JK SUGAR LTD.

A N N U A L R E P O R T 2 0 0 9 - 1 0

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BOARD OF DIRECTORS

Bharat Hari Singhania

Chairman

P. K. Jain

Gautam Khaitan

J. R. C. Bhandari

Vikrampati Singhania

A. K. Kinra

A. K. Jain

Whole-time Director

Auditors Registered Office

S. S. Kothari Mehta & Co. 7, Council House Street,

Chartered Accountants Kolkata - 700 001

Bankers Plant

Bank of India Sindhauli Road,

Axis Bank Meerganj,

IDBI Bank Bareilly (U.P.)

Dena Bank

Company Secretary Administrative Office

Pumit Kumar Chellaramani Link House,

3, Bahadurshah Zafar Marg,

New Delhi-110 002.

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DIRECTORS’ REPORT

TO THE MEMBERS

The Directors have pleasure in presenting the AnnualReport and Audited Accounts for the Financial Yearended 31st March, 2010.

The Company is observing this year as the BirthCentenary Year to pay humble respects to late LalaLakshmipat Singhania (1910-1976), who had been agreat Visionary and a Key Architect of JK Organisation.He believed in the philosophy of inclusive growthencompassing all sections of the Society.

OPERATIONS

During the year under review, your Company recordeda turnover of Rs.103.27 Crores as against Rs.130.08Crores during the previous year. Profit before interest,depreciation & Tax reduced to Rs. 8.05 Crores againstRs.12.46 Crores in the previous year and Profit beforedepreciation stood at Rs.2.30 Crores (previous yearRs. 3.58 Crores). Net Loss during the period was Rs.2.70Crores against a loss of Rs.1.37 Crores last year.

The prices of sugar widely fluctuated between a highof Rs.42,000 per MT to the low of Rs.30,000 per MTduring the year 2009-10 with an average salesrealisation of Rs.27,770 per MT as against Rs.16,115per MT during the previous year. During the year, theState Government of Uttar Pradesh announced a StateAdvised Price (SAP) for cane at Rs.165 per quintal, anincrease of approximately 18% over the last year’sprice of Rs.140 per quintal. The Central Governmentswitched to a mechanism of Fair and RemunerativePrice (FRP) for cane which stood at Rs.129.85 perquintal against the earlier practice of fixing StatutoryMinimum Price (SMP) of Rs.81.18 per quintal,representing an increase of around 60%. However dueto overall shortage of cane, sugar mills were forcedto pay a huge premium over SAP which in turn led tosubstantial increase in the cost of production. Duringthe year, looking at the shortage of production theGovernment also increased the levy quota from 10%to 20%, further weakening the sugar producers.

In spite of these circumstances your companyincreased its crushing to 45.15 lacs quintals this yearas against 35.40 lacs quintals during previous year.

CANE DEVELOPMENT

As mentioned in the past, sugar cane is the primaryraw material for this business and constitutes majorityof the cost. The company continues to emphasiseon the development of this important element ofbusiness by deploying a large number of people who

work in close association with the farming communityaround the sugar mill in helping them develop bettervarieties of sugar cane. The company distributes bettervarieties of seeds, insecticides as well as pesticidesand other agri products to help them improve theyields of cane around the mill.

The company organises visits and seminars to educatethe farmers by demonstrating newer and innovativetechniques of production of sugarcane. The companyalso runs a number of adult literacy programs toeducate the women folk, who in turn contirbute tobetter bonding with the farming community.

CONSERVATION OF ENERGY

The details as required under the Companies (Disclosureof Particulars in the Report of Board of Directors) Rules1988 are annexed.

DIRECTORS

Shri J.R.C. Bhandari and Shri Gautam Khaitan retire byrotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

AUDITORS

M/s S.S. Kothari Mehta & Co., Chartered Accountants,Auditors of the Company retires and are eligible forre-appointment. The observations of the Auditors intheir report on Accounts read with the relevant notesare self-explanatory.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions ofSection 217 (2A) of the Companies Act, 1956 readwith the Companies (Particulars of Employees) Rules1975 as amended regarding employees is annexedto this Report. However, as per the provisions ofSection 219 (1) (b) (IV) of the Companies Act, 1956,the Report and Accounts are being sent to allshareholders of the Company excluding aforesaidinformation. Any shareholder interested in obtainingsuch particulars may write to the Secretary at theCompany’s New Delhi address.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to the goodCorporate Governance practices. Pursuant to Clause49 of the Listing Agreement with the Stock Exchanges,Management Discussion and Analysis, CorporateGovernance Report and Auditors’ Certificate regardingcompliance of conditions of Corporate Governanceare made a part of this Annual Report.

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DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the CompaniesAct, 1956, your Directors state that:

i) in the preparation of Annual Accounts, theapplicable Accounting Standards have beenfollowed along with proper explanation relatingto material departures;

ii) the accounting policies selected and appliedare consistent and judgments and estimatesmade are reasonable and prudent so as togive a true and fair view of the state of affairsof the Company at the end of the financialyear and of the profit or loss of the Companyfor that period;

iii) proper and sufficient care has been taken formaintenance of adequate accounting recordsin accordance with the provisions of the saidAct for safeguarding the assets of the Companyand for preventing and detecting fraud andother irregularities, and

iv) the annual accounts have been prepared ona going concern basis.

ACKNOWLEDGEMENTS

Your Directors wish to acknowledge, the continuedsupport and cooperation received from valuedCustomers, Dealers, Suppliers, Farmers, Shareholders,Banks, Financial Institutions and various Central andState Government Agencies.

Your Directors also acknowledge and appreciate thecommitment and dedication of the employees at alllevels.

On behalf of the Board

New Delhi B. H. SINGHANIADate: 15th May 2010 Chairman

ANNEXURE TO THE DIRECTORS’ REPORT

A. CONSERVATION OF ENERGY

a. Steps taken by the company for conservation ofenergy during the season 2009-10 are as under :

1. Raw water consumption reduced to half byusing excess cold condensate for macerationat mills.

2. Inter-connection of ducting of ID fans of BoilerNo.1 and 2 resulted in power saving.

3. Replacement of dust collector pump by gravityflow operation resulted in power saving.

4. Installation of new capacitor at power houseresulted in improving the power factor.

b. Proposed specific areas of reduction in energy andsteam consumption.

1) Installation of M/s Spray Engineering Devices inboiling house to reduce steam consumption.

2) Installation of variable frequency drives atprimary cane carrier, secondary rack carrier, rawjuice pumps and injection pumps in boilinghouse for energy conservation.

c. The required data with regard to conservation ofenergy is furnished below:

S l .No . Par t icu la r s 2009-10 2008-09

Power and Fuel consumption

1. Electricity

a) Purchased

Unit (Kwh In Lacs) 8.46 9.18

Total Amount (Rs. Lacs) 36.84 31.16

Rate/Unit (Rs.) 4.35 3.39

b) Own Generation

i) Through Diesel Generator

Units (Kwh In Lacs) 0.16 0.66

Unit/Ltr. of Diesel Oil (Kwh) 1.99 2.89

Cost/Unit (Rs.) 16.16 12.26

ii) Through Turbo Generator

Unit (Kwh In Lacs) 173.23 135.28

Unit per MT of Bagasse Steam Steam

Cost/Unit produced produced

by use of by use of

own bagasse own bagasse

2. Consumption per unit of

production Electricity (Kwh/Mt) 346 351

B. RESEARCH AND DEVELOPMENT

In order to increase the area and production ofEarly & Promising variety of cane, following activitieshave been carried out:

1. Seed of five Promising variety of sugarcanenewly released i.e. Co-0238, Co-0239, Co-0118, Co-0242 & CoS-98259 have beendistributed among farmers of our gate areafrom Nucleus seed nursery of our farm.

2. The technique of trench planting have beenwidely propagated. Over 125 demonstrationplots have been laid out with the total canearea of about 300 acres.

3. In order to maximize farmers earning,companion cropping of sugarcane with wheat,urad, potato, garlic etc. have been successfullyimplemented.

4. To control insects and diseases, pesticides,insecticides and other micro nutrient have beendistributed among farmers for obtaining betteryield and quality of sugarcane.

C. TECHNOLOGY ABSORPTION, ADAPTION & INNOVATION

Conservation of Energy by up-gradation of sprayEngineering software for injection water.

D. FOREIGN EXCHANGE EARNINGS AND OUTGO:Nil

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MANAGEMENT DISCUSSION AND ANALYSIS

GLOBAL SUGAR INDUSTRY SCENARIO

As the year 2009-2010 started, demand of Sugarseemed to be higher than production. Globalproduction was estimated to be 160 million tonnesagainst an estimated consumption of 167 milliontonnes. Production in Brazil, India, and European Unionwas estimated to be lower than their potential.However, as the year progressed this trend wasreversed and production in all the above mentionedcountries increased more than anticipated. Brazilreduced production of Ethanol and switched to Sugarwhile India got higher yields which led to a substantialincrease in production compared to earlier estimates.Initially, due to an estimated lower production andexpected large imports by India, global prices soared.As India allowed duty free import of raw and whitesugar, initially large quantities of sugar were contractedby the traders, millers as well as industrial consumers,leading to overall buoyancy. However, as the yearprogressed, production went up and imports into Indiadecreased causing global sugar prices to rapidlycome down.

Due to above factors, global prices of sugar duringthe year saw a wide variation from a low of about 580USD per MT in November 2009 to high of about 750USD per MT in January 2010 which again came downto 470 USD by April 2010.

SUGAR INDUSTRY SCENARIO IN INDIA

The sugar industry witnessed a lot of turbulence in theyear gone by. In India too prices of sugar fluctuatedwidely during the year. The industry, after a long lullperiod, was expecting reasonable profits, but theGovernment played a pivotal role in curbing sugarprices at the expense of the sugar industry. While theIndustry was left in the lurch, the consumers benefittedfrom Government policies and the farmers gainedfrom all time high sugarcane prices.

