dealt lethal blow to the market sentiments and sentiments have yet not shown signs of perking up. While the first quarter results were heart cockling, the results in the subsequent quarters doused all the enthusiasm.

The saving grace was that in spite of numerous odds faced by the industry, your Company managed to earn cash profits.

Financial highlights are enumerated herein Under:

lac/Rs

particulars 2009-10 2008-09

Net Sales 55,507 46,188

EBIDTA 6,500 12,598

EBDTA 1,870 6,433

EBT (1,336) 3,138

1. Almost 65% increase in landed cost of sugarcane whereas only 39% increase in average realization of non- levy sugar was mainly responsible for shrinking EBIDTA margins.

2. Though levy sugar price increased by 36% but increase in levy obligation from 10% to 20% had overall adverse impact. Increase in raw material procurement cost was more than commensurate with increase in levy sale price. There was significant drop in the prices of by-products also.

3. EBIDTA margins, though declined during the year, compare favorably with EBIDTA margins of companies in the peer group. Comparatively, better EBIDTA margins bears testimony of overall effciencies and lower cost of production.

4. Since the company is highly leveraged the bottom-line continues to be under stress, though efforts of the Company to rationalize interest costs has paid dividends as the interest cost during the year declined to Rs 47 crores as compared to Rs 62 crores in the previous year.

5. CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were

1. the ratio of levy and free sale sugar was 20:80 for the crushing season 2009-10. However, the same now stands restored to 10:90 for the year 2010-11

2. The price of levy sugar for Central U.P. for the year was raised to Rs 1,808.47 per quintal for the production & supply of levy sugar from 1st October, 2009 as against Rs 1,330.77 per quintal till the last season.

3. The Fair & Remunerative price (FRP) for the crushing season 2009-10 was Rs 129.84 per quintal linked to recovery of 9.50%. the same has been increased to Rs 139.12 per quintal for the season 2010-11.

4. Chronology of SMP announced by the Central Government on the basis of recovery is given herein under:

Season SMP Rs / Quintal.

2000-01 59.50

2001-02 62.05

2002-03 64.50

2002-03 (Revised) 69.50

2003-04 73.00

2004-05 74.50

2005-06 79.50

2006-07 80.25

2007-08 81.18

2008-09 81.18

2009-10 107.76

2009-10 (SMP replaced by FRP) 129.84

2010-11 139.12

5. For the crushing season 2010-11 the state Government of Uttar Pradesh announced state Administered price (SAP) of Rs. 205 per quintal of sugarcane of the general variety to be delivered at the factory gate. this is as against state Administered price (SAP) of Rs. 165 per quintal of sugarcane of the general variety to be delivered at the factory gate for the crushing season 2009-10. the increase in SAP of Rs 40 is unprecedented and does not augur well for the industry.

6. DIRECTORS

Pursuant to Article 146 of the Articles of Association of the company, Shri M.G. Diwan, Shri K.P. Medhekar, Shri Harshvardhan Neotia and Shri K.N.Prithviraj, retire in the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

7. STATEMENT OF DIRECTORS RESPONSIBILITIES

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

(i) In the preparation of the annual accounts, applicable Accounting standards have been followed with proper explanation relating to material departures, if any;

(ii) 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) Taken proper & sufficient care for the maintenance of 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) Prepared the Annual accounts on a going concern basis.

8. CORPORATE GOVERNANCE

As per clause 49 of the listing Agreement with the stock exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

9. EMPOYEES

In accordance with the provisions of sections 217 (2A), read with the Companies (particulars of employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors report, as an addendum thereto. However, as per the provisions of section 219 (1)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EAENINGS AND OUTGO:

pursuant to section 217 (1)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure – I and form a part of this report.

11. SUBSIDIARY COMPANYS REPORT:

Faridpur sugars ltd., (FSL) a wholly owned subsidiary of the Company was incorporated on February 9, 2010. Your company holds the entire 100% equity share capital of FSL. The first accounting year of Faridpur Sugars limited shall end on March 31, 2011 and hence the details of Faridpur sugars limited as required u/s 212 of the Companies Act shall be included in the annual report of the company for the year ended on September 30, 2011.

12. AUDITORS & AUDITORS REPORT:

The Auditors, M/s S S Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2010-11 and fix their remuneration. M/s S S Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

The observations regarding cane price and conversion of free sugar into levy sugar have been explained satisfactorily in note no 12 and 13 respectively of schedule B to the notes on accounts. Further observation regarding funding of long term assets of Rs 53.10 crores through short term loans from bank has been explained under item no xvii of the annexure to Auditors report.

13. PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 58A of the Companies Act, 1956. the Company has not accepted any deposits during the year.

14. ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its share holders, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organisation.

By order of the Board

For DWARIKESH SUGAR INDUSTRIES LIMITED

VIJAY S BANKA

WHOLE TIME DIRECTOR & CFO

B J MAHESHWARI

WHOLE TIME DIRECTOR & CS Cum CCo

Place: New Delhi

Dated: 29th November, 2010

---

Sep 30, 2009

The Directors take pleasure in presenting their Sixteenth Annual Report together with the audited accounts for the year ended 30th September, 2009.

1. FINANCIAL RESULTS:

INR in lacs INR in lacs Year ended Year ended 30.09.2009 30.09.2008

Gross profit before depreciation, interests & tax 12,597.84 4,957.51

Less: Depreciation 3,295.50 2,943.15

Interest 6,164.42 4,947.21

Profif/(Loss) before tax and exceptional items 3,137.92 (2,932.85)

Less: Provision for taxes (including previous year) (130.65) 3.72

Fringe benefit tax 4.24 10.04

Deferred tax liability 756.67 (468.57)

Profit after tax 2,507 66 (2,478.04)

Add: Balance brought forward from previous year (1,672.69) 806.24

Amount available for appropriation 834.97 (1,671.80)

Appropriations:

Proposed Dividend

On equity shares 244.72 --

On preference shares 266.40 --

Additional tax on dividend 86.86 0.89

Transferred to general reserve 150.00 --

Balance carried forward to next year 86.99 (1,672.69)

834.97 (1,671.80)

2. DIVIDEND:

Your directors recommend a payment of dividend at Rs. 12 per preference share of Rs. 100 each on 12 % Cumulative Redeemable Preference Shares for the year 2008-09 & arrear for the year 2007 - 08, aggregating to INR 26.40 lacs.

Your directors also recommend a payment of dividend at Rs. 8 per preference share of Rs. 100 each on 8 % Cumulative Redeemable Preference Shares for the year 2008-09 & arrear for the year 2007-08, aggregating to INR 240 lacs.

Your directors recommend a payment of dividend at INR 1.50 per equity share of Rs. 10 each amounting to INR 244.72 lacs.

Total outgo on account of dividend on Preference Shares (including arrears) and equity shares and additional tax thereon amounts to INR 597.98 lacs

3. YEAR IN RETROSPECT

OPERATIONS.-

Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given herein under:

Units Cane crushed Sugar produced Recovery in % in MT in quintals

Dwarikesh Nagar(DN) 506,474 522,037 10.31

Dwarikesh Puram (DP) 457,562 454,380 9.93

Dwarikesh Dham (DD) 300,658 258,461 8.61

Total 1,264,694 1,234.878 9.77

Your Directors are pleased to inform that the recovery recorded at DN plant was the highest in State of Uttar Pradesh and recovery recoded at DP plant was the second highest in the State.

Performance of co-generation division: metrics of power sold:

2008-09 2007-08 Unit Units of Power Rs. in lacs Units of Power Rs. in lacs

DN 135 400 228 669

DP 307 966 215 667

DD 275 868 173 539

Total 717 2,234 616 1,875

Performance of Distillery:

During the year, 3,305,401 Litres of industrial alcohol (previous year 5,684,611 Litres) and 2,093,983 litres of ethanol (previous year 4,075,725) was produced at Dwarikesh Nagar Unit of the Company. In value terms, the sale of rectified spirit was Rs. 270.70 lacs (previous year Rs 294.13 lacs) and sales of ethanol was Rs. 550.28 lacs (previous year Rs 994.24 lacs).

4. FINANCIAL PERFORMANCE:

From financial perspective, the year 2008-09 was a heart cockling year. A melange of surging sugar prices across the globe and accelerated releases under the sugar sale mechanism, resulted in posting of healthy topline and an equally healthy bottomline. Sugar prices, internationally have gone up and both raw sugar and white sugar prices have posted their 30 years high. Your company has been able to reverse the trend of losses posted in the last two years and has posted earnings after tax of INR 25.08 crores. This is in sharp contrast to the loss of INR 24.78 crores posted in the previous year.

Improvement in financial performance was palpable. Financial highlights are enumerated herein under:

1. Increase in the price of sugar and other by-products. While 10% obligation of levy sugar was sold @ Rs. 1,331, the rate at which it was sold in the earlier years, average realization on sale of free sale sugar increased to Rs. 2,136 per quintal in the current year as compared to average realization of Rs. 1,428 per quintal in the previous year.

2. Liquidation of low value carried forward free sale stock: During the year Company sold 1,999,209 quintals of sugar as compared to 1,528,961 quintals of sugar sold in the previous year. In effect there was significant depletion in the stock levels. Stock of sugar as on 30h September, 2009 was 397,636 as compared to 1,161,967 quintals of sugar stock on the same date last year.

3. The quantitative, year on year, growth in sales was 31%. In value terms, Sales (net of excise duty), at Rs. 461.88 crore is 69% more than the sales of Rs. 272.65 crore clocked in the previous year. The difference in the percentage growth is adequate reflection on the impact of increase in sugar price on the top-line of your Company. Quarter on quarter the price of free sale sugar was on an ascending curve. While in the first quarter, average price realisation was Rs. 1,723 per quintal, it was Rs. 2,064 per quintal in the second quarter, Rs. 2,285 per quintal in the third quarter and Rs. 2,620 per quintal in the last quarter.

4. The expansion executed in the last two years was leveraged expansion. The gearing therefore is on the higher side. However the Company is making all out efforts to not only rationalize interest costs, but is also making concerted efforts to prepay debt. With the upsurge in the price of sugar, the Company is confident that it would deleverage itself substantially in the coming years. The static ratios such as Debt to equity, current ratio among others are on path of recovery.

Noteworthy achievements:

1. Recovery recorded at DN plant was the highest in Uttar Pradesh and recovery recorded at DP plant was the second highest in the State. The coveted first and second position thus belonged to the Companys plants. As far as the recovery is concerned, DN plant has the unique distinction of being among top echelon in Uttar Pradesh since inception. Within a short span of

4 years the DP plant has also established itself in the top echelon.