In the beginning of the year, Sugar production in Indiawas estimated to be 14 million tonnes against theestimated consumption of over 22.5 million tonnes.This sent alarm bells ringing and sugar prices went upsteadily. However, as the year progressed this trendwas reversed due to a number of factors, leading toa sharp decline in sugar prices.

As the sugar crushing season progressed, lowerdiversion of cane to alternate uses as well as better

production yields of sugarcane led to substantiallyhigher production of sugar which is estimated to cross18.5 Million tones, an increase of 32% over the earlierestimates.

With a view to keep sugar prices in check, theGovernment took the following measures :

- Duty free import of raw as well as white sugarwas allowed, leading to import contracts of over5 million tones.

- Increased the levy obligations on sugar mills from10% to 20% making more sugar available in thePDS system at subsidised prices.

- To complicate matters further, the Governmentalso banned forward trading of Sugar on NCDEXand reduced the stock holding limit for bulkconsumers.

- Imposed a weekly release mechanism for freesale of sugar as against the earlier monthlyrelease mechanism. This measure forced the millsto liquidate their stocks in a rapid progressionincreasing overall availability in the markets.

This changing production scenario as well as the abovefactors caused a sea-saw effect on pricing. Prices ofsugar which were hovering around Rs.23,000 per MTduring April 2009 steadily rose to all time high of overRs.42,000 per MT in the month of January 2010.However, industry witnessed a sharp reversal withprices dropping below Rs.30,000 per MT by end ofMarch 2010.

Even on the sugarcane prices front, the CentralGovernment announced Fair and Remunerative Prices(FRP) in place of the old mechanism of StatutoryMinimum Price (SMP), while the State Government ofUttar Pradesh continued to announce a State AdvisedPrice (SAP). For the year, FRP was fixed at Rs.129.85per quintal, an increase of 60 percent over theprevious year’s SMP. Similarly, the SAP was fixed atRs.165 per quintal, increase of 18 percent overprevious year. In fact, industry in UP was forced tooffer incentives to farmers over and above the SAP toensure availability of cane.

Power, which is generated by bagasse, a by-product,is an important ingredient in the economics of thesugar business. Due to the relatively low productionof sugarcane, the bagasse generation was restrictedand prices were buoyant. Inspite of power shortagein the country, sugar units in UP are restricted from

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selling power on a merchant basis, which incidentallyfetches higher prices. However, considering the abovefactors, the Government of UP increased the price ofpower from Rs.2.97/kwh to Rs.3.81/kwh, giving somerespite to the sugar industry.

Ethanol, a by-product made from molasses also hasthe potential to contribute to the profitabilitysignificantly. As ethanol is cheaper than petrol, CentralGovernment announced blending of 5% ethanol withpetrol. During the year preceding the last, the globalprices had declined and mixing of ethanol proved tobe an uneconomical proposition. However, with therise in crude oil prices the mixture of ethanol isencouraged and is predicted to be a profitableventure.

Recently, the ethanol manufacturers have welcomedthe Empowered Group of Ministers’ (EOGM’s) decisionto fix price of Rs.27 per litre for ethanol. However, theprice has been fixed for only six months as againstindustry demand for three years.

OPPORTUNITIES

The sugar industry in last few years started balancingitself by not only producing sugar but also by addingvalue to its by products like bagasse, molasses, andpress-mud. The industry offers the opportunity ofproducing ethanol, extra neutral alcohol, rectified spirit,organic manure and most importantly in today’scontext co-generated power.

India is a power starving nation even after 53 years ofIndependence. We have a severe shortage ofelectricity in all most every nook & corner of thecountry. Huge investment is required by the Powersector to fulfill the ever growing demand of energy.Therefore, a right and conducive environment shouldbe created to encourage investment in this sector.

One of the key steps in this direction would be to allowsugar mills in the State of UP to sell its entire power atmerchant rates and should be offered some incentivefor setting up co-generating power plants. This wouldcertainly encourage sugar mills to come forward forsetting up large co-generating plants. The biggestadvantage of encouraging sugar mills vis-à-vis anormal power producer is that sugar sector generatesBio mass based power which is considered green andpollution free unlike thermal.

Molasses, another key by-product, is the raw materialfor the production of alcohol, ENA and ethanol.

Ethanol is a cheap oxiginate admixed in petrol.Increasing the threshold of 5% has long been underdiscussion, however, no final decisions has still beenannounced. Higher production of ethanol will help thecountry reduce its dependence on the import ofpetroleum.

During the year, the Government has increased levysugar quota from 10% to 20%, which contributed tolosses incurred by your Company. Industry is expectingthat not only levy quota would be rolled back to 10%,but the levy price would also be raised to a level whichwould cover atleast the cost of production. Suchmeasures would help in arresting the falling fortune ofthe sugar industry and give it a much needed respite.

Industry and the Government should work together tocreate stability in sugar production in the country. Onemechanism would be to link the prices of sugarcanewith the prices of sugar, i.e., which allows for allstakeholders in the value chain to be aligned. This willallow the long term sustainability for both the miller aswell as the farmer.

THREATS AND CONCERNS

Year after year, the apathy of Government towardsthe industry has led to a situation where most of thesugar mills continue to struggle to keep themselvesafloat. As experience shows, during the year gone by,the Government has encouraged import of bulk dutyfree raw and white sugar at the expense of IndianSugar Industry. Over reliance on imports by theGovernment flooded the Indian market with importedsugar, which in turn contributed to a significant fall inthe sugar prices. This myopic view of the Governmentnot only has enriched the sugar industries of othernations but also impaired the capacity of the IndianSugar Industry to pay a remunerative price to thefarmers on a sustainable basis. This move of theGovernment, may prompt the elimination of themedium and small players leading to loss of livelihoodof the families of thousands of workers employed inthe sugar industry.

Another aspect which needs to be highlighted here isthat by encouraging the import of sugar theGovernment has deprived the sugar companies frommaking some reasonable profits on which it would havepaid tax to the Exchequer. This would have alsoallowed mills to plough back some part of earnings inthe business, which is vital for the long term survival ofthe industry.

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OUTLOOK

The sugar industry in the forthcoming sugar season islikely to witness a spurt in the production of cane. Withall the resurgent activities as well as high cane pricespaid by the industry, the farmers are lured to switch tocultivating cane in comparison to any other alternativecrop. On the other hand, in the back drop of higherprices paid during the year, the sugarcaneprocurement price is likely to stay at higher levels evenduring the forthcoming sugar season 2010-2011.However, the selling price of sugar may not be in syncwith the cane price expected to be paid to farmers.This situation would again expose the sugar industryto the vulnerability of running uneconomic operations.

To bring back viability to operations, the industry hasbeen pushing the Government to decontrol the sugarindustry as well as impose duty on imported sugar.

HUMAN RESOURCES

The employees of the Company are valuable assetsof an organisation. Their right fitment, timelyrecognition and a well-defined growth path keepsthem retained and gets the best out of them. Theemployee output is an essential ingredient for thegrowth of the Company. Your Company takes utmostcare of the human resources as it applies the best ofHR policies and practices. Their needs and concernsare valued; timely performance appraisals, growthbased on merit and experience, reward andperformance recognition, training and development,are to name a few of the Company ’s HumanResource practices adopted by the Company. Theorganisation gives space to the views and opinions ofthe employees; their freedom of speech is countedand infact their ideas are welcomed and evenimplemented.

FINANCIAL PERFORMANCE

The Financial Results for the year ended 31st March,2010 are summarized below :

(Rs. in Crore)

Par t icu lar 2009-10 2008-09

Turnover 103.27 130.08

Profit before Interest, Depreciation & Tax 8.05 12.46

Profit before Depreciation 2.30 3.58

Profit before Tax ( - )2 .70 (-)1.37

Profit after Tax ( - )2 .70 (-)1.37

During the year under review, the turnover of yourCompany was at Rs. 103.27 crores as against

Rs.130.08 crores in the previous year. Financialperformance faced pressure due to steep fall insugar prices from Rs. 42,000/MT in January 2010 toRs. 30,000/MT in March 2010, resultantly PBIDT dippedfrom Rs. 12.46 crores last year to Rs. 8.05 crores duringthe year ended 31st March, 2010.

The quantity of cane crushed during the year underreview was 28% higher at 45.15 lacs quintal against35.40 lacs quintal in the previous year. However, theadverse climatic condition contributed to low recoveryat 8.81% as against 9.16% last year. The Power exportmarginally increased to 122 lacs unit during the yearas against 119 lacs unit in the previous year. The yearunder review remained quite challenging and we hopethat the performance of the Company will improve inthe following year.

INTERNAL CONTROL SYSTEM

The Company has a strong and an effective internalcontrol system within the organisation. The internalcontrol system in your organisation primarily comprisesof an internal audit function which continuously andvigilantly carries out the internal audit function ensuringthat every financial activity is scrutinized properly. Theinternal audit team reports its findings to the AuditCommittee in its meeting held atleast once in aquarter. The Audit Committee consists of independentDirectors as its members and they make sure thateach such findings of the Internal Audit team arediscussed at length and the suggestions of the internalaudit team are timely implemented. The AuditCommittee of the Company, also conducts theperiodic review of effectiveness of the internal systemsand process and take corrective action whereverrequired.

CAUTIONARY STATEMENT

“Management’s Discussion and Analysis Report”contains forward looking statements, which may beidentified by the use of words in that direction, orconnoting the same. All statements that addressexpectations or projections about the future,including, but not limited to statements about theCompany’s strategy for growth, product development,market position, expenditures and financial results areforward looking statements. The Company’s actualresults, performance or achievement could thus differmaterially from those projected in any such forward-looking statements. The Company assumes noresponsibility to publicly amend, modify or revise anyonward looking statements, on the basis of anysubsequent development, information or events.