2. The operating/dynamic ratios of the Company are robust. In fact the EBIDTA margin at 27.28% is one among the best in the peer group.

5. CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were:

1. The ratio of levy and free sale sugar was 10:90 for the crushing season 2008-09. However the same is now revised and is at 20:80.

2. The price of levy sugar for Central UP. for the year continued to be Rs. 1,330.77 per quintal. There has been no increase in the price of levy sugar for the last 5 years. Consequent to the upsurge of domestic sugar prices, Central Government has lifted the ban on import of sugar. Both raw sugar and white sugar are now allowed to be imported liberally. Nearly 3 millions tonne of sugar has already been imported.

3. The statutory minimum price (SMP) of sugarcane for the year was Rs. 81.18 per quintal, linked to sugar recovery of 9% with premium for higher recovery. SMP announced for the season 2009-10 is Rs 107.76 per quintal, linked to 9.50% recovery. The Central Government has replaced SMP by a fair & remunerative price (F&RP) of Rs 129.84 linked to recovery of 9.50% for the year 2009-10. For every 0.10% increase in recovery over 9.50%, mills would be required to pay Rs 1.37 a quintal extra. However the latest development is that the Central Government has scrapped the ordinance which promulgated the applicability of F&RR

4. Chronology of SMPannounced by the Central Government on the basis of recovery is given herein under:

Season SMP Rs./Quintal.

2000-01 59.50

2001-02 62.05

2002-03 64.50

2002-03 (Revised) 69.50

2003-04 73.00

2004-05 74.50

2005-06 79.50

2006-07 80.25

2007-08 81.18

2008-09 81.18

2009-10 107.76

2009-10 (SMP replaced by F&RP) 129.84

5. For the crushing season 2009-10, the State Government of Uttar Pradesh announced State Administered Price (SAP) of Rs. 1 65 per quintal of sugarcane of the general variety to be delivered at the factory gate. This is as against SAP of Rs. 140 per quintal of sugarcane of the general variety to be delivered at the factory gate for the crushing season 2008- 09. The industry has challenged the SAP for the year 2008-

09. Your Company has paid for & accounted purchase of sugarcane at SAP

For the year, 2007-08, the State Government of Uttar Pradesh had announced SAP of Rs. 125 per quintal of sugarcane of the general variety to be delivered at the factory gate. However most of the sugar mills in the State, in pursuance of a Supreme Court order paid and accounted for sugarcane at a price of Rs. 110 per quintal.

The matter of SAP for 2007-08 & 2008-09 is sub-judice and now subject to decisions of courts pending at various stages.

Agitated by the price annou need by both Centra I Government and State Government for the crushing season of 2009-

10, various association and bodies of farmers launched a nation-wide agitation.

The UP Sugar Mills Association in the meantime announced that they shall not only pay SAP but shall in addition pay an incentive of INR 1 5 per quintal. The price thus worked out to INR 180 per quintal of general variety of sugarcane delivered ai factory gate. Not satisfied with the price, the agitation of the farmers continued relentless and they virtually laid seize over the Nations Capital, New Delhi. A broad understanding is now reached among the mills and the leaders representing various factions of farmers. Consensus has now been arrived at a price of INR 190 per quintal. (SAP of INR 165-plus an incentive of INR 25 per quintal).

6. FORFEITURE OF DEPOSIT FOR ISSUE OF WARRANTS:

In accordance with the terms of the issue, the Company has during the year forfeited deposit of a sum of Rs. 59.87 lacs towards allotment of convertible warrants for non exercise of the option by the allottees within the stipulated time limit.

7. DIRECTORS:

Pursuant to Article 146 of the Articles of Association of the company, Mr. S.S. Vaidya, Mr. L.N. Heda and Mr. Balkumar Agarwal, retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Mr. B.J. Maheshwari, Mr. Vijay S. Banka, Mr. K.N. Prithviraj and Mr. Harshvardhan Neotia have been inducted as Additional Directors on the Board during the year. Notices u/s 257 of the Companies Act, 1956 have been received from a shareholder together with requisite deposit signifying his intention to propose their candidature for the appointment of directors.

Mr. G. R. Morarka, Chairman & Managing Directors reappointment falls due on 1st April, 2010 & is sought to be reappointed for the tenure of next three years & the remuneration needs to be fixed accordingly.

8. STATEMENT OF DIRECTORS RESPONSIBILITIES:

As required under the provisions of Section 21 7(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, applicable Accounting Standards have been followed with proper explanation relating to material departures, if any;

(ii) 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) Taken proper & sufficient care for the maintenance of 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) Prepared the annual accounts on a going concern basis.

9. CORPORATE GOVERNANCE:

As per Clause 49 of the Listing Agreement with the stock exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, management discussion and analysis statement forms part of the annual report.

10. EMPLOYEES:

In accordance with the provisions of Sections 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors report, as an addendum thereto. However, as per the provisions of section 219 (l)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 217 (l)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure-I and form a part of this report.

12. AUDITORS & AUDITORS REPORT:

There are no qualifications in the Auditors Report.

The Auditors, M/s. S. S. Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to reappoint the Auditors for the accounting year 2009-10 and fix their remuneration. M/s. S. S. Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

The observations regarding cane price and conversion of free sugar into levy sugar have been explained satisfactorily in note Nos. 13 and 14 respectively of Schedule B to the Notes on accounts. Further observation regarding funding of long term assets of Rs 10.01 crore through short term loan from bank has been explained under item no xvii of the annexure to Auditors report.

13. PUBLIC DEPOSITS:

The Company does not have any fixed deposits at the beginning of the year in terms of Section 58A of the Companies Act, 1 956. The Company did not accept any deposits during the year.

14. ACKNOWLEDGEMENT:

Your directors wish to place on record their sincere gratitude and appreciation to its share holders, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organisation.

By Order of the Board For DWARIKESH SUGAR INDUSTRIES LIMITED

VIJAY S. BANKA WHOLE TIME DIRECTOR & CFO

B.J. MAHESHWARI WHOLE TIME DIRECTOR & CS cum CCO

Place: New Delhi

Dated: 30th November, 2009

---

Sep 30, 2008

The Directors take pleasure in presenting their Fifteenth Annual Report together with the audited accounts for the year ended 30th September 2008.

1. FINANCIAL RESULTS

INR in lacs INR in lacs Year ended Year ended 30.09.2008 30.09.2007

Gross profit before depreciation, interest & tax 4,957.51 1,890.42 Less: Depreciation 2,943.15 1,330.99 Interest 4,947.21 1,846.11 Profit / (Loss) before tax and exceptional items (2,932.85) (1,286.68) Less: Provision for taxes (including previous year) 3.72 61.69 Fringe Benefit Tax 10.04 10.64 Deferred tax liability (468.57) (730.76) Profit after tax (2,478.04) (628.25) Add: Deferred tax liability relating to earlier period - 574.74 Less: amount transferred from general reserve - (574.74) Add: Balance brought forward from previous year 806.24 1,470.20 Amount available for appropriation (1,671.80) 841.95 Appropriations: Proposed Dividend - On equity Shares - - - On preference Shares - 31.28 Additional tax on dividend 0.89 4.43 Transfer to general reserves - - Balance carried forward to next year (1,672.69) 806.24 (1,671.80) 841.95

2. DIVIDEND

In view of losses incurred during the year, your directors do not deem it appropriate to recommend payment of dividend on equity shares of the Company. Your directors are also compelled to skip dividend on 12% & 8% Cumulative redeemable preference Shares.

3. YEAR IN RETROSPECT

OPERATIONS:

Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given herein under:

Units Cane crushed in MT

Dwarikesh Nagar (DN) 721,911 Dwarikesh Puram (DP) 712,989 Dwarikesh Dham (DP) 504,217

Total 1,939,117

Sugar produced Recovery in % in quintals

768,075 10.64 736,265 10.33 517,759 10.27 2,022,099 10.42

This was the maiden year of crushing and production for Dwarikesh Dham unit. It commenced production on the 17th December, 2007.

Your Directors are pleased to inform that the recovery of 10.64% recorded during the crushing season of 2007-08 at the DN plant was the second highest in the State of Uttar Pradesh. The recovery clocked at all the units of your company figures among the top 10 recoveries recorded in the State of Uttar Pradesh.

During the year 5,684,611 Litres of Industrial Alcohol (previous year 7,625,121 Litres) and 4,075,725 Litres of Ethanol (previous year 3,677,066) was produced at Dwarikesh Nagar Unit of the Company. In value terms the sale of rectified spirit was Rs. 294.13 lacs (previous year Rs 816.06 lacs) and sales of ethanol was Rs. 994.24 lacs (previous year Rs 936.32 lacs).

Expansion Plan-status:

During the year the following projects were successfully executed and commissioned.

Units Capacity added

Dwarikesh Puram (DP) 24 megawatts Dwarikesh Dham (DD) 7,500 TCD expandable to 10,000 TCD Dwarikesh Dham (DD) 24 megawatts

Date of commencement Date of grid of production synchronisation / power evacuation

NA 03-02-2008 17-12-2007 NA NA 09-02-2008

The sugar project at Dwarikesh Dham commenced production as per schedule. However there was delay on the part of UPPCL in laying lines for transmission of power from Companys switch yard to their Sub-station. The power evacuation therefore at both DP and DD was delayed. In the coming years your company expects to reap the full benefit of the investment made. The sugar plant as DD is an engineering marvel with state of art machinery and most modern infrastructure.

METRICS OF PRESENT PLANT CAPACITIES:

Units Sugar capacity Distillery (TCD) (KLPD)

Dwarikesh Nagar (DN) 6,500 30 Dwarikesh Puram (DP) 7,500 - Dwarikesh Dham (DD) 7,500 -

Total 21,500 30

Co - generation Supply tostate capacity (MW) Grid(MW)

17 8 33 24 36 24 86 56

4. Convertion of 7.50 lacs of Warrants into Equity Shares

During the year 2006-07 your company had issued 15 Lac Warrants convertible into 15 Lac Equity Shares to Promoter group at a price to be determined as per SEBI formula in accordance with DIP Guidelines. A sum of Rs. 119.73 Lacs was accordingly received as 10% deposit towards allotment of Warrants.

During the year, promoters have exercised their option for conversion of 7.50 lacs warrants & the same have been converted into equity shares w.e.f 1st February, 2008. The necessary approvals have been obtained from BSE & NSE for listing of converted shares on the stock exchanges & these shares are now listed on stock exchanges, subject to applicable lock in restrictions.

The proceeds of the aforesaid allotments is utilised for augmenting long term working capital requirements of the Company.

5. FINANCIAL PERFORMANCE:

The year 2007-08 was an extremely difficult year. Not only have the margins shrunk, they have become negative. Ruthless attack on costs and focus on operating efficiency were primarily responsible for your Company posting cash profits, albeit the company could not help but post net loss.

The year in which most adverse factors were at play coincided with the company executing a major expansion plan involving increase in sugarcane crushing capacity of 7,500 TCD and incremental co - generation capacity to export 48 megawatts of power.

The main factors responsible for the loss are:

- Lower realisation on sale of sugar: The year started with high inventory. At the start of the season it was widely perceived that the year would be yet another year of record production. The prices of sugar during the first 7 to 8 months of the year therefore reached abysmally low levels. The prices started firming up towards the later part of the year. However the average price realised during the year was far from remunerative.

- Higher inventory levels: Higher carried forward stock from earlier year and higher production during the year resulted in sugar mills carrying large inventories thereby incurring additional interest costs and warehousing costs.

- The fall in the price of sugar coincided with the Companys execution of its capacity expansion plan. Since the DD plant commenced sugar production from January 2008 and incremental power capacity became operational from February 2008, full benefit of the expansion was not harnessed during the year where as the costs incurred are already reflected in the numbers.

During the year your Company sold 1,528,961 quintals of sugar as compared to 1,283,847 quintals of sugar sold in the previous year, a year on year growth of 19%. Sales (net of excise duty) in value terms, at Rs. 272.65 crores was 20 % more than the sales of Rs. 226.93 crores recorded in the previous year. Volatility in the selling price of free sale sugar was pronounced as the selling price oscillated between Rs. 1,300 per quintal in December, 2007 to Rs. 1,725 per quintal in August, 2008. The average selling price though during the year was marginally lower at Rs. 1,428 per quintal as compared to Rs. 1,441 per quintal in the last year. The selling price of sugar during the year was far from remunerative.

6. CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were

1. The ratio of levy and free sale sugar was 10:90.

2. The price of levy sugar for Central U.R for the year continued to be Rs. 1,330.77 per quintal.

3. The statutory minimum price (SMP) of sugar cane for the year was Rs. 81.18 per qtl. linked to sugar recovery of 9% with premium for higher recovery.

4. The minimum statutory price announced by the Central Government on the basis of recovery are given below:

Season SMP Rs. / Qtl.

2000-01 59.50 2001-02 62.05 2002-03 64.50 2002-03 (Revised) 69.50 2003-04 73.00 2004-05 74.50 2005-06 79.50 2006-07 80.25 2007-08 81.18 2008-09 81.18

5. During the year 2007-08, the State Government of Uttar Pradesh announced State Administered Price (SAP) of Rs. 125 per quintal of sugarcane of the general variety to be delivered at the factory gate. However most of the sugar mills in the State, in pursuance of a Supreme Court order paid and accounted for a price of Rs. 110 per quintal.

What is galling is that unmindful of the plight of sugar mills, the State Government has for the crushing season of 2008-09 announced SAP of Rs. 140 per quintal for general variety of sugarcane to be delivered at factory gate, a whopping increase of Rs. 15 per quintal over the SAP of previous year. The industry has challenged the SAP for the year 2008-09 as well.

The matter of SAP for 2007-08 & 2008-09 is subjudice and now subject to decisions of courts pending at various stages.

7. PERFORMANCE OF POWER UNIT

During the year 2007-08, 130,806,536 KWH units of Electricity were generated, registering a growth of 68.54 % as compared to 77,612,565 KWH generated in the previous year. From sale of power, your company, during the year earned revenue of Rs. 1,875.31 lacs as compared to Rs. 758.63 lacs, last year, clocking a growth of about 147%. The growth would have been more impressive had there not been delay on the part of UPPCL in laying lines for evacuation of power. In the ensuing crushing seasons, your Company expects to export power at its full capacity throughout the duration of the crushing season, if not more.

8. DIRECTORS

Pursuant to Article 146 of the Articles of Association of the company, Mr. M G Diwan, Mr. K P Medhekar and Mr. S K Neotia, retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

9. Statement of Directors Responsibilities

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

(i) in the preparation of the annual accounts, applicable Accounting Standards have been followed with proper explanation relating to material departures, if any;

(ii) 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) Taken proper & sufficient care for the maintenance of 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) Prepared the Annual accounts on a going concern basis.

10. CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

11. EMPLOYEES

In accordance with the provisions of sections 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors report, as an addendum thereto. However, as per the provisions of section 219(1 )(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 217 (l)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure -I and form a part of this report.

13. AUDITORS & AUDITORS REPORT:

There are no qualifications in the Auditors report.

The Auditors, S S Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2008-09 and fix their remuneration. S S Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

The observations regarding cane price & funding of long term assets of Rs. 54.27 crores through short term loan from a bank have been explained satisfactorily in Note no 14 of Schedule B to the Notes on accounts and item xvii of the annexure to the Auditors report respectively.

14. PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 58A of the Companies Act, 1956. The Company did not accept any deposits during the year.

15. ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its share holders, sugar cane growers, employees, bankers, financial institutions, Central & State Government for their valuable contribution in the growth of the organisation.

By Order of the Board For DWARIKESH SUGAR INDUSTRIES LIMITED

G R MORARKA CHAIRMAN & MANAGING DIRECTOR

Place: Mumbai M.G.DIWAN Dated: 28th November, 2008 DIRECTOR

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Sep 30, 2007

The Directors take pleasure in presenting their Fourteenth Annual Report together with the audited accounts for the year ended 30th September 2007.

1. FINANCIAL RESULTS

INR in lacs INR in lacs Year ended Year ended 30.09.2007 30.09.2006 Gross profit before depreciation, interest & tax 1,890.42 4,562.07 Less: Depreciation 1,330.99 1,220.63 Interest 1,846.11 650.48 Profit / (Loss) before tax and exceptional items (1,286.68) 2,690.96 Less:Provision for taxes (including previous year) 61.69 252.82 Fringe Benefit Tax 10.64 13.22 Deferred tax liability (730.76) 340.56 Profit after tax (628.25) 2,084.36 Add: Deferred tax liability relating to earlier period 574.74 Less: amount transferred from general reserve (574.74) Add: Balance brought forward from previous year 1,470.20 965.75 Amount available for appropriation 841.95 3,050.11 Appropriations: Proposed Dividend - On equity Shares 933.88 - On preference Shares 31.28 13.20 Additional tax on dividend 4.43 132.83 Transfer to general reserves 500.00 Balance carried forward to next year 806.24 1,470.20 841.95 3,050.11

2. DIVIDEND

In view of losses incurred during the year, your directors do not deem it appropriate to recommend payment of dividend on equity shares of the Company.

Your directors are pleased to recommend payment of dividend @ 12% on 12%-Cumulative redeemable preference shares (Rs. 12/- per share of Rs. 100/- each) & 8% on 8% Cumulative redeemable preference Shares (Rs8 per share of Rs 100 each on pro rata basis)

The total amount on account of dividend outgo on preference shares (including additional tax on dividend) will be INR 35.71 lacs.

3. YEAR IN RETROSPECT

OPERATIONS:

During the year 2006-07, Dwarikesh Nagar (DN) plant clocked a production of 886,127 quintals of sugar with a recovery of 10.58% and the Dwarikesh Puram (DP) plant clocked a production of 895,500 quintals of sugar with recovery of 10.07%.

Your Directors are pleased to inform that the recovery of 10.58% recorded during the crushing season of 2006-07 at the DN plant was the highest in the State of Uttar Pradesh.

During the year 7,625,121 Litres of Industrial Alcohol (previous year 4,570,505 Litres) and 3,677,066 Litres of Ethanol (previous year NIL) was produced from Dwarikesh Nagar Unit of the Company. On year to year basis the increase in production is nearly 230%. During the year, your company recorded sales of rectified spirit Rs 816.05 lacs (previous year Rs 957 lakhs) & sales of ethanol Rs 936.32 lacs (previous year NIL) thus registering a growth of 83.11% on sale of industrial alcohol.

Expansion Plans:

During the year your company surged ahead in the execution of its plan to set up 24MW Cogeneration at DP unit & setting up of a new Greenfield Sugar unit of 7,500 TCD capacity (expandable to 10,000 TCD) with 36 MW cogeneration at Dwarikesh Dham (DD). The implementation of expansion plan is as per schedule. Both the plants would be commercially operational in season 2007-08. The capital expenditure plan would involve an outlay of INR 378 crores and the same has been funded by way of recourse to term loans from Banks/Financial institution to the extent of INR 268.30 crores and the balance from internal accruals and the residual proceeds of the GDR issue.

Your Company has entered into two Power purchase agreements; 24MW’s each for Dwarikesh Puram & Dwarikesh Dham units with the Paschimanchal Vidut Vitran Nigam Limited & Madhyanchal Vidut Vitran Nigam Limited respectively for supply of power to state grid for period of 20 years from date of commissioning of plants.

METRICS OF PLANT CAPACITIES (POST EXPANSION):

Units Sugar capacity Distillery (TCD) (KLPD)

Dwarkesh Nagar (DN) 6,500 30 Dwarikesh Puram (DP) 7,500 Dwarikesh Dham (DD) 7,500 Total 21,500 30

Cogeneration Supply to capacity (MW) state Grid(MW)

17 8 33 24 36 24 86 56

4. ALLOTTMENT OF PREFERENCE SHARES AND ALLOTMENT OF 15 LAC WARRANTS COVERTIBLE INTO EQUITY SHARES

During the year the Authorized Share Capital of your Company was increased by Rs 15 crores by creation of 15 lacs Redeemable Cumulative preference Shares of Rs 100 each. The said increase was authorized by shareholders in the Extra Ordinary General meeting held on 30th June, 2007.

During the year your Company issued 15 Lac - 8% Redeemable Cumulative Preference Shares of Rs. 100/ - each on Private Placement basis.

Your company also issued 15 Lac Warrants convertible into 15 Lac Equity Shares to Promoter group at a price to be determined as per SEBI formula in accordance with DIP Guidelines. A sum of Rs. 119.73 Lacs has been received as 10% deposit towards allotment of Warrants.