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CORPORATE GOVERNANCE REPORT

1. COMPANY’S PHILOSOPHY ON CODE OF

GOVERNANCE:

Corporate Governance is an integral part of values,ethics and the best business practices followed bythe Company. The core values of the Company are:

• Commitment to excellence and customersatisfaction

• Maximising long term shareholders’ value• Socially valued enterprise and• Caring for people and environment.

In a nutshell, the philosophy can be described asobserving of business practices with the ultimate aimof enhancing long term shareholders’ value andcommitment to high standard of business ethics. TheCompany has in place a Code of Corporate Ethicsand Conduct reiterating its commitment to maintainthe highest standards in its interface with stakeholdersand clearly laying down the core values and corporateethics to be practised by its entire managementcadre.

3. AUDIT COMMITTEE:

The Company has an Audit Committee of Directorswhich consists of four Directors – all of them are Non-Executive Independent Directors, namely Shri P.K. Jain(Chairman of the Committee), Shri Gautam Khaitan,Shri J.R.C. Bhandari and Shri A.K. Kinra.

The ‘Terms of Reference’ and the constitution of thecommittee are in conformity with the provisions ofSection 292A of the Companies Act, 1956 and alsoClause 49 of the Listing Agreement with the StockExchanges.Five meetings of the Audit Committee were held during

2. BOARD OF DIRECTORS:

The Board of Directors presently consists of seven Directors, out of which one is Executive Director, six Non-Executive Directors (NED) four of whom are Independent Directors (IND). The Chairman is Non-Executive.Attendance and other details are as given hereunder:-

Director Category Number Whether last No. of other Directorships and Committee

of Board AGM attended Memberships/ Chairmanships

Meetings Other Committee Committee

Attended Directorships$ Memberships* Chairmanships*

Shri Bharat Hari Singhania, Chairman NED 5 No 4 1 -

Shri Vikrampati Singhania NED 5 Yes 3 2 -

Shri Gautam Khaitan IND 3 Yes 10 7 -

Shri P.K. Jain IND 5 Yes 3 - 1

Shri J.R.C. Bhandari IND 4 No 3 1 3

Shri A.K. Kinra IND 4 Yes 4 - -

Shri A.K. Jain, Whole-time Director Executive 5 Yes - - -

$ As per Section 275 read with Section 278 of the Companies Act, 1956

* Only covers Memberships/Chairmanships of Audit Committee and Shareholders/Investors Grievance Committee

Shri Bbarat Hari Singhania is father of Shri Vikrampati Singhania

NUMBER AND DATES OF BOARD MEETINGS HELD:- Five Board Meetings were held during the financial year ended31st March 2010 i.e., on 16th May 2009, 15th June 2009, 23rd July 2009, 23rd October 2009 and 21st January 2010.

The Board periodically reviews Compliance Reports of all laws applicable to the Company and has put in placeprocedure to review steps to be taken by the Company to rectify instances of non-compliances, if any.

Pursuant to the provisions of Clause 49 of the Listing Agreement, the Board has laid down a Code of Conduct forall Board members and Senior Management of the Company and the same is available on the website of theCompany (www.jksugar.net). All the Board Members and Senior Management Personnel have affirmed compliancewith the Code. This Report contains a declaration to this effect signed by the Whole-time Director.

the financial year ended 31st March, 2010 on:

Date of Meeting No. of Membersattended

16th May 2009 2

15th June 2009 4

23rd July 2009 3

23rd October 2009 3

21st January 2010 4

The Company Secretary acts as the Secretary of theCommittee. The Statutory Auditors attended 4meetings.

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4. SHAREHOLDERS/INVESTORS GRIEVANCE

COMMITTEE:

The Company has Shareholders / Investors GrievanceCommittee at the Board level, which consists of threeDirectors namely Shri Vikrampati Singhania (Chairmanof the Committee and Non Executive Director), ShriGautam Khaitan and Shri A.K. Kinra both being Non-Executive Independent Directors. The composition ofthe Committee is in conformity with Clause 49 (IV) (G)(iii) of the Listing Agreement.

Four Meetings of the Shareholders / Investors GrievanceCommittee were held during the financial year ended31st March, 2010 on:

Date of Meeting No. of Membersattended

16th May 2009 2

23nd July 2009 2

23th October 2009 2

21st January 2010 3

Shri Pumit Kumar Chellaramani, Company Secretaryis the Compliance Officer.

During the financial year 2009-10, no grievance wasreceived from the members. Also, no grievancepertaining to the previous financial year 2008-09 waspending at the end of the said previous financial year.As on date, there are no grievances pending.

The Board has delegated the power of share transferto a Committee of Directors and the share transferformalities are attended as required. All valid requestsfor transfer of shares in physical form were processedin time and there were no pending transfer of shares.During the financial year 2009-10, 20 meetings of thiscommittee were held.

5. REMUNERATION PAID TO DIRECTORS:

i) Whole-time Director: The aggregate valueof salary, perquisites and contribution toProvident Fund and Superannuation Funds forthe financial year ended 31st March, 2010to Shri A.K. Jain, Whole-time Director of theCompany is Rs. 38.88 lacs. No Commissionwas paid during the year.

The Company does not have any StockOption Scheme. In the case of Whole-timeDirector notice period is three months.

ii) Non-Executive/Independent Directors: Thecompany has paid sitting fees aggregating

to Rs.1.31 lacs to all the Non-ExecutiveDirectors for attending the meetings of theBoard/Committees thereof.

No other payments were made to Non-ExecutiveDirectors and such Directors did not have any otherpecuniary relationship or transctions vis-à-vis theCompany during the year except as stated above.

The number of Equity Shares held by the Non-Executives Directors as on 31st March 2010 are: ShriBharat Hari Singhania - 1,54,183 Equity Shares (including8,550 Equity Shares held as Karta of HUF), ShriVikrampati Singhania - 10,298 Equity Shares (includes8,437 Equity Shares held as Karta of HUF), Shri A.K.Kinra - 75 Equity Shares, Shri Gautam Khaitan-Nil EquityShares, Shri P.K. Jain-Nil Equity Shares, Shri J.R.C.Bhandari - Nil Equity Shares.

The Company does not have any outstandingconvertible instruments.

6. GENERAL BODY MEETINGS:

Location and time for the last three Annual GeneralMeetings (AGMs) :

Year Location Date Time

2006-2007 Shripati Singhania Hall, 31.08.2007 11.30 AM

Rotary Sadan, 94/2,

Jawahar Lal Nehru Road

(Chowringhee Road),

Kolkata - 700 020

2007-2008 Same as above 22.08.2008 11.30 AM

2008-2009 Same as above 21.08.2009 11.30 AM

A Special Resolution was passed at AGM held on 31stAugust 2007 under Section 269 read with ScheduleXIII to the Companies Act, 1956 for re-appointmentof Shri A.K. Jain, Whole-time Director of the Company.No special resolution was passed in the AGM held in2008 and 2009. No Special Resolutions were requiredto be put through postal ballot during the year.

A Special Resolution for approval under section 372Aof the Companies Act, 1956 to give guarantees toBanks, which provide direct lending facilities to thefarmers supplying sugarcane to the Company isproposed to be put through postal ballot inaccordance with the procedures prescribed thereof.

7. DISCLOSURES:

(a) Disclosures on materially significant relatedparty transactions i.e. transactions of theCompany of material nature, with itspromoters, the directors or the

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management, their subsidiaries or relativesetc. that may have potential conflict withthe interests of Company at large :

None. Suitable disclosure as required byAccounting Standard (AS-18) – Related PartyTransactions has been made in the AnnualReport.

(b) Details of non-compliance by the Company,penalties, str ictures imposed on theCompany by Stock Exchange or SEBI or anystatutory authority, on any matter related tocapital markets, during the last three years:

There was no case of non-compliance onany matter related to capital markets duringthe last three years.

(c) The Company has strengthened its riskmanagement system and has further laiddown procedures to inform Board membersabout risk assessment and minimizationprocedures. These procedures are beingperiodically reviewed to ensure thatexecutive management controls risk throughmeans of a properly defined framework.

8. MEANS OF COMMUNICATION:

Quarterly, half-yearly and annual results arepublished in leading English Newspapers and alsoin a Bengali language Newspaper (published fromKolkata). The said results are promptly furnishedto the Stock Exchanges for display on theirrespective websites and are also displayed onthe Company’s website-‘www.jksugar.net’.

Management Discussion & Analysis forms part ofthe Annual Report.

9. GENERAL SHAREHOLDERS’ INFORMATION:

Registered Office 7, Council House Street,Kolkata – 700 001Ph : 033-22486181

Annual GeneralMeeting (AGM)

a)Date, Time & Saturday, the 14th August,

Venue: 2010 at 10:00 A.M atShripati Singhania Hall,Rotary Sadan, 94/2,Jawahar Lal Nehru Road(Chowringhee Road),Kolkata-700 020

b)As required under clause 49(IV)(G)(i), a briefresume and other particulars of Directors retiring

by rotation and seeking re-appointment at theaforesaid AGM are given in the Notes to theNotice convening the said Meeting.

Financial Calendar (tentative):

Financial Reporting for the quarter ending :

1st Quarter ending Within 45 days of the end30th June 2010 of the quarter

2nd Quarter ending Within 45 days of the end30th September 2010 of the quarter

3rd Quarter ending Within 45 days of the end31st December 2010 of the quarter

4th Quarter ending Within 60 days of the end31st March 2011 of the 4th quarter

Annual General Between July andMeeting for the September, 2011financial year 2010-2011

Date of Book Closure 10th August to 14th August 2010(both days inclusive)

Listing on Stock The Equity Shares of theExchanges Company are listed on

‘Bombay Stock ExchangeLtd.’, Mumbai (BSE) and ‘TheCalcutta Stock Exchange Ltd.’Kolkata (CSE). The annual listingfee for the financial year 2010-11 has been paid to both theStock Exchanges.