The proceeds of the aforesaid allotments is being utilised for augmenting long term working capital requirements of the Company.

5. FINANCIAL PERFORMANCE:

The year under review was a defining year for all the wrong reasons as your Company for the first time in its history has posted losses. The losses are inspite of your Company operating its plants at highest levels of efficiencies. Host of factors are responsible for the losses. However the main ones to which the losses are attributable are high mandated fixed sugarcane price and volatile sugar price:

1. High mandated fixed cost of raw material - In continuation of its policy to politically appease farmers, the Government of Uttar Pradesh announced SAP which was higher than that in the previous year and significantly at variance with the more logical SMP.

2. Volatile sugar price: Against the backdrop of increase in sugar production, the price of sugar plummeted to low levels. While production in the country went up by nearly 40%, increase in global production of sugar dealt a double whammy to the fortunes of domestic sugar industry.

3. Structural anomalies: While the sugarcane price applicable to sugar mills in the Southern States is based on SMP, in the State of Uttar Pradesh the sugar mills are compelled to pay SAP which is significantly higher than the SMP. The companies in Uttar Pradesh are therefore at a double disadvantage as compared to their southern peers as not only they have to pay SAP but being far away from the port, freight cost makes it prohibitive to export sugar. The year also witnessed the south based sugar mills making inroads in to the markets which were traditionally the stronghold of UP based sugar mills.

4. Higher inventory levels: Increase in production and ill advised ban on the export of sugar at the beginning of the season not only accelerated the process of fall in sugar prices, but resulted in sugar mills carrying large inventories thereby incurring additional interest costs and warehousing costs.

5. The fall in the price of sugar coincided with the Company’s execution of its capacity expansion plan. The strain on the cash flows was therefore conspicuous.

Although in quantitative terms your Company sold more sugar, its gross Sales registered a marginal decline of 1.69 % to Rs. 244.01crores for the year under the review as compared to gross sales of Rs. 248.21 crores recorded in the previous year. Volatility in the selling price of sugar was pronounced as average selling price (including excise duty) registered a fall of 16.58% (From Rs. 1,815 per quintal in the previous year to Rs. 1,514 during the year). The saving grace though has been that your Company has not incurred cash losses during the year.

6. CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were 1. The ratio of levy and free sale sugar was 10:90.

2. The price of levy sugar for Central U.P. for the year continued to be Rs. 1,330.77 per quintal.

3. The statutory minimum price (SMP) of sugar cane for the year was Rs. 80.25 per qtl. linked to sugar recovery of 9% with premium for higher recovery.

4. The minimum statutory price announced by the Central Government on the basis of recovery are given below:

Season SMP Rs. / Qtl.

2000-01 59.50 2001-02 62.05 2002-03 64.50 2002-03 (Revised) 69.50 2003-04 73.00 2004-05 74.50 2005-06 79.50 2006-07 80.25 2007-08 81.18

5. However the fixation of State Advised Price (SAP) was bereft of any logic as the same was arbitrarily increased by Rs. 10 per quintal over the previous year’s price. The price payable for the year was Rs. 125 per quintal for the normal variety of sugarcane to be delivered at the factory gate.

7. PERFORMANCE OF POWER UNIT

During the year 77,612,565 KWH units of Electricity were generated through steam registering a growth of 52.10 % as compared to 51,027,636 KWH generated in the previous year. The external gross revenue from power sold registered a growth of 41.96 % to Rs. 758.63 Lacs as compared to Rs.534.38 lacs in the previous year.

8. DIRECTORS

Pursuant to Article 146 of the Articles of Association of the company, Mr. L.N. Heda, Mr. S.S. Vaidya and Mr. Balkumar Agarwal, retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

9. STATEMENT OF DIRECTOR’S RESPONSIBILITIES

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

(i) in the preparation of the annual accounts, applicable Accounting Standards have been followed with proper explanation relating to material departures, if any;

(ii) 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) Taken proper & sufficient care for the maintenance of 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) Prepared the Annual accounts on a going concern basis.

10. CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

11. EMPLOYEES

As required by the provisions of sub-section (2A) of Section 217 of the Companies Act, 1956 as amended, read with the Companies (Particulars of Employees) Rules, 1975 the names and other particulars of the employees are set out in Annexure - I to the Director’s Report.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 217 (1)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure -II and form a part of this report.

13. AUDITORS & AUDITOR’S REPORT:

There are no qualifications in the Auditors report. However, the Auditor’s under the Companies (Auditor’s Report) Order 2003 as amended by the Companies Auditors Report Order (Amendment) Order, 2004 have reported under Clause xvii in Annexure to the Auditor’s report that long term assets have been financed through short term funds in the form of Project Creditors and other Project related liabilities of Rs.51.25 crores. On account of present adverse scenario prevailing in the Industry resulting from surplus production and depressed sugar prices, there is an over all recession in the Sugar Industry and has led to the situation of losses. Therefore, the company could not generate anticipated internal accruals and had to recourse in the interim funding through short term loans.. However, the Company is making all efforts to tie up the requisite long term funds to square off these liabilities in the near future.

The Auditors, M/s S.S.Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2007-08 and fix their remuneration. M/s S.S.Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

14. PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 58A of the Companies Act, 1956. The Company did not accept any deposits during the year.

15. ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its share holders, sugar cane growers, employees, bankers, financial institutions, Central & State Government for their valuable contribution in the growth of the organisation.

By Order of the Board For DWARIKESH SUGAR INDUSTRIES LIMITED

G R MORARKA CHAIRMAN & MANAGING DIRECTOR Place: New Delhi M G DIWAN Dated: 26th November, 2007 DIRECTOR

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Sep 30, 2006

The Directors take pleasure in presenting their Thirteenth Annual Report together with the audited accounts for the year ended 30th September 2006.

FINANCIAL RESULTS

Rs. in Lakhs Rs. in Lakhs Year ended Year ended 30.09.2006 30.09.2005

Gross profit before depreciation, interest & tax 4562.07 4687.86 Less : Depreciation 1220.63 550.16 Interest 650.48 593.58 Profit before tax and exceptional items 2690.96 3544.12 Less : Exceptional Item - 20.92 Profit before tax and after exceptional item 2690.96 3523.20 Less : Provision for taxes (including previous year) 252.82 303.57 Fringe Benefit Tax 13.22 5.45 Deferred tax liability 340.56 554.20 Profit after tax 2084.36 2659.98 Add : Balance brought forward from previous year 965.75 680.43 Amount available for appropriation 3050.11 3340.41 Appropriations : Interim Dividend on Equity Shares - 753.88 Proposed Dividend - On equity Shares 933.88 - - On preference Share 13.20 13.20 Additional tax on dividend 132.83 107.58 Transfer to general reserves 500.00 1500.00 Balance carried forward to next year 1470.20 965.75 3050.11 3340.41

DIVIDEND

The directors recommend a payment of dividend @ 60% (Rs.6/- per equity share of Rs. 10/- each) on Equity shares of the Company.

The directors are pleased to recommend payment of dividend @ 12% on 12% - Cumulative redeemable preference shares (Rs. 12/- per share of Rs. 100/- each).

The total amount on account of dividend outgo (including additional tax on dividend) will be Rs. 1079.91 Lakhs.

YEAR IN RETROSPECT

OPERATIONS:

During the year, the new sugar plant at Dwarikesh Puram commenced its operation w.e.f. 1st January, 2006. The sugar plant has 7500 TCD capacity with 9MW Co-generation for captive use. In the first year the plant could be run at 45% of it's installed capacity owing to various deficiencies observed in the equipments supplied by one of the suppliers and need for some modifications in other equipments. Suitable remedies have already been taken in this regard and the company has already rectified the problems. However, for carrying out various modifications/rectifications in the plant, it was decided to take the plant under major maintenance w.e.f. 16th April, 2006. Accordingly, the direct and incidental cost relating to such modification/maintenance have been capitalised. The company is confident of attaining the rated capacity and optimum efficiencies in the forthcoming season.

During the year, your company crushed 72.05 Lac quintals of sugar cane and produced 7.27 Lac quintals of sugar at it's existing Dwarikesh Nagar Unit as against crushing of 80.15 Lakhs quintals of sugar cane & production of 8.40 Lakhs quintals in the previous year and crushed 33.94 Lakhs quintals of sugar cane and produced 3.46 lac quintals of sugar at it's new Dwarikesh Puram Unit.

The Company achieved a recovery of 10.10% at Dwarikesh Nagar & 10.20% at Dwarikesh Puram in sugar season 2005-06.

Expansion Plans:

The company has undertaken expansion of additional 24MW cogeneration at Dwarikesh Puram unit & setting up of a new Sugar unit of 7500 TCD(expandable to 10000 TCD) with 36 MW cogeneration at Dwarikesh Dham near Barielly. The implementation of the expansion program is going as per schedule & is likely to be completed by November 2007 before the commencement of Sugar season 2007-08. The said expansion would cost around Rs 350 crores & is being funded through loans from Bank/Financial institutions/Sugar Development Fund to the extent of Rs.300 crores & balance from internal accruals, GDR issue proceeds.

The Company has entered into Power purchase agreements, 24MW's each for Dwarikesh Puram & Dwarikesh Dham units with the Paschimanchal Vidyut Vitran Nigam Limited & Madhyanchal Vidyut Vitran Nigam Limited respectively for supply of power to state grid for period of 20 years from date of commissioning of plant with escalation clause.

Post expansion, the Company's capacities in three units would be as follows:

Units Sugar Distillery Cogeneration Supply to capacity (KLPD) capacity state Grid (TCD) (MW) (MW)

Dwarkesh Nagar (DN) 6500 30 17 8 Dwarikesh Puram (DP) 7500 - 33 24 Dwarikesh Dham (DP) 7500 - 36 24 Total 21500 30 86 56

Incentive Scheme:

The company is pleased to inform you that expansion carried out/being carried out by the company in distillery, co-generation, sugar units may exceed Rs 500 crores & would be completed before 31st March 2008. In view of the latest extension of date up to 31st March, 2008 for eligibility of the Sugar Industries Promotion Policy (2004) of Uttar Pradesh Government, your company would be eligible for all the benefits such as capital subsidy, waiver/reimbursement of entry tax, Purchase tax, society commission, trade tax, Transport subsidy, administration charges on Molasses, exemption of stamp duty & registration on purchase of land etc.

GLOBAL DEPOSITORY RECEIPTS (GDR) ISSUE:

The company brought out a issue of Global Depository Receipts of 30,00,000 Equity Shares at US$ 4 (Rs.182/-) per Equity share including a premium of Rs. 172/- per Equity Share in the month of December, 2005, aggregating to Rs. 54,05,49,427/-.

The Directors are pleased to inform you that the issue received a good response and was fully subscribed. The proceeds of the issue are being utilised for meeting the capital expenditure for putting up additional 24 MW Co-generation at Dwarikesh Puram and new green field project of 7500 TCD expandable to 10000 TCD with 36 MW Co-generation at Dwarikesh Dharm at Bareilly District.

FINANCIAL PERFORMANCE:

The year under review was satisfactory considering the various odds and adverse situations faced by it such as increase in Raw Materials Costs, Staff Costs, Depreciation and interest cost.

Sales registered a growth of 52% to Rs. 234.66 crores for the year under review as against Rs. 154.88 crores in the previous year. Profit after tax was Rs. 20.84 crores for the year as against Rs. 26.60 crores during the previous year. Cash Profit (including deferred tax) was Rs.36.46 crores as compared to Rs. 347.64 crores for the previous year.

CANE & SUGAR POLICY:

The main policies of the government in relation to the sugar industry during the year were:

1. The ratio of levy and free sale sugar was 10:90.

2. The price of levy sugar for Central U.R for the year 2005-06 continued to be Rs. 1330.77 per quintal.

3. The statutory minimum price of sugar cane was fixed at Rs.80.25 per qtl. linked to the sugar recovery of 9% with a premium for higher recovery.

4. The Government reduced the rate of interest on SDF Loans to 4% w.e.f. 21st October, 2004.

5. The statutory minimum price announced by the Central Government on the basis of recovery are given below:

Season SMP Rs./ Qtl. Recovery Link

2000-01 59.50 8.5% 2001-02 62.05 8.5% 2002-03 64.50 8.5% 2002-03 (Revised) 69.50 8.5% 2003-2004 73.00 8.5% 2004-2005 74.50 8.5% 2005-06 79.50 9.0% 2006-07 80.25 9.0%

PERFORMANCE OF POWER UNIT

During the year 51,027,636 KWH units of Electricity were generated through steam, registering a growth of 25.85% as against 40,547,716 KWH generated in the previous year. The external gross revenue from power registered a growth of 1.38% to Rs.534.38 Lakhs as against Rs.527.12 Lakhs due to downward revision of power purchase price by UPPCL.

DIRECTORS

Pursuant to Article 146 of the Articles of Association of the company, Mr. S.K. Neotia, Mr. M.G. Diwan and Mr. K.P. Medhekar, retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

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

(i) in the preparation of the annual accounts, applicable Accounting Standards have been followed with proper explanations relating to material departures, if any;

(ii) 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) Taken proper & sufficient care for the maintenance of 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) Prepared the Annual accounts on a going concern basis.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

EMPLOYEES

As required by the provisions of sub-section (2A) of Section 217 of the Companies Act, 1956 as amended, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of the employees are set out in Annexure - I to the Director's Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 217(1)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure - II and forms a part of this report.

AUDITORS & AUDITOR'S REPORT:

There are no qualifications in the Auditors report.

The Auditors, M/s S.S.Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2006-07 and fix their remuneration. M/s S.S.Kothari Mehta & Co., Chartered Accountants, being eligible, have offered themselves for reappointment.

PUBLIC DEPOSITS

The Company does not have any fixed deposits at the beginning of the year in terms of Section 58A of the Companies Act as on balance the date neither any deposits were accepted during the year.

ACKNOWLEDGEMENT

The directors wish to place on record their sincere gratitude and appreciation to the members, sugar cane growers, employees, bankers, financial institutions, Central & State Government for their valuable contribution in the growth of the organisation.

By Order of the Board For DWARIKESH SUGAR INDUSTRIES LIMITED

G R MORARKA CHAIRMAN & MANAGING DIRECTOR

Place : New Delhi K. P. MEDHEKAR Dated : 27th November, 2006 DIRECTOR

TECHNOLOGY ABSORPTION

FORM-B

FORM FOR DISCLOSURE OF PARTICULARS IN RESPECT OF ABSORPTION.

A. RESEARCH AND DEVELOPMENT:

Specific Area

1. Proper interaction with sugar cane scientists/Research stations to educate our staff regarding new Technology of sugar cane cultivation, control of insects, pests and diseases.

2. Distribution of nuclear cane seed of varieties like Cos 88230, 8436, 96268, 8432 and Cop 84212 for raising the foundation seed nurseries and onward multiplication of these in primary and secondary nurseries and finally distribution of cane seed for commercial cultivation of these varieties.

3. Cane seed treatment of improved varieties through M.H.A.T. units for renovation of various seed born disease in Cos 767 and of other varieties being done free of cost, by raising these treated varieties in nurseries for maintaining disease free seed.

4. Biological Control of Early shoot borer, Top borer, Gurdaspur borer Pyrilla insect pest etc being done through Trichogramma Chilonis and Tricho Japonicum Eipipyrix rearing in Bio control laboratory, Eipipyrix rearing and shifting/tagging at sugar cane from field to fields.

5. To educate the farmers and our field staff regarding intercultural practices in sugar cane crop to achieve higher yield and quality of cane conducted village meetings, arranging staff and farmers training programme, staff training and farmers tour is being arranged to visit various sugar cane Research station and progressive farmers field of U.P. state.

6. Developing of the area link roads with a view to increase new cane area in interior zone and to provide easy transportation facility to our cane suppliers.

7. Investigation of the Agronomic problems on sugar cane crop at our Reserved area through establish the Demonstration plots like water lodged and Rain fed farming because we have about 20% of area under Water logged and about 15% of area under Rain fed condition.

B. BENEFITS DERIVED:

1. Area under new & improved varieties increased from 15% to 20% which has replaced the area of undesirable and rejected varieties.

2. Distribution of cane seed of improved varieties. Adoption of Agrochemicals, plant protection measures & other developmental activities has improved production, productivity and sugar recovery.

3. Use of improved agricultural implements has helped in mechanized cane cultivation, use of sprayers in protection of cane crops from pests & diseases.

4. Demonstration plots, farmers meeting, training and tour programmes are very helpful in imparting the improved technical know-how of sugar cane cultivation to staff members as well as cane growers.

5. Awareness about packages and practices of sugar cane crop to obtain the better yield as well as quality of cane.

C. ACTION PLAN:

1. Fixing the targets staff wise to replace rejected and unsuitable varieties and increase the area under new improved varieties at least by 25%.

2. New improved seed nurseries which are maintained under the supervision of our trained and senior staff shall be continued to achieve the results in obtaining low fibre, high sugar as well as high yielding cane varieties.

3. Farmers meeting/Seminars shall be conducted to educate the farmers regarding new Technology, package of practices in fields nurseries/seed plots, ratoon management is being given equal importance.

4. New link roads shall be developed for easy transportation of sugar cane at gate and out centres.

5. Providing the best quality of insecticides/pesticides on subsidised rate or free of cost to control attack of major insects and pests on sugar cane crop in our reserve zone.

6. Proper physical measurement of sugar cane area in our reserve zone to estimate the actual cane availability from our area.

7. Providing Hume pipes to farmers for proper water drainage system to avoid water logging problem.

II. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

EFFORTS MADE:

i. Results of Bio-pesticides lab, soil testing lab maintenance of nurseries in cane development and facilities/subsidies provided under cane development scheme have been immensely helpful in boosting up cane quality, cane production as well as cane productivity.

ii. The company is making efforts for introduction of more & more labour efficient process.

iii. The company is considering setting up»f own research farms, conducting demonstration and trial in continuation for finding the better varieties, innovation and results in favour of quality cane production.

IMPORTED TECHNOLOGY : Not applicable

III. FOREIGN EXCHANGE EARNING AND OUTGO

Activities relating to exports

The company has not made any exports during the year.

The Company made a GDR issue & collected Gross receipts of Rs.54,05,49,427 & incurred GDR issue expenditure of Rs.1,50,55,609, which were netted off from GDR issue proceeds.

Expenditure in Foreign Currency:

Interest on FCNR (B): Nil (4,032,088) GDR expenses (net amortisation) 3,011,121 (Nil) Director's Business Expenses 10,304 (Nil) Membership & Subscription 988,373 (Nil) Earnings in Foreign Currency NIL (NIL)

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Sep 30, 2005

The Directors take pleasure in presenting their Twelfth Annual Report together with the audited accounts for the year ended 30th September 2005.

FINANCIAL RESULTS

Rs. in Lacs Rs. in Lacs Year ended Year ended 30.09.2005 30.09.2004

Gross profit before depreciation, interest & tax 4687.86 2886.33 Less: Depreciation 550.16 460.64 Interest 593.58 703.83 Profit before tax and exceptional items 3544.12 1721.86 Less: Exceptional Item 20.92 627.73 Profit before tax and after exceptional item 3523.20 1094.13 Less: Provision for taxes (including previous year) 303.57 87.36 Fringe Benefit Tax 5.45 - Deferred tax liability 554.20 30.71 Profit after tax 2659.98 976.06 Add: Balance brought forward from previous year 680.43 434.29 Amount available for appropriation 3340.41 1410.35 Appropriations: Interim Dividend on Equity Shares 753.88 - Proposed Dividend - On equity Shares - 151.21 - On preference Share's 13.20 52.23 Additional tax on dividend 107.58 26.48 Transfer to general reserves 1500.00 500.00 Balance carried forward to next year 965.75 680.43 3340.41 1410.35 DIVIDEND

The directors declared a payment of the Interim Dividend @ 60% (Rs. 6/- per equity share of Rs. 10/- each) on Equity shares of the Company including pari passu full dividend on the shares allotted in recent Initial Public Offer [IPO] notwithstanding the fact that these shares were allotted on 24th December, 2004.

The directors are pleased to recommend payment of dividend @ 12% on 12%-Cumulative redeemable preference shares (Rs. 12/- per share of Rs. 100/- each).

In view of commendable interim dividend declared, the same is considered to be full and final and no final dividend on Equity Shares is recommended.

The total amount on account of dividend outgo (including additional tax on dividend) will be Rs. 874.66 lacs.

YEAR IN RETROSPECT

OPERATIONS:

During the year, your company expanded the co-generation capacity from 9 MW to 17 MW at its Dwarikesh Nagar Unit. Your Company also commissioned a 30 Kilo Litres per day distillery plant capable of manufacturing Industrial Alcohol including rectified spirit, Ethanol with the state of art technology.