Security Code for BSE - 532519Company’s Equity CSE - 10020254Shares on Stock The ISIN number of the EquityExchanges and ISIN No. Shares is INE210G01014

Stock Market Price Data

Month Bombay Stock Exchange Ltd. (BSE)

High (Rs.) Low (Rs.)

April-09 17.75 12.05

May-09 23.90 15.10

June-09 25.45 20.60

July-09 27.65 19.10

August-09 33.90 24.70

September-09 35.15 27.30

October-09 31.70 25.60

November-09 30.85 24.00

December-09 30.80 26.00

January-10 39.00 25.85

February-10 34.50 24.10

March-10 29.15 23.00

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Distribution of Shareholding (as on 31 st

March, 2010)

No. of Equity No. of Shares Shareholders

Shares Held Number % of Total Number % of Total

1- 500 550058 5.31 12234 95.99

501- 1000 186046 1.80 227 1.78

1001-5000 445187 4.30 203 1.59

5001- 10000 211520 2.04 30 0.24

10001& above 8966774 86.55 51 0.40

Total 10359585 100.00 12745 100.00

namely, NSDL and CDSL. As on 31st March 2010, 98.80% of the Equity Shares were held in dematerialisedform. The Equity Shares of the Company are activelytraded on the Bombay Stock Exchange Ltd. In respectof shares held in dematerialised form, all the requestsfor nomination, change of address, change of bankmandate/bank particulars and rematerialisation ofshares etc. are to be made only to the DepositoryParticipant with whom the shareholders have openedtheir Demat Account.

Outstanding GDRs/ADRs/Warrants/ : NilOptions or any Convertibleinstruments, conversion date andlikely impact on equity

Plant Locations

The plant of JK Sugar Limited is located at SindhauliRoad, Meerganj, Bareilly, Uttar Pradesh.

Address for Correspondence for Share Transfer

and Related Matters

1. Company Secretary Telephone : 91-11-23311112 /3/4/5

JK Sugar Limited Fax: 91-11-23716607

4th Floor, Link House Email : investorjksugar@jkmail.com

3,Bahadur Shah Website: www.jksugar.net

Zafar Marg,

New Delhi -110 002

2. Registrar & Share Transfer Agent

Alankit Assignments Ltd. Phone No: 91-11-23541234/42541234

Alankit House, 2E/21, Fax No. 91-11-42541967

Jhandewalan Extn., Email : rta@alankit.com

New Delhi-110 055 (India) Website : www.alankit.com

DECLARATION

It is hereby declared that all the members of the Boardand Senior Management personnel have affirmedcompliance with the “Code of Conduct for Membersof the Board and Senior Management of JK SugarLtd.” during the Financial Year ended 31st March 2010.

A.K. JainWhole-time Director

Share Transfer System

The transfer / transmission of shares in physical form isnormally processed and completed within a periodof 15 to 20 days from the date of receipt thereof. Incase of shares held in electronic form, the transfersare processed by NSDL/CDSL through the respectiveDepository Participants.

Dematerialisation of Shares and liquidity

Trading in the Equity Shares of the Company ispermitted on Stock Exchanges only in dematerialisedform. Shareholders may dematerialise their holdingsin physical form with any one of the Depositories

COMPARISON WITH BSE SENSEX

12

AUDITORS’ CERTIFICATE ON CORPORATE

GOVERNANCE

The Members,

JK Sugar Limited,

We have examined the compliance of conditions ofcorporate governance by JK SUGAR LIMITED for theyear ended on 31st March, 2010 as stipulated in Clause49 of the Listing Agreement of the said Companywith Stock Exchanges.

The compliance of conditions of CorporateGovernance is the responsibility of the Management.Our examination was limited to review of proceduresand implementation thereof, adopted by theCompany for ensuring the compliance of theconditions of Corporate Governance. It is neither anaudit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information andaccording to the explanations given to us and therepresentations made by directors and themanagement, we certify that the company hascomplied with the conditions of CorporateGovernance as stipulated in the above mentionedListing Agreement.

We further state that such compliance is neither anassurance as to the future viability of the Companynor the efficiency or effectiveness with which themanagement has conducted the affairs of theCompany

For S.S. KOTHARI MEHTA & CO.Chartered Accountants

Firm’s Registration No. 000756N

(CA Atul Seksaria)Place: New Delhi PartnerDated : 15th May 2010 Membership No. 086370

Disclosure of names of persons constituting grouppursuant to Regulation 3(1)(e)(i) of the SEBI (SubstantialAcquisition of Shares & Takeovers) Regulations 1997

JK Lakshmi Cement Limited, JK Tyre & Industries Ltd.,JK Paper Limited, Fenner (India) Ltd., JK Agri GeneticsLtd., BMF Investments Ltd., Florence Alumina Ltd.,Bengal & Assam Company Ltd., Nav Bharat VanijyaLtd., Juggilal Kamlapat Udyog Ltd., Param ShubhamVanijya Ltd., J.K. Credit & Finance Ltd., PranavInvestment (M.P.) Company Ltd., Southern Spinners andProcessors Ltd., Modern Cotton Yarn Spinners Ltd.,Hansdeep Industries and Trading Company Ltd.,Bhopal Udyog Ltd., Accurate Finman Services Ltd.,Sago Trading Ltd., Dwarkesh Energy Ltd., SaptrishiConsultancy Services Ltd., JK Enviro-Tech Ltd., J.K. RiskManagers & Insurance Brokers Ltd., PanchmahalProperties Ltd., Acorn Engineering Ltd., Elate BuildersPvt. Ltd., LVP Foods Pvt. Ltd., CliniRx Research Pvt. Ltd.,Rouncy Trading Pvt. Ltd., M/s. Habras International, JKPlant Bio Sciences Research Limited, NatextBiosciences Pvt. Ltd., Songadh Infrastructure & HousingLimited, Jaykaypur Infrastructure & Housing Limited,Umang Dairies Limited, M/s Juggilal KamlapatLakshmipat and Directors of the promoter group andtheir relatives.

13

AUDITORS’ REPORT

TO THE MEMBERS OF JK SUGAR LIMITED

1. We have audited the attached balance sheetof JK SUGAR LIMITED, as at 31st March, 2010,and also the profit and loss account and the cashflow statement for the year ended on that dateannexed thereto. These financial statements arethe responsibility of the Company’s management.Our responsibility is to express an opinion on thesefinancial statements based on our audit.

2. We conducted our audit in accordance with theauditing standards generally accepted in India.Those standards require that we plan and performthe audit to obtain reasonable assurance aboutwhether the financial statements are free ofmaterial misstatement. An audit includesexamining, on a test basis, evidence supportingthe amounts and disclosures in the financialstatements. An audit also includes assessing theaccounting principles used and significantestimates made by management, as well asevaluating the overall financial statementpresentation. We believe that our audit providesa reasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report)Order, 2003 {as amended by the Companies(Auditors’ Report) (Amendment) Order, 2004}issued by the Central Government of India in termsof sub-section (4A) of section 227 of theCompanies Act, 1956 and on the basis of suchchecks of the books and records of the Companyas we considered appropriate and according tothe information and explanations given to us, weenclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of thesaid Order.

4. Further to our comments in the Annexure referredto above, we report that:

(i) We have obtained all the information andexplanations, which to the best of ourknowledge and belief were necessary for thepurposes of our audit;

(ii) In our opinion, proper books of account asrequired by law have been kept by theCompany so far as appears from ourexamination of those books;

(iii) The balance sheet, profit and loss accountand cash flow statement dealt with by this

report are in agreement with the books ofaccount;

(iv) In our opinion, the balance sheet, profit andloss account and cash flow statement dealtwith by this report comply with the accountingstandards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956;

(v) Without qualifying our opinion, we drawattention to note no. B.4 – Schedule 13regarding accounting for of cane purchasesfor crushing season 2007-08 at Rs 110 perQuintal in terms of the interim Order of theHon’ble Supreme Court. Necessar yadjustment, if any, wil l be made inaccordance with subsequent order of theHon’ble court in the matter.

(vi) On the basis of written representationsreceived from the directors, as on 31st March,2010 and taken on record by the Board ofDirectors, we report that none of the directorsis disqualified as on 31st March, 2010 frombeing appointed as a director in terms ofclause (g) of sub- section (1) of section 274 ofthe Companies Act, 1956;

(vii) In our opinion and to the best of ourinformation and according to the explanationsgiven to us, the said accounts give theinformation required by the Companies Act,1956, in the manner so required and give atrue and fair view in conformity with theaccounting principles generally accepted inIndia:

(a) in the case of the balance sheet, of the stateof affairs of the Company as at 31st March,2010;

(b) in the case of the profit and loss account, ofthe loss for the year ended on that date; and

(c) in the case of the cash flow statement, ofthe cash flows for the year ended on thatdate.

For S.S. KOTHARI MEHTA & CO.Chartered Accountants

Firm’s Registration No. 000756N

(CA ATUL SEKSARIA)

Place: New Delhi PartnerDate: 15th May 2010 Membership No. 86370

14

ANNEXURE TO THE AUDITORS’ REPORT

(As referred to in paragraph ‘3’ of our report to themembers of JK SUGAR LIMITED on the accounts as at& for the year ended 31st March 2010)

1. The Company has maintained reasonable recordsshowing full particulars including quantitativedetails and situation of fixed assets.

2. According to the information & explanation givento us , the company has a regular program ofphysical verification, by which all the fixed assetsshall be verified in a phased manner, which in ouropinion is reasonable having regard to the size ofthe company & nature of its assets. Accordinglylast physical verification was conducted in the year2008-09 and no material discrepancies werenoticed on such verification.