During the year, your company crushed 80.15 lac quintals of sugar cane and produced 8.40 lac quintals of sugar as against 75.19 lac quintals of sugar cane crushed and 7.81 lac quintals of sugar produced in the previous year.

The Company achieved a recovery of 10.48% in 2004-05 against 10.39% achieved in the previous year. This year's recovery has been the highest achieved by the Company so far. The Company achieved crop day crushing average of 53430 qtls per day.

INITIAL PUBLIC OFFER [IPO]

The company brought out an Initial Public Offer [IPO] of 50,04,285 Equity Shares at Rs. 65/- per Equity share including a premium of Rs. 55/- per Equity Share in the month of November, 2004 aggregating to Rs. 32.53 Crores.

The Directors are pleased to inform you that the issue received an overwhelming response and was oversubscribed 23 times. Out of the said issue proceeds, your company has spent a sum of Rs. 30.62 Crores towards the funding of distillery plant, balancing of equipment in existing unit at Dwarikesh Nagar, meeting public issue expenditure and for setting up of new green field sugar project of 5500 TCD expandable to 7500 TCD with 9 MW co-generation at Dwarikesh Puram Unit. The balance unspent amount of Rs. 1.91 crores will be incurred in the next accounting year.

FINANCIAL PERFORMANCE:

The Year under review was one of the best years in the history of the company. The year under review witnessed a sharp jump in the profits of the Company. This was attributable to higher realisation in finished goods, higher revenue from cogeneration & by-products and better efficiency in working of the plant.

Gross Sales registered a growth of 7.26% to Rs. 16424.88 Lacs for the year under the review as against Rs. 15313.25 Lacs in the previous year. Profit after tax registered a growth of 172.52% to Rs. 2659.98 Lacs for the year as against Rs. 976.06 Lacs during the previous year. Cash Profit registered a growth of 123.44% to Rs. 3210.14 Lacs as compared to Rs. 1436.70 Lacs for the previous year.

CANE & SUGAR POLICY:

The salient features of the Sugar Policy for 2004-2005 are given below:

1. The ratio of levy and free sale sugar was 10:90.

2. The price of levy sugar for Central U.P. for the year 2004-05 was Rs. 1330.77 per quintal.

3. The statutory minimum price of sugar cane was fixed at Rs. 74.50 per qtl. linked to the sugar recovery of 8.5% with a premium for higher recovery.

4. The Indian Government allowed futures trading in Sugar. The National Commodity and Derivative Exchange (NCDEX) became operational in July, 2004.

5. The Government reduced the rate of interest on O/s SDF Loans to 2% below the bank rate w.e.f. 21st October, 2004.

6. The statutory minimum price along with the price applicable to the company on the basis of recovery are given below:

Season SMP Company's SMP Rs./Qtl. SAP Rs./Qtl. (General variety at the gate) Rs./Qtl.

2000-01 59.50 70.00 90.00 2001-02 62.05 75.92 95.00 2002-03 64.50 78.18 95.00 2002-03 (Revised) 69.50 84.26 - 2003-2004 73.00 89.40 95.00 2004-2005 74.50 91.22 107.00

As per the decision of Allahabad High Court, which was confirmed by the Supreme Court, State Advised price (SAP) is payable by the companies engaged in sugar manufacturing.

PERFORMANCE OF POWER UNIT

During the year 18,633,648 KWH units of Electiricity were genereated registering a growth of 176.33% as against 6,743,286 KWH generated in the previous year. The revenue from power registered a growth of 188.37% to Rs. 527.12 Lacs as against Rs. 182.79 Lacs. This increase is mainly on account of expansion of co-generation capacity from 9 MW to 17 MW & higher realisation.

DIRECTORS

Shri B. K. Agarwal, Director was appointed as an Additional Director in the Board Meeting during the year, whose term expires with this Annual General Meeting and in respect of whom notice u/s 257 has been received from a Shareholder to appoint him as a Director in the ensuing Annual General Meeting.

Pursuant to Article 146 of the Articles of Association of the company, Mr. G. R. Morarka, Mr. L. N. Heda and Mr. S. S. Vaidya, retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

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

(i) in the preparation of the annual accounts, applicable Accounting Standards have been followed with proper explanation relating to material departures, if any;

(ii) 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) Taken proper & sufficient care for the maintenance of 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) Prepared the Annual accounts on a going concern basis.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance, Management Discussion and Analysis statement forms part of the Annual report.

EMPLOYEES

As required by the provisions of sub-section (2A) of Section 217 of the Companies Act, 1956 as amended, read with the Companies (Particulars of Employees) Rules, 1975 the names and other particulars of the employees are set out in Annexure-1 to the Director's Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to section 217(1)(e) of the Companies Act, 1956, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure-II and form a part of this report.

AUDITORS & AUDITOR'S REPORT:

The observations and qualification in the Auditors Report relates to non provision of estimated excise duty of Rs 262.57 lacs on finished goods lying in bonded warehouse & distillery for captive consumption at the year end & not included in the valuation of the inventories. It has been explained in note 5 to schedule B to Notes to accounts that there is no effect on the profit for the year on account of the above said non-provisioning.

The Auditors, M/s S. S. Kothari Mehta & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company. You are requested to re-appoint the Auditors for the accounting year 2005-06 and fix their remuneration. M/s S. S. Kothari Mehta & Co., Chartered Accountants, being eligible, has offered themselves for reappointment.

LISTING OF SHARES

The Company is listed on the Bombay stock Exchange Ltd. and National Stock Exchange of India Ltd. The listing fee for the financial year 2005-06 has been paid to the stock exchange with in the prescribed time limits.

PUBLIC DEPOSITS

Requirements of Section 58A of the Companies Act, 1956 and directions of Reserve Bank of India were duly complied with for the deposits which were available with the company. All the deposits as per section 58A have been repaid during the year and as on the balance sheet date, the company does not have any outstanding deposits.

ACKNOWLEDGEMENT

The directors wish to place on record their sincere gratitude and appreciation to the members, sugar cane growers, employees, bankers, financial institutions, Local Authorities, Central & State Government for their valuable contribution in the growth of the organisation.

By Order of the Board For DWARIKESH SUGAR INDUSTRIES LIMITED

G. R. MORARKA CHAIRMAN & MANAGING DIRECTOR

PLACE : Mumbai K. P. MEDHEKAR DATED : 17th October, 2005 DIRECTOR

ANNEXURE - II

PARTICULARS AS REQUIRED UNDER THE COMPANIES [DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS] RULES, 1988.

TECHNOLOGY ABSORPTION

FORM-B

FORM FOR DISCLOSURE OF PARTICULARS IN RESPECT OF ABSORPTION.

A. RESEARCH AND DEVELOPMENT :

Specific Area

1. Proper interaction with sugar cane scientists/Research stations to educate our staff regarding new Technology of sugar cane cultivation, control of insect, pest and disease.

2. Distribution of nuclear cane seed of varieties like Cos 88230, 98231, 8436, 96268, 8432 and Cop 84212 for raising the foundation seed nurseries and onward multiplication of these in primary and secondary nurseries and finally distribution of cane seed for commercial cultivation of these varieties.

3. Cane seed treatment of improved varieties through M.H.A.T. units for renovation of various seed born disease in Cos 767 and of other varieties being done free of cost, by raising these treated varieties in nurseries for maintaining disease free seed.

4. Biological Control of Early shoot borer, Top borer, Gurdaspur borer Pyrilla insect pest etc being done through Trichogramma Chilonis and Tricho Japonicum Eipipyrix rearing in Bio control laboratory. Eipipyrix rearing and shifting/tagging at sugar cane field to fields.

5. Seed for new improved varieties multiplication programme done at Factory farm as well as progressive growers fields for distribution among the growers.

6. To educate the farmers and our field staff regarding intercultural practices in sugar cane crop to achieve higher yield and quality of cane Conducted village meetings, arranging staff and farmers training programme, staff training and farmers tour is being arranged to visit various sugar cane Research station and progressive farmers field of U.P. state.

7. Developing of the area link roads with a view to increase new cane area in interior zone and to provide easy transportation facility to our cane suppliers.

8. Rearing of vermiculture to produce vermicompost to provide to the sugar cane growers for the improvement of soil texture and also to increase the water holding capacity of the soil. The vermiculture as such are being sold to the cane growers on subsidies rates.

9. Investigation of the Agronomic problems on sugar cane crop at our Reserved area through established Demonstration plots like water lodged and Rain fed farming because we have about 20% of area under Water logged and about 15% of area under Rain fed condition.

B. BENEFITS DERIVED:

1. Area under new & improved varieties increased from 15% to 20% which has replaced the area of undesirable and rejected varieties.

2. Distribution of cane seed of improved varieties. Adoption of Agrochemicals, plant protection measures & other developmental activities has improved production, productivity and sugar recovery.

3. Use of improved agricultural implements has helped in mechanized cane cultivation, use of sprayers in protection of cane crops from pests & diseases.

4. Demonstration plots, farmers meeting, training and tour programmes are very helpful in imparting the improved technical know-how of sugar cane cultivation to staff members as well as cane growers.

5. Awareness about packages and practices of sugar cane crop to obtain better yield as well as quality of cane.

C. ACTION PLAN:

1. Fixing the targets staff wise to replace rejected and unsuitable varieties and increase the area under new improved varieties at least up to 25%.

2. New improved seed nurseries are maintained under the supervision of our trained and senior staff and shall be continued to achieve the results in obtaining low fiber, high sugar as well as high yielding cane varieties.

3. Farmers meeting/Seminars shall be conducted to educate the farmers regarding new Technology, package of practices in fields nurseries/seed plots. Ratoon management is being given equal importance.

4. New link road shall be developed for easy transportation of sugar cane at gate and outside centres.

Expenditure on research and development:

(Rupees in Lacs)

2004-2005 2003-2004

Capital NIL NIL Recurring NIL NIL Total NIL NIL Total R & D expenditure as a percentage of total turnover NIL NIL

5. Provides the true type of insecticides/pesticides on subsidised rate or free of cost to control major insect and pests of sugar cane crop at our reserve zone.

6. Proper physical measurement of sugar cane area at our reserve zone to estimate the actual cane availability from our area.

7. Provides Hume pipes to farmers for proper water drainage system to avoid water logging problem.

II. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

EFFORTS MADE:

i. Results of Bio-pesticides lab, soil testing lab maintenance of nurseries, application of Remote sensing in cane development and facilities/subsidies provided under cane development scheme have been immensely helpful in boosting up cane quality, cane production as well as cane productivity.

ii. The company is making efforts for introduction of more & more labour efficient process.

iii. The company is considering setting up of own research farms, conducting demonstration and trial in continuation for finding the better varieties, innovation and results in favour of quality cane production.

IMPORTED TECHNOLOGY : Not applicable

III. FOREIGN EXCHANGE EARNING AND OUTGO

Activities relating to exports.

The company has not made any exports during the year,

2004-2005 2003-2004 Total foreign exchange

Used Nil Nil Earned Nil Nil

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Sep 30, 2004

N

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Sep 30, 2000

The Directors take pleasure in presenting their 7th Annual Report together with the audited accounts for the year ended 30th September 2000.

FINANCIAL RESULTS

Rs. In lacs Rs. In lacs Year ended Year ended 30.09.2000 30.09.1999

Gross profit before depreciation, interest & tax 2,264.83 2,034.62

Less : Depreciation 401.99 257.49

Interest 920.36 913.87

Profit before tax 942.48 763.26

Less : Provision for taxes (14.25) 42.62

Profit after tax 956.74 720.64

Add : Balance brought forward from previous year 288.59 231.13

Amount available for appropriation 1,245.33 951.77

Appropriations :

Proposed Dividend 133.81 133.81

- On equity shares 13.20 13.20

- On preference shares 32.64 16.17

Additional tax on dividend 700.00 500.00

Transfer to general reserve 365.68 288.59

Balance carried forward to next year 1,245.33 951.77

DIVIDEND

The directors are pleased to recommend payment of dividend @ 12% on 12%-Cumulative redeemable preference shares (Rs 12/- per share of Rs 100/- each) and @ 15% on equity shares (Rs 1.5 per equity share of Rs 10/- each).

The total amount on account of dividend outgo (including additional tax on dividend) will be Rs 179.65 lacs.

YEAR IN RETROSPECT

OPERATIONS :

Dining the year, the company crushed 66.35 lac quintals of sugar cane and produced 6.56 lac quintals of sugar as against 64.75 lac quintals of sugar cane crushed and 6.22 lac quintals of sugar produced in the previous year

The recovery recorded in the year 1999-2000 improved to 9.90% as against 9.61 % during the last year. The recovery could have been better had the company been able to regulate the supply of 91269 variety of sugarcane, which has infiltrated into company's command area. The dreaded sugarcane variety 91269, which has devastated the recovery of many a sugar mills in the neighbouring area is high in fibre content and low in sucrose content. It matures very late and can yield good recovery, only if crushed during the later part of the crushing season. Efforts on war footing have been initiated to totally eradicate the variety from the command area of company's factory.

The process losses of 1.808% recorded during the year is the lowest in the history of the company and is one of the lowest in the sugar industry.

FINANCIAL PERFORMANCE :

With the advent of the year 1999-2000, some of the hackneyed policies hitherto followed by the Government in respect of sugar industry in the country were consigned to the Sacrificial altar thus paving way for the strengthening of sugar industry in the country. An array of measures initiated including raising of import duties rendered the entire economics of import of sugar topsy-turvy. The sugar prices in the free sale market headed northwards albeit not in the same proportion as the cost of sugar cane and other inputs. Higher selling price of sugar coupled with measures aimed at rationalization of cost improvement in efficiencies and better capacity utilisation ensured a vastly improved performance of the company.

While sales increased from Rs 8,987.41 lacs in 1998-1999 to Rs 10,060.44 lacs in the year under review registering a growth of 11.94%, Profit alter tax was Rs 956.74 lacs, as against Rs 720.64 lacs during the previous year recording a growth of 32.76% Cash Profit at Rs 1,358.73 was 26.03% higher when compared to the cash profit of Rs 1,078.13 lacs in 1998-1999.

PERFORMANCE OF POWER UNIT

During the year the company installed an additional turbine of 3 Mega watt capacity 16,879,900 kWh of power was generated during the year as compared to 17,198,133 kWh of power generated in the previous year. The performance of the power unit can be considered satisfactory in terms of established technical benchmarks in respect of power units in sugar industry.

DIRECTORS

Mr. B Rajagopal nominee of Industrial Development Bank of India has resigned from the directorship of the company with effect from 30th November, 2000. The Directors would like to place on record their appreciation for the valuable services rendered by Mr. B Rajagopal during his tenure as Director of the Company the Directors would also like to welcome on board Mr. Yashpal Gupta who has replaced Mr. B Rajagopal as the nominee of Industrial Development Bank of India.

Pursuant to Article 146 of the Articles of Association of the company, Mr. S K Neotia, Mr. S S Vaidya and Mr. A K Modi retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

EMPLOYEES

As required by the provisions of Sub-section (2A) of Section 217 of the Companies Act, 1956 as amended, lead with the Companies (Particulars of Employees) Rules 1975 the names and other particulars of the employees are set out in the Annexure - I to the Director's Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to section 217 (1)(e) of the Companies Act, 1956, the particulars in respect of Conservation of Energy, Technology, Absorption and Foreign Exchange Earnings and Outgo are furnished in Annexure - II.

AUDITORS & AUDITOR'S REPORT :

You are requested to appoint the Auditors and fix their remuneration.

Note no. 4 and note no 12 referred to in the auditors report are self explanatory in nature and do not call for any further explanation.

PUBLIC DEPOSITS

Requirements of Section 58A of the Companies Act, 1956 and directions of Reserve Bank of India were duly complied with while accepting deposits from public during the year. As on the balance sheet date, the company does not have any unclaimed or overdue deposits.

PARTICULARS AS REQUIRED UNDER THE COMPANIES [DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS] RULES, 1988.

1. CONSERVATION OF ENERGY

Energy conservation is an on-going activity in the Company and the efforts to conserve energy through improved operational methods and other means are continuing Details of total energy consumption and energy consumption per unit of production are furnished in the prescribed Form `A' below.

FORM FOR DISCLOSURE OF PARTICULARS IN RESPECT OF ABSORPTION

1. RESEARCH AND DEVELOPMENT :

Specific Area :

i. Procurement of nuclear cane seeds horn Sugar Research Farms of improved early and general varieties suitable for our area such as Cos 88230, 8436, 8432, Cop 84212, Cos 90223, 96268 etc.

ii. Distribution of seeds in poly bags for further multiplication in foundation seed nurseries at the growers field. 5.79 Lacs policy bags prepared at our mills and 449.82 quintals cane seeds distributed during the year.

iii. Distribution of Chemical fertilizers and Agrochemicals and agricultural implements through Kisan Sewa Kendras at subsidised rate or free of cost.

iv. Distribution of foundation & primary cane seed treated by Moist Hot Air Treatment Units installed at factory gate and centres.

v. Analysis of soil samples and enlightening the results to the farmers and recommending them about use of proper fertilizers for improving the soil fertility.

vi. Control of various pests such as early shoot borer, Stalk borer, Top borer etc. through rearing and release horn our Bio-pesticide Laboratory and advising remedial / preventive measures.

2. BENEFITS DERIVED :

i. Area under sugarcane of improved early varieties has gone up from 6.49% to 10% and improved general varieties has also gone up from 4.50% to 10%.

ii. Control on fast multiplication of some of inferior sugar cane varieties Area under cultivation restricted to 12%

iii. Moist Hot Air treated seed in elimination of some Internal bone diseases like wilt, smut, Ratoon Stunting Disease, Grassy Shoot Disease and partial control of Red rot.

iv. Cane development measures to result in increase in per unit of yield and supply of cane to the mills.

3. ACTION PLAN :

i. Setting up of target to bring at least 30% area under improved early varieties by the year 2002-2003.

ii. To procure nuclear seeds from cane research station maintaining nurseries of improved early varieties & last multiplication of seeds through poly bag method of improved & rare varieties.

iii. To reduce area under cultivation of unsuitable varieties like Cos 91269, Cos 7918, Bo 91 and concentrate on in area under Cos 88230, 8436, 8432, Cop 84212, Cos 96268 etc.

iv. To try & adopt new technology, ratoon management, expensive techniques in improvement of production Expenditure on research and development :

(Rupees in lacs)

1999-2000 1998-1999

Capital -- --

Recurring 10.16 8.95

Total 10.16 8.95

Total R&D expenditure as a Percentage of total turnover 0.10 0.10

II. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

EFFORTS MADE :

i. Result of Research & Development carried out in other factories and Research Station are applied at company's farm and cane cultivators fields. The improved early and general varieties are introduced and multiplied in the reserved area. The multiplication of improved varieties like Cos 88230, 8436, 8432, Cop 84212 arc very fast and adopted by the glowers.

ii. The company is making efforts for introduction of labour efficient process.

iii. The company is considering purchases of land for Research & Development purposes and for raising cane seed through different nurseries trials, demonstration etc 5 Nos Moist Hot Air Treatment units are in use, efforts in the right earnest have been made and two laboratories-(a) Soil testing (b) Bio-pesticide laboratory have been set up and are in operation. In addition / research project on Bio- Fertiliser production & utility on sugar cane crop is on anvil Soil testing and Bio-pesticide laboratory are running successfully and results are being achieved from these laboratories. Size and capacity of Bio-pesticide laboratory this year, has been increased to more than double.

IMPORTED TECHNOLOGY Not applicable

III. FOREIGN EXCHANGE EARNINGS AND OUTGO

Activities relating to exports

The Company has not made any exports during this year

1999- 2000 1998 - 1999

Total Foreign Exchange Used Rs. 19,579/- Rs. 17,249/-

Earned Nil Nil

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Sep 30, 1999

The Directors take pleasure in presenting their 6th Annual Report together with the audited accounts for the year ended 30th September 1999.

FINANCIAL RESULTS

Rs. In lacs Rs. In lacs Year ended Year ended 30.09.1999 30.09.1998

Gross profit before depreciation, interest & tax 2,034.62 2,129.12

Less : Depreciation 357.49 271.85

Interest 913.87 973.07

Profit before tax 763.26 884.20

Less : Provision for taxes 42.62 63.59

Profit after tax 720.64 820.61

Add : Balance brought forward from previous year 231.13 172.23

Amount available for appropriation 951.77 992.84

Appropriations :

Proposed Dividend

- On equity Shares 133.81 133.81

- On preference Shares 13.20 13.20

Additional tax on dividend 16.17 14.70

Transfer to general reserve 500.00 600.00

Balance carried forward to next year 288.59 231.13

951.77 992.84

DIVIDEND

The directors are pleased to recommend payment of dividend @ 12% on 12% - Cumulative redeemable preference shares (Rs.12/- per share of Rs.100/- each) and @15% on equity shares (Rs.1.50 per equity share of Rs.10/- each). The total amount on account of dividend outgo (including additional tax on dividend) will be Rs. 163.18 lacs.