3. In our opinion and according to the informationand explanations given to us, a substantial partof fixed assets has not been disposed off by theCompany during the year.

4. The inventory of the Company has been physicallyverified by the management during the year. Inour opinion, the frequency of verification isreasonable.

5. In our opinion and according to the informationand explanations given to us, the procedures ofphysical verification of inventory followed by themanagement are reasonable and adequate inrelation to the size of the Company and natureof its business.

6. On the basis of our examination of the records ofinventory, in our opinion, the Company hasmaintained proper records of inventory and asexplained to us, the discrepancies noticed onphysical verification of inventory as compared tobook records were not material and have beenproperly dealt with in the books of account.

7. According to the records of the Companyexamined by us and the information andexplanations given to us, no loans have beengranted / taken by the Company to / fromcompanies, firms and other parties covered inthe register maintained under section 301 of theCompanies Act, 1956.

8. In our opinion and according to the informationand explanations given to us, there are adequateinternal control procedures commensurate withthe size of the Company and the nature of itsbusiness with regard to purchase of inventory andfixed assets and for the sale of goods. Further, onthe basis of our examination of the books andrecords of the Company, carried out inaccordance with the generally accepted auditingpractices in India, we have neither come acrossnor have we been informed of any instance of a

continuing failure to correct major weaknesses inthe aforesaid internal control procedures.

9. Based on the audit procedures applied by us andaccording to the information and explanationsprovided by the management, we are of theopinion that the contracts or arrangements thatneed to be entered into the register maintainedunder section 301 of the Companies Act, 1956have been so entered.

10. In our opinion and according to the informationand explanations given to us, the transactionsmade in pursuance of such contracts orarrangements have been made at prices whichare reasonable having regard to prevailing marketprices at the relevant time.

11. In our opinion and according to the informationand explanations given to us, the Company hasnot accepted any deposits within the meaningof section 58A, 58AA or any other relevantprovisions of the Companies Act, 1956 and rulesframed thereunder.

12. In our opinion, the Company has an internal auditsystem commensurate with the size and natureof its business.

13. We have broadly reviewed the books of accountmaintained by the Company pursuant to theOrder made by the Central Government of Indiafor the maintenance of cost records undersection 209(1)(d) of the Companies Act, 1956 andare of the opinion that prime facie, the prescribedrecords have been made and maintained.However, we have not made a detailedexamination of the said records.

14. According to the records of the Companyexamined by us and the information andexplanations given to us, in our opinion, theCompany is generally regular in depositing withappropriate authorities undisputed statutory duesincluding provident fund, income-tax, sales-tax,service tax, wealth-tax, customs duty, excise duty,cess and other statutory dues applicable to it.

15. According to the records of the Companyexamined by us and the information andexplanations given to us, no undisputed amountspayable in respect of income tax, wealth tax, salestax, service tax, customs duty and excise dutywere outstanding, as at 31st March, 2010 for aperiod of more than six months from the datethey became payable.

16. According to the records of the Companyexamined by us and the information andexplanations given to us, there are no dues ofsales tax, income tax, service tax, customs duty,wealth tax, excise duty and cess which have notbeen deposited on account of any dispute, otherthan the following:-

15

S l . Name of the Nature of the Amount due Period to which Forum whereNo Statue dues (R s . / lakh s . ) the amounts pending

re latesDy Commissioner

1. Income Tax Act, 1961 Income Tax 39.25 2004-05 of Income TaxCircle-10, Kolkata

Reversal of CENVAT Custom, Excise &2. Central Excise Act, 1944 availed on Jointing Sheets, 1.89 Jan 2006 to June 2006 Service Tax Appellate

Welding electrodes etc. Tribunal (CESTAT)Reversal of CENVAT on Custom, Excise &

3. Central Excise Act, 1944 HDPE Bags used for 1.56 2005-06 Service Tax Appellatepacking of Raw Material Tribunal (CESTAT)Reversal of CENVAT on Custom, Excise &

4. Central Excise Act, 1944 Welding Electrodes/ 5.04 April 05 to Nov 05 Service Tax AppellateJointing Sheets/Service Tax Tribunal (CESTAT)

Service Tax under Custom, Excise &5. Finance Act, 1994 Service Tax on GTO 3.23 Nov 04 to Sep 07 Service Tax Appellate

Tribunal (CESTAT)807.26

6. Central Excise Act, 1944 10% of sale value of (Stay has been granted by April 03 to Dec. 07 Custom, Excise &electricity assuming CESTAT against the Service Taxelectricity as a exempted reversal of CENVAT of Appellate Tribunalgoods Rs. 5.26 Lacs towards (CESTAT)

exempted goods. The impugned order may not be

tenable) (Also refer Note No B.3 in Schedule 13.)

10% of sale value of Additional7. Central Excise Act, 1944 elctricity assuming 14.85 (Also refer Note Jan to June 09 Commissioner

electricity as a exempted No. B.3 in Schedule 13.) Central Excisegoods MeerutReversal of CENVAT credit Dy. Commissioner

8. Central Excise Act, 1944 taken on MS plate/HR plate/ 1.13 Sept. 06 to Aug 07 Central Excise,Grand packing BareillyExcise duty payable on 58.42 (out of this Rs.48.42 Custom, Excise &

9. Central Excise Act, 1944 burnt molasses due to has already been provided 2006-07 Service Tax Appellateautocombusuin in the in the book) Tribunal (CESTAT)season 2006-07Reversal of CENVAT Credit Dy. Commissioner

10. Central Excise Act, 1944 taken on MS/HR Plates 2.69 Sept. 2007 to April 2008 Central ExciseMeerut

The Uttar Pradesh Interest payable on sales From May 1998 to Commissioner11. Trade Tax Act, 1948 tax collected but not paid 79.76 Feb. 2003 Trade Tax, U.P.

17. The Company does not have any accumulatedlosses as at the close of the financial year. TheCompany has not incurred any cash losses duringthe financial year covered by our audit. TheCompany did not incur cash losses during theimmediately preceding financial year.

18. According to the records of the Companyexamined by us and the information andexplanations given to us, in our opinion, theCompany has not defaulted in repayment of duesto any financial institution or bank during the year.

19. According to the information and explanationsgiven to us, corporate guarantee issued by thecompany for loans taken by others from banks isnot prejudicial to the interest of the company.

20. According to the records of the Companyexamined by us and the information andexplanations given to us, in our opinion, the termloans taken by the Company have been appliedfor the purpose for which they were obtained.

21. According to the information and explanationsgiven to us and on the basis of an overallexamination of the balance sheet of theCompany, in our opinion, generally there are nofunds raised by the company on short term basis,which have been used for long term investment.

22. During the year, the Company has not made anypreferential allotment of shares to parties andcompanies covered in the register maintainedunder section 301 of the Companies Act, 1956.

23. According to the information and explanationsgiven to us, during the year covered by our auditreport, the Company has not issued anydebentures.

24. During the year covered by our audit report, theCompany has not raised any money by publicissue.

25. During the course of our examination of the booksand records of the Company carried out inaccordance with the generally accepted auditingpractices in India, we have neither come acrossany instance of fraud on or by the Company,noticed or reported during the year, nor have webeen informed of such case by the management.

26. The other provisions of the Order do not appearto be applicable for the year under report.

For S.S. KOTHARI MEHTA & CO.Chartered Accountants

Firm’s Registration No. 000756N

(CA ATUL SEKSARIA)Place: New Delhi PartnerDate: 15th May 2010 Membership No. 86370

16

BALANCE SHEET (AS AT 31ST MARCH, 2010)

Rs. in Lacs

Schedule 31.03.2010 31.03.2009

SOURCES OF FUNDSSHAREHOLDERS’ FUNDS

Capital 1 2,385.96 2,385.96Reserves & Surplus 2 622.34 1,010.54

3,008.30 3,396.50

LOAN FUNDS 3Secured Loans 6,451.62 5,118.44Unsecured Loans 750.41 769.04

7,202.03 5,887.4810,210.33 9,283.98

APPLICATION OF FUNDSFIXED ASSETS 4Gross Block 11,372.57 11,145.93Less: Depreciation 3,753.91 3,253.81

Net Block 7,618.66 7,892.12Capital Work in Progress - 20.95

7,618.66 7,913.07

DEFERRED TAX ASSET (NET) 575.88 575.88CURRENT ASSETS, LOANS AND ADVANCES 5Inventories 10,935.22 5,319.09

Sundry Debtors 280.91 72.05Cash & Bank Balances 174.76 131.36Loans and Advances 288.48 368.48

11,679.37 5,890.98LESS: CURRENT LIABILITIES AND PROVISIONS 6Current Liabilities 9,541.73 5,018.66

Provisions 121.85 88.289,663.58 5,106.94

Net Current Assets 2,015.79 784.04

MISCELLANEOUS EXPENDITURE - 10.99(To the extent not written off or adjusted)

10,210.33 9,283.98Significant Accounting Policesand Notes to Accounts 13Schedules 1 to 6 and 13 attached to the Balance Sheet are an integral part thereof.As per our report of even date attached.For S.S. KOTHARI MEHTA & CO.,Chartered AccountantsFirm’s Registration No. 000756N

BHARAT HARI SINGHANIA Chairman

(CA ATUL SEKSARIA) P. K. JAINPartner GAUTAM KHAITANMembership No.:86370 J. R. C. BHANDARI

VIKRAMPATI SINGHANIAPlace : New Delhi PUMIT KUMAR CHELLARAMANI A. K. KINRADated : This the 15th day of May 2010. Company Secretary A. K. JAIN Directors

17

PROFIT AND LOSS ACCOUNT (FOR THE YEAR ENDED 31ST MARCH, 2010)

Rs. in Lacs

Schedule 2009-10 2008-09

INCOME

Sales (Gross) 10,232.54 12,823.15

Less: Excise Duty 372.22 625.62

Sales (Net) 9,860.32 12,197.53Other Income 7 94.73 185.12Increase/(Decrease) in Stocks 8 5,516.46 (4,033.26)

15,471.51 8,349.39EXPENDITUREMaterial and Manufacturing Expenses 9 13,724.20 6,118.98Employees Cost 10 721.18 662.12Administrative and Other Expenses 11 221.50 321.90

14,666.88 7,103.00Operating Profit (Before Interest & Depreciation) 804.63 1,246.39Cost of Borrowing 12 574.54 887.80Profit/(Loss) Before Depreciation 230.09 358.59Depreciation 500.19 495.11Profit/(Loss) Before Tax (270.10) (136.52)Provision for Taxation- Deferred Tax - (6.91)- Fringe Benefits Tax - 7.25

Profit/(Loss) After Tax (270.10) (136.86)

APPROPRIATIONS

Molasses Storage Maintenance Reserve Fund 2.68 2.58Balance carried to Balance Sheet (272.78) (139.44)Earning Per Share (in Rs.)