OPERATIONS REVIEW

During the crushing season 1998-99 your company crushed 64.75 lac quintals of sugar cane and produced 6.22 lac quintals of sugar as against 57.44 lac quintals of sugar cane crushed and 5.89 lac quintals of sugar produced in the previous season.

Erratic and unprecedented rainfall before the commencement of the season dealt an excruciating blow to the fortunes of the sugar industry in the state of Uttar Pradesh. Recovery recorded by most of the sugar mills in Uttar Pradesh plummeted by at least .50 to .80 percentage point. Although excellence achieved in technical parameters to a certain extent mitigated the negative impact of the unseasonal rainfall, the recovery recorded in your Company declined from a high of 10.28% in 1997-98 to a low of 9.61% during the year.

FINANCIAL PERFORMANCE

Profit after tax was Rs.720.64 lacs, as against Rs.820.61 lacs during the previous year indicating a decline of 12.18%.

Cash profit also declined marginally from Rs. 1,092.46 lacs in 1 997-98 to Rs. 1,078.13 lacs.

The fall in profit is attributable to a medley of factors viz.

1. Lower recovery - From a high of 10.28% in 1997-98 to a low of 9.61% during the year under review.

2. Lower sales - Lesser release of free-sale sugar resulted in sales dropping by 4.16% as compared to the previous year.

3. Cost inflation and increase in sugar cane price without commensurate increase in the selling price of sugar and other by-products.

YEAR 2000 (Y2K)

The Company had taken adequate steps to deal with the risks associated with the year 2000 problem. The transition was smooth and no disruptions were reported when the year changed. All the hardware, operating systems, network devises, application software and process control equipment were found to be Y2K compliant and continue to perform satisfactorily.

DEPOSITORY SYSTEM

In order to provide efficient services & better facilities to the shareholders of the Company such as protection from fraud or loss in transit, to avoid delay in transit, to provide instant transfer & saving in stamp duty on transfer etc., your company signed an agreement with National Securities Depository Ltd., (NSDL) for converting it's equity shares from holding in physical form to electronic form. Consequently as at year-end, 74.98% of equity shares of the company have been dematerialised. The Company has also signed an agreement with Central Depository Securities Ltd. (CDSL) to provide an inter se connectivity with NSDL.

SUGAR - NATIONAL & INTERNATIONAL PERSPECTIVE

During the crushing season the sugar output in the country increased to 15.4 million tons. Although sugar production and sugar consumption were balanced, the policy of the Government to allow unabated import of sugar has dealt coup-de-grace to the aspirations of the sugar industry as the stock level at the end of the year reached diabolic proportion. The carrying of huge inventory has resulted in mammoth interest burden to the industry and mounting cane arrears to the farmers. The industry had to function in an environment of intense frustration, utmost dejection and extreme disappointment.

During the year there were two half-hearted measures by the Government to increase the import duty with a view to create level playing field for the local industry. However the modicum increase in import duty could not bridge the gap between the cost of imported sugar and the reasonable price which the indigenous sugar manufactures ought to have realised for their produce. The increase in duty therefore did not in any way block the steady stream of imports.

Recently announced measures such as increase in duty to 40% and subjecting the imported sugar to regulatory monthly release mechanism will provide some succour to the ailing domestic sugar industry although the measures have come a bit late in the day.

The existing rate of duty levied on import of sugar (40%) should be viewed against the backdrop of 60% import duty levied by the Government of Pakistan & Sri lanka, 65% levied by the Government of Brazil, 200% levied by the Government of Bangla Desh and 300% levied by the Governments in the European Union. Besides levying higher rate of import duty the Governments of these countries also substantially subsidise sugar exports thus protecting their domestic industry from predators of other countries.

Sugar production world-wide, during the year 1999-00 is estimated at 135 million tonnes as against a demand of only 130 million tonnes. Unless import duty is raised substantially the imports will continue to flood the Indian markets triggering a further fall in the price of sugar which does not augur well for the hapless domestic sugar industry.

Intriguingly, while the Government does nothing noteworthy to benefit the domestic sugar industry it is unwilling to unentangle labyrinth of controls within which the industry has to function. The presence of Government is ubiquitous except when the beleaguered industry is to be protected from the preying sharks. A comprehensive policy therefore needs to be drawn by virtue of which not only import duty is raised to the maximum of 150% as is permissible under the WTO rules but also export subsidy is granted to enable the domestic industry to compete effectively in the Global market. It is absolutely necessary for the Government to shed its apathy towards the industry by responding to desperate pleas of the Industry and draw a comprehensive policy for the growth and consolidation of sugar industry.

1999-00 OVERALL SCENARIO VIS-A-VIS YOUR COMPANY

The picture ahead is indeed very gloomy, as the gap between supply and demand has assumed yawning proportions. The domestic industry continues to be saddled with the problems of carrying huge inventory, crippling interest burden, mounting cane arrears to the farmers and many more problems generally associated with industrial sickness. Unless the Government formulates industry friendly policies, the year ahead is expected to witness difficult times for the prima donnas of the sugar industry, not to speak of the lesser companies.

The policy of your company to steadfastly pay the dues of farmers in time has resulted in farmers continuing to repose faith in the company and planting more and more sugar cane to be supplied to your company. In the years gone by, phased increase in capacity together with corresponding increase in cane crushed has enabled the company to tide over seemingly insurmountable situation.

The company is committed to continue such time-tested policy and strives to achieve excellence in areas, which are outside the ambit of Government interference.

In the year ahead there should be modest increase in quantity of cane crushed. As per the trends available recovery should be significantly better when compared to the recovery recorded in the year 1998-99. Fortune of your company like the fortune of others within the sugar industry will to a large extent be determined by the policies of the Government. The company, on its part will endeavour to optimize productivity and maximize profitability.

PERFORMANCE OF POWER UNIT

During the year 1998-99, the power unit, with its installed capacity of 6 Mega watt generation, generated 17,198,133 kWh of power as against 17,199,235 kWh of power generated in the previous year, through Steam Turbine. The performance of the power unit is considered to be one of the best in terms of the various accepted parameters, which are applicable to sugar industry.

DIRECTORS

Pursuant to Article 146 of the Articles of Association of the company, Shri G.R. Morarka, Shri L.N. Heda and Shri M.G. Diwan retire in the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

Pursuant to section 217 (1)(e) of the Companies Act, 1956, the particulars in respect of Conservation of Energy, Technology, Absorption and Foreign Exchange Earnings and Outgo are furnished in Annexure - II.

AUDITORS

You are requested to appoint the Auditors and fix their remuneration.

PUBLIC DEPOSITS

The Company accepted deposits during the year after complying with the requirements of Section 58A of the Companies Act, 1956 and of Reserve Bank of India's directions in this matter. As on the balance sheet date, the company does not have any unclaimed or overdue deposits.

PARTICULARS AS REQUIRED UNDER THE COMPANIES [DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS 1 RULES, 1988.

1. CONSERVATION OF ENERGY

Energy conservation is an on-going activity in the Company and the efforts to conserve energy through improved operational methods and other means are continuing.

TECHNOLOGY ABSORPTION

FORM - B

FORM FOR DISCLOSURE OF PARTICULARS IN RESPECT OF ABSORPTION.

1. RESEARCH AND DEVELOPMENT :

Specific Area :

i. Procurement of nuclear seed for improving early & general varieties such as COJ 64, COS 88230, COS 8436, 8432, 95255, 96258, 94223, 88216, 94257, COS 84212 etc. and propagating these varieties through Polly culture.

ii. Setting up of Six Kisan Seva Kendras for providing chemical fertilisers & agrochemicals, agriculture equipments on most reasonable & subsidised rates.

iii. Distribution of foundation & primary seed, treatment of Cane seed through Moist Hot Air Treatment Units installed at factory gate and centres.

iv. Setting up of soil-testing laboratory for soil testing of the area.

v. Setting up of Soil Testing Laboratory to produce Trychogramma, parasite of different borer.

2. BENEFITS DERIVED :

i. Area under sugar cane of improved early varieties has gone up from 4.27% to 6.49% and improved general varieties has also gone up from 3.50% to 10%.

ii. Control on fast multiplication/increasing trend of some of worst sugar cane varieties.

iii. Increase in area under early variety by 15% to 20%.

iv. MHAT treated seeds help to bring about elimination of some internal bone diseases.

v. Cane development measures to result in increase in per unit of yield and supply of cane to the mills.

3. ACTION PLAN :

i. Setting up of Target to bring at least 30% area under improved early varieties by the year 2001-2002.

ii. To procure nuclear seed from cane research station, nurseries, other plots of improved varieties & fast multiplication of seed through polly bag method.

iii. To reduce area under cultivation of unsuitable varieties & replace with improved varieties.

iv. To try & adopt new technology, ratoon management, expensive techniques in improvement of production and productivity of sugar.

Expenditure on research and development :

(Rupees in Lacs)

1998-99 1997-98

Capital -- --

Recurring 8.95 7.51

Total 8.95 7.51

Total R & D expenditure as Percentage of total turnover 0.10 0.09

II. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

EFFORTS MADE :

Result of Research & Development carried out in order factories and Research Stations are applied at company's farm fields & cane cultivation fields. The improved early and general varieties are introduced and multiplied in the reserved area.

ii. The company is making efforts for introduction of energy & labour efficient process.

iii. The company is considering purchases of land for Research & Development purposes and for raising cane seed through different nurseries, trials, demonstration etc. 5 Nos. Moist Hot Air Treatment units are in use, efforts in the right earnest have been made and two laboratories-(a) Soil testing (b) Bio-Pesticide laboratory have been set and are in operation. In addition Research Project on Bio-Fertiliser production & its utility on sugar cane crop is on anvil.

IMPORTED TECHNOLOGY Not applicable.

III. FOREIGN EXCHANGE EARNINGS AND OUTGO

Activities relating to exports

The Company has not made any exports during this year.

Total Foreign Exchange 1998-99 1997-98

Used Rs. 17,249/- Rs. 43,200/-

Earned Nil Nil