(Refer Note no. B.14 in Schedule 13)- Basic & Diluted (2.61) (1.32)

Significant Accounting Policesand Notes to Accounts 13Schedules 7 to 13 attached to the Profit and Loss Account are an integral part thereof.

As per our report of even date attached.

For S.S. KOTHARI MEHTA & CO.,

Chartered Accountants

Firm’s Registration No. 000756N

BHARAT HARI SINGHANIA Chairman

(CA ATUL SEKSARIA) P. K. JAIN

Partner GAUTAM KHAITAN

Membership No.: 86370 J. R. C. BHANDARI

VIKRAMPATI SINGHANIA

Place : New Delhi PUMIT KUMAR CHELLARAMANI A. K. KINRA

Dated : This the 15th day of May 2010. Company Secretary A. K. JAIN Directors

18

Rs. in Lacs

SCHEDULE 1 31.03.2010 31.03.2009

SHARE CAPITAL

AUTHORISED:

Equity Shares - 1,10,00,000 of Rs.10/- each 1,100.00 1,100.00

(Previous Year 1,10,00,000 shares of Rs.10/- each)

Preference Shares - 15,00,000 of Rs.100/- each 1,500.00 1,500.00

(Previous Year 15,00,000 shares of Rs.100/- each)

Unclassified Shares - 90,00,000 of Rs.10/- each 900.00 900.00

(Previous year 90,00,000 shares of Rs.10/- each)

3,500.00 3,500.00

ISSUED, SUBSCRIBED AND PAID UP:

Equity Shares - 103,59,585 of Rs. 10/- each 1,035.96 1,035.96

(Previous Year 103,59,585 shares of Rs.10/- each)

Zero Coupon Preference Shares - 15,00,000 of Rs. 90/- each 1,350.00 1,350.00

(Previous Year 15,00,000 shares of Rs.90/- each) 2,385.96 2,385.96

Notes:

1. Pursuant to the Scheme of Arrangement and Amalgamation sanctioned by the Hon’ble High Courts ofKolkata and Karnataka in an earlier year:

- 51,84,765 fully paid up Equity Shares of the face value of Rs.10 each and 15,00,000 Zero Coupon PreferenceShares of Rs.100 each were issued to the shareholders of JK Tyre & Industries Ltd. (JKTIL) and to JKTIL respectivelywithout payment being received in cash.

Rs.10 of each Preference Share had been converted into one fully paid Equity share of Rs.10 each at par.The balance Rs.90 per Preference Share shall be redeemed in three equal instalments of Rs. 30 each onMarch 31 of 2019, 2020 and 2021 respectively.

The Company has a call option to prepay part or the whole of Rs. 90 of each Preference Share at any timewithout any premium or discount by giving one month’s notice in writing.

2. Paid up Equity Capital includes 9000 Equity Shares issued in lieu of bonus shares issued by JKTIL by capitalisationof reserves.

Rs. in Lacs

SCHEDULE 2

01.04.2009 Additions Transfers / 31.03.2010

Adjustments

RESERVES AND SURPLUS

Debenture Redemption Reserve 113.60 - - 113.60

Molasses Storage Maintenance Reserve Fund 43.40 2.68 - 46.08

Share Premium 481.14 - 118.10 363.04

Surplus in Profit & Loss Account 372.40 (272.78) - 99.62

1,010.54 (270.10) 118.10 622.34

Previous year figures 1,257.22 (136.86) 109.82 1,010.54

(a) Being Provision for Premium on redemption of Zero Coupon Non-Convertible Debentures.

(a)

19

Rs. in Lacs

SCHEDULE 3 31.03.2010 31.03.2009

LOANS

SECURED LOANS

Zero Coupon Non - Convertible Debentures 595.69 595.69Premium on Zero Coupon Non - Convertible Debentures 629.61 514.37

Term Loans:Financial Institutions 485.94 763.04Banks 1,435.09 1,701.42Others 761.48 582.59

Other Loans:Working Capital Loans from Banks 2,543.81 961.33

6,451.62 5,118.44

UNSECURED LOANS

Deferred Sales Tax 95.41 59.04Short Term Loans:From Others 655.00 710.00

750.41 769.04

Notes:1. 8,312 Zero Coupon Non-Convertible Debentures (ZCNCD) of Rs. 10,000 each fully paid up (since reduced to Rs.7166.63) aggregating

Rs. 595.69 lacs issued to a financial institution, are secured by a first pari passu charge in favour of trustee on movable and immovable

assets of the Company, subject to the prior charges in favour of the Company’s Bankers on specified movables for securing working

capital requirements. These debentures are redeemable at a premium based on a YTM of 10% p.a. with quarterly rests w.e.f. 1st April

2010.

2. Term loans aggregating to Rs. 485.94 lacs from Financial Institutions and Rs. 435.20 lacs from Banks are secured/to be secured by a

mortgage/charge on all immovable and movable assets, pertaining to the Sugar unit at Meerganj (Bareilly) present & future, ranking pari

passu with the mortgages/charges created on the said assets subject to the prior charges in favour of the Company’s Bankers on

specified movables for securing working capital requirements. Term Loans from banks include interest-free excise term loan under

“Scheme for extending Financial Assistance to Sugar Undertaking,2007” amounting to Rs. 993.51 lacs which is secured by residual

charge on Fixed Assets of the Company both present & future. The term loan of Rs. 699.08 lacs from others is secured by a second

charge/mortgage on the immovable and movable assets pertaining to the Sugar unit at Meerganj (Bareilly). Vehicles loan of Rs. 6.38 lacs

is secured by hypothecation of specified vehicle.

3. Term Loan from others includes loan of Rs. 62.40 lacs secured by way of a charge on all the movable and immovable assets of the

Company, both present & future, subordinate and subservient to the charge created/to be created in favour of Financial Institutions and

Banks.

4. Other loans from Banks are secured by hypothecation of stock and book debts, etc. and second charge on fixed assets pertaining to the

Sugar unit at Meerganj (Bareilly).

5. Installments of Term Loans repayable within one year - Rs.1344.70 Lacs (Previous year - Rs. 724.54 Lacs).

SCHEDULE 4

FIXED ASSETS Rs. in Lacs

GROSS BLOCK DEPRECIATION NET BLOCK

PARTICULARS As at Additions Deductions/ As at Upto For the Deductions/ Upto As at As at

31.03.09 Adjustments 31.03.10 31.03.09 Year Adjustments 31.03.10 31.03.10 31.03.09

Land (*) 652.96 - - 652.96 - - - - 652.96 652.96

Buildings 1,812.18 30.35 - 1,842.53 298.36 43.10 - 341.46 1,501.07 1,513.82

Plant and Machinery(^) 8,606.79 188.96 - 8,795.75 2,918.15 449.75 - 3,367.90 5,427.85 5,688.64

Furniture & Fixtures 25.13 1.32 0.65 25.80 15.62 0.99 (0.09) 16.52 9.28 9.51

Vehicles 45.33 - - 45.33 18.86 4.31 - 23.17 22.16 26.47

Intangible Assets

-Software 3.54 6.66 - 10.20 2.82 2.04 - 4.86 5.34 0.72

11,145.93 227.29 0.65 11,372.57 3,253.81 500.19 (0.09) 3,753.91 7,618.66 7,892.12

Previous year figures 11,083.59 100.60 38.26 11,145.93 2,769.41 495.11 (10.71) 3,253.81 7,892.12 -

Note:(*) Includes Rs. 16.80 Lacs refundable lease premium for initial lease period of 30 years paid to Government of Uttar Pradesh in 2006-07 Formal Lease deed is

pending for execution.

(^) Gross Block as at 31.03.10 of Plant and machinery includes an amount of Rs. 321.69 Lacs (Previous year Rs.321.69 Lacs) being Company’s share of CapitalExpenditure incurred on 132 KV Transmission Line & Bay for which the Company has got an exclusive right of use from Uttar Pradesh Power Corporation Limitedin terms of Power Purchase Agreement entered into by the Company with them.

20

Rs. in LacsSCHEDULE 5 31.03.2010 31.03.2009CURRENT ASSETS, LOANS AND ADVANCESA . CURRENT ASSETS

Inventories (as taken, valued and certified by the Management)Stores and Spare Parts 188.42 205.07Finished Goods 10,726.88 5,101.64Work in process 19.92 12.38

10,935.22 5,319.09Debtors (Unsecured and considered good):Debts over Six months 41.52 39.61Other Debts 239.39 32.44

280.91 72.05Cash and Bank Balances- Cash in Hand 35.05 1.07- Cheques in Hand - 3.08- Balance with Scheduled Bank- In Current Accounts 52.49 22.58- In Deposit Accounts 86.44 102.22

Includes Rs. 33.45 lacs lodged with Bank(Previous year Rs. 52.28 lacs)

- Balance with Non-Scheduled Bank 0.78 2.41(Refer Note no. B.15 in Schedule 13)

174.76 131.3611,390.89 5,522.50

B . LOANS AND ADVANCES(Unsecured and Considered Good)Advances recoverable in cash or in kind or for valueto be received 284.29 364.29Deposit with Govt. Authorities and Others 4.19 4.19

288.48 368.4811,679.37 5,890.98

SCHEDULE 6CURRENT LIABILITIES AND PROVISIONSA . CURRENT LIABILITIES

(Refer Note no. B.13 in Schedule 13)Sundry Creditors 8,815.42 4,473.96Other Liabilities 512.16 408.54Interest accrued but not due on loans 214.15 136.16

9,541.73 5,018.66B . PROVISIONS

Provision For Retirement Benefits 121.31 87.59Provision For Wealth Tax 0.54 0.69

121.85 88.289,663.58 5,106.94

SCHEDULE 7 2009-10 2008-09OTHER INCOMEInterest Received from Banks & Others (Includes Taxdeducted at Source Rs.1.06 lac (Previous year Rs.1.85 lac)) 6.64 9.27Profit on Sale of Fixed Assets - 0.68Miscellaneous Receipts 86.09 167.86Liability/Provision no longer required, written back 2.00 7.31

94.73 185.12

21

Rs. in LacsSCHEDULE 8 2009-10 2008-09

INCREASE/(DECREASE) IN STOCKSOpening Stock:

Finished Goods 5,101.64 9,257.59

Process 12.38 136.87

5,114.02 9,394.46

Closing Stock:

Finished Goods 10,726.88 5,101.64

Process 19.92 12.38

10,746.80 5,114.02

5,632.78 (4,280.44)

Less : Excise duty variation on opening/closing stock (116.32) 247.18

Increase/(Decrease) in Stocks 5,516.46 (4,033.26)

SCHEDULE 9

MATERIAL AND MANUFACTURING EXPENSES

Raw Materials Consumed 13,061.74 5,401.40

Consumption of Stores and Spares 521.56 528.50

Power and Fuel 35.61 55.40

Repair to Building 21.50 32.12

Repair to Machinery 83.79 101.56

13,724.20 6,118.98

SCHEDULE 10

EMPLOYEES COST

Salaries, Wages, Bonus and Gratuity 582.64 531.39

Contribution to Provident and Other Funds 53.29 40.23

Employee’s Welfare and Other Benefits 85.25 90.50

721.18 662.12

SCHEDULE 11

ADMINISTRATIVE AND OTHER EXPENSES

Rent 3.56 3.57

Rates & Taxes 7.58 8.96

Insurance 2.44 9.88

Commission 14.79 31.86

Discount 4.06 8.85

Directors fees 1.31 1.37

Loss on Assets discarded/sold 0.08 15.96

Share Issue Expenses written off 9.43 0.39

Preliminary Expenses written off 1.56 2.36

Bad Debts written off - 58.21

Miscellaneous Expenses 176.69 180.49

221.50 321.90

SCHEDULE 12

COST OF BORROWINGS

Interest On:

- Term Loan 159.90 223.90

- Others 414.64 663.90

574.54 887.80

22

SCHEDULE 13

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A . SIGNIFICANT ACCOUNTING POLICIES

1. The accounts are maintained on accrual basis.Claims/Refunds not ascertainable with reasonable certaintyare accounted for on settlement basis.

2. (i) Fixed Assets are stated at cost and net of cenvat, where applicable.

(ii) Depreciation on Fixed assets is calculated on straight-line method, at the rates specified in Schedule XIVto the Companies Act, 1956.

(iii) Intangible Assets are being recognised if the future economic benefit attributable to the asset areexpected to flow to the Company and the cost of the asset can be measured reliably. The same arebeing amortised over the expected duration of benefits.

3. Expenditure during construction/erection period is included under capital work-in-progress and is allocated tothe respective fixed asset on completion of construction/erection.

4. Assets and Liabilities related to foreign currency transactions are translated at the exchange rate prevailing atthe end of the year or at the contracted rate, where applicable. Exchange difference arising on suchtranslation is charged to the Profit and Loss Account. Premium in respect of forward contracts is recognizedover the life of contract.

5. Inventories are valued at lower of cost and net realisable value (except scrap/waste/By-Products, which arevalued at net realisable value). The cost is computed on weighted average basis. Finished Goods andProcess Stock include cost of conversion and other costs incurred in bringing the inventories to their presentlocation and condition.

6. Borrowing cost is charged to Profit & Loss Account except cost of borrowing directly attributable to acquisitionand construction of a qualifying asset, which is capitalised till the date of commercial use of the asset.

7. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable amount. An impairmentloss is charged to the Profit & Loss account when an asset is identified as impaired. Reversal of impairmentloss recognised in prior periods is recorded when there is an indication that the impairment losses recognisedfor the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revisedcarrying value of the assets over its remaining useful life.

8. Employee Benefits:

(i) Defined Contribution Plan

Employee Benefits in the form of Superannuation Fund, Provident Fund (PF) and Employee DepositLinked Insurance (EDLI) are considered as defined contribution plans and the contributions thereon arecharged to the Profit and Loss Account of the year when the contribution to the respective funds aredue.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity, Leave Encashment and PF (funded) are considered as definedbenefit obligations and are provided for on the basis of an actuarial valuation, using the projected unitcredit method, as at the date of the Balance Sheet.

(iii) Short term compensated absences are provided based on past experience of the leave availed.Actuarial gain/losses, if any, are immediately recognized in the Profit and Loss Account.

9. Current Tax is the amount of tax payable on the estimated taxable income for the current year as per theprovisions of the Income Tax Act, 1961. Deferred Tax Assets are recognised on the basis of reasonable / virtualcertainty that sufficient future taxable income will be available against which the same can be realised.

10. Provision in respect of present obligation arising out of past events are made in Accounts when reliableestimates can be made of the amount of the obligation. Contingent Liabilities (if material) are disclosed byway of Notes to Accounts. Contingent Assets are not recognised or disclosed in Financial Statements

and are included, if any, in the Directors’ Report.

23

B . NOTES TO ACCOUNTS

1. Contingent Liabilities not provided for:

Rs. in Lacs

31.3.2010 31.3.2009

(a) Claims against the Company

not acknowledged

- Income Tax 39.25 39.25

- Trade tax 94.50 94.50

- Others 66.64 200.39 66.64 200.39

(b) Excise demands under dispute 25.54 12.83

2. Claims of Rs. 227.51 lacs (Previous Year Rs.227.51 lacs) in respect of Entry Tax are pending against theCompany which have not been acknowledged. The company has been legally advised that no liabilitywould arise on this account, since the Hon’ble Allahabad High Court vide its Order dt. 27.01.2004 declaredthe Entry Tax Act, 2000 as Ultra Virus and the Hon’ble Supreme Court vide its interim Order dt. 17.04.2007 hasupheld the Order of the Hon’ble Allahabad High Court.

3. During previous year the company had received a demand/Show cause Notices for Rs 884.37 Lacs fromCommissioner Central Excise Meerut (U.P.) demanding duty on the generation of electricity due to the nonmaintenance of separate set of books. Out of Rs. 884.37 lacs, demand of Rs.807.26 lacs has been stayedby Hon’ble Custom, Excise & Service Tax Appellate Tribunal (CESTAT) and remaining Rs. 77.11 lacs has beendropped by Commissioner Central Excise pursuant to guideline set by Hon’ble Supreme Court. Howeverduring the year on the similar grounds the Company has received show cause notice amounting to Rs.14.85lacs for which defence reply has been submitted.

4. The Company has accounted for cane purchases for crushing season 2007-08 at Rs.110 per quintal in termsof the interim Order passed by the Hon’ble Supreme Court. Necessary adjustments, if any, will be made inaccordance with subsequent orders of the Hon’ble Court in the matter.

5. Sundry Creditors include short term loan to farmers amounting to Rs. 7197.24 Lacs from Bank of India (Previousyear - Rs. 3447.55 Lacs) and Rs. 1150 Lacs from IDBI (Previous year - Rs. 600 Lacs), wherein the company isacting as a collecting agent and the same is backed by corporate guarantee from the company.

6. Miscellaneous expenditure to the extent not written off is represented by:

Rs. in Lacs

31.03.2010 31.03.2009

(a) Preliminary Expenses 0.00 9.43

(b) Expenditure related to Share Issue 0.00 1.56Total 0.00 10.99

In pursuance to the requirement of Accounting standard on intangible assets AS-26, the managementconsidered it appropriate to write off the balance Preliminary Expenses of Rs.9.43 Lacs and Expenditurerelated to Share Issue of Rs. 1.56 Lacs during the year.

2009-10 2008-09

7. Auditor’s Remuneration:

(a) Statutory Audit 1.50 1.00

(b) Tax Audit 0.50 0.35

(c) For Certificates/ other services 0.41 0.51

(d) Reimbursement of expenses 0.46 0.23

Total 2.87 2.09

8. Remuneration to Whole-time Director (WTD):

(a) Salary 15.42 13.35

(b) Contribution to P.F. & Other Funds* 4.16 3.60

(c) Value of Perquisites & Allowances 19.30 18.33

Total 38.88 35.28

* excludes Provision for Gratuity & Leave Encashment, as the actuarial valuation is done on overall Companybasis.

24

(a) Defined Benefit Plans-

Amounts recognised as an expense and included in Schedule 10 of Profit & Loss Account.

Item “Salaries, Wages, Bonus and Gratuity etc” includes Rs.30.36 lacs for gratuity, Rs. 15.09 lacs for leave encashment.

(b) Defined Contribution Plans -

Amount recognised as an expense and included in Schedule 10 of Profit & Loss Account Item “Contributions to Provident

and other Funds” Rs. 53.29 lacs

(c) Information of changes in plan assets has not been given since it is not applicable.

(d) The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and

other relevant factors, such as supply and demand in the employment market.

9. EMPLOYEE DEFINED BENEFITS :

(a) Defined Benefit Plans-as per actuarial valuation as on March 31, 2010.

Rs. in LacsMarch 31, 2010 March 31, 2009

Gratuity Leave Encashment Gratuity Leave Encashment

Non-Funded Non-Funded Non-Funded Non-Funded

I Expenses recognised in the Profit& Loss Account for the year endedMarch 31,2010

1 Current Service Cost 10.26 4.36 8.34 3.81

2 Interest Cost 5.90 1.11 4.72 1.18

3 Expected return on plan assets - - - -

4 Actuarial (Gains) / Losses 14.20 9.62 10.35 8.59

5 Total expense 30.36 15.09 23.41 13.58

I I Net Asset/(Liability) recognised in theBalance Sheet as at March 31, 2010

1 Present Value of Defined BenefitObligation as at March 31, 2010 101.58 19.73 73.70 13.90

2 Fair value of plan assets as atMarch 31, 2010 - - - -

3 Funded status [Surplus/(Deficit)] - - - -

4 Net asset/(liability) as at March 31, 2010 (101.58) (19.73) (73.70) (13.90)

I I I Change in obligation during theYear ended March 31, 2010

1 Present Value of Defined BenefitObligation at the beginning of the year 73.70 13.90 62.05 14.79

2 Current Service Cost 10.26 4.36 8.34 3.81

3 Interest Cost 5.90 1.11 4.72 1.18

4 Actuarial (Gains) / Losses 14.20 9.62 10.35 8.59

5 Benefit Payments (2.48) (9.26) (11.76) (14.47)

6 Transitional Adjustment - - - -

7 Present Value of Defined BenefitObligation at the end of the year 101.58 19.73 73.70 13.90

I V Actuarial Assumptions :

1 Discount Rate 8.00% 8.00% 8.00% 8.00%

2 Expected rate of return on plan assets Nil Nil Nil Nil

3 Expected Average remainingworking lives of employees 19.76 18.23 20.58 18.81

4 Salary Escalation 5.5% 5.5% 5.5% 5.5%

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10. Deferred Tax Asset/Liability has been created pursuant to Accounting Standard on ‘Accounting for Taxeson Income’ (AS-22) issued by the Institute of Chartered Accountants of India. The Net Deferred Tax Asset/Liability as on 31st March 2010 is as under:

Rs. in LacsAs on As on

31.03.2010 31.03.2009(1) Deferred Tax Liabilities

(a) Related to Fixed Assets 947.87 909.89(b) Others 9.33 3.74 Sub Total 957.20 913.64

(2) Deferred Tax Assets(a) Disallowance under Income Tax Act, 1961 34.53 25.05(b) Unabsorbed Depreciation & Loss(*) 1,397.79 1,417.05(c) Others 100.76 47.41 Sub Total 1,533.08 1,489.51

(3) Deferred Tax Assets (Net) 575.88 575.88

(*) Based on the assessment, no further DTA has been recognized during the year and the same hasbeen suitable adjusted in carried forward losses.

11. Advances include Rs.0.90 lacs (previous year Rs.0.90 lacs) for which legal and other necessary action hasbeen taken. In the opinion of the management, these advances are fully recoverable and the samehave been classified as good.

12. Debts over six months includes Rs. 39.61 lacs receivables from Uttar Pradesh Power Corporation Limited(UPPCL) towards supply of electricity, for which legal and necessary action has been taken. In the opinionof the Management, these debts are recoverable and the same has been classified as good.

13. Based on information so far available with the Company in respect of MSME (as defined in ‘The Micro,Small & Medium Enterprises Development Act 2006’) there are no delays in payment of dues to suchenterprises during the year and there are no such dues payable at the year end. Further no interest hasbeen paid/payable to such enterprises.

14. Earning Per Share:31.03.2010 31.03.2009

(a) Profit / (Loss) after tax (Rs. In Lacs) (270.10) (136.86)(b) Weighted average no. of Equity shares 10359585 10359585(c) Nominal value of Equity shares (Rs.) 10.00 10.00(d) Earning per Share

- Basic & Diluted – per Equity share (Rs.) (2.61) (1.32)

15. Details of Balance with Non-Scheduled Banks are as under:Rs. in Lacs

S l . Maximum Balance

No. Name of the Bank Balance as at outstanding

during the Year

31.03.10 31.03.09 2009-10 2008-091 Bareilly Kshetriya Gramin Bank, Meerganj 0.06 0.14 2.68 16.112 Bareilly Kshetriya Gramin Bank, Parsakhera 0.28 1.62 151.14 226.783 Bareilly Kshetriya Gramin Bank, Civil Lines, Bareilly 0.11 0.19 0.25 0.36

4 Prathma Bank, Rampur 0.22 0.24 16.67 2.215 District Co-operative Bank Ltd., Bareilly 0.11 0.22 10.35 10.456 New Urban Co-operative Bank Ltd., Milak (Rampur) 0.00 0.00 0.00 0.34

16. Related Party Disclosure:Relationships

(a) Holding Company: Bengal & Assam Company Ltd.(b) Key Management Personnel: Shri A.K. Jain, Whole-time Director*(c) Relatives of Key Management Personnel Smt. Renu Jain (Wife of Shri A.K. Jain)$

* Remuneration-Details given Note No B.8.$ Lease rent - Rs. 7.20 lacs (Previous year Rs. 7.20 Lacs)No amount is outstanding at year end.

26

17. Particulars of Capacity, Production, Purchases, Sales and Stocks:

Particulars Unit Installed Opening Stock as on Production Sales Closing Stock as on

Capacity(*) 01.04.2009 Turnover 31.03.2010

Qty. Qty. Rs. in Lacs Qty. Qty. Rs. in Lacs Qty. Rs. in Lacs

Sugar MT 5000 TCD 25,064.4 4,834.26 44,705 33,295.9 8,977.58 36,473.5 10,494.45

(5000TCD) (62,445) (9,119.22) (33,133.2) (70,513.8) (11,673) (25,064.4) (4,834.26)

Power Lac 19 MW - - 295.39 121.76(#) 460.65 - -

KWH (19 MW) (-) (-) (256.12) (119.61) (355) (-) (-)

Molasses MT - 4,489.9 267.38 24,005.6 17,883.4 794.31 10,612.1 232.42

(-) (3,005.4) (138.37) (18,690.1) (17,205.6) (795.15) (4,489.9) (267.38)

(*) As certified by the Management.(#) Excludes power consumed for Sugar Production.- Figures in brackets relate to previous year.

18. Segment information for the year ended 31st March 2010Rs. in Lacs

PARTICULARS 2009-10 2008-10Sugar Power Total Sugar Power Total

Revenue

External Sales 9,399.67 460.65 9,860.32 11,842.53 355.00 12,197.53

Internal Segment Sales - - - - - -

Total Sales 9,399.67 460.65 9,860.32 11,842.53 355.00 12,197.53

Other Income 94.73 - 94.73 185.12 - 185.12

Total Revenue 9,494.40 460.65 9,955.05 12,027.65 355.00 12,382.65

Results

Segment Result (PBIT) Profit/(Loss) 285.24 30.19 315.43 750.21 3.82 754.03

Less: Unallocable

expenditure net of

unallocable income 10.99 2.75

Less: Interest 574.54 887.80

Profit / (Loss) before

Exceptional Expenses (270.10) (136.52)

Provision for tax includingdeferred tax - (0.34)

Profit / (Loss) after tax (270.10) (136.86)

OTHER INFORMATION

Segment Assets 17,728.27 1,569.76 19,298.03 12,341.26 1,462.79 13,804.05

Unallocable Assets - 10.99

Total Assets 17,728.27 1,569.76 19,298.03 12,341.26 1,462.79 13,815.04

Segment Liabilities 16,676.80 188.81 16,865.61 10,633.42 361.00 10,994.42

Capital Expenditure 202.19 3.50 205.69 5.26 49.60 54.86

Depreciation 395.16 105.03 500.19 391.90 103.21 495.11

Non Cash item other

than Depreciation

Unallocable 10.99 2.75

Notes: Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17).

27

19. Particulars of Raw Materials and Stores and Spares consumed:

PARTICULARS 2009-10 2008-09Quantity (MT) Rs. in Lacs Quantity (MT) Rs. in Lacs

RAW MATERIALSSugar Cane 4,51,474 11,579.13 3,53,735 5,388.61Raw Sugar 5,200 1,454.68 - -Bagasse/Cane Trash/RiceHusk/Fire Wood - 27.93 - 12.79% of TotalImported - - - -Indigenous 100% 13,061.74 100% 5,401.40STORES AND SPARESImported - - - -Indigenous - 521.56 - 528.50% of TotalImported - - - -Indigenous 100% 521.56 100% 528.50

20. In view of inadequate available profits, required Debenture Redemption Reserve has not been created.

21. Previous year’s figures have been regrouped and / or rearranged wherever necessary.

As per our report of even date attached.

For S.S. KOTHARI MEHTA & CO.,

Chartered Accountants

Firm’s Registration No. 000756N

BHARAT HARI SINGHANIA Chairman

(CA ATUL SEKSARIA) P. K. JAIN

Partner GAUTAM KHATIAN

Membership No.: 86370 J. R. C. BHANDARI

VIKRAMPATI SINGHANIA

Place : New Delhi PUMIT KUMAR CHELLARAMANI A. K. KINRA

Dated : This the 15th day of May 2010. Company Secretary A. K. JAIN Directors

28

Cash flow statement as required by Accounting Standard on Cash flow statement AS-3 is as under:

Rs. in Lacs

2009-2010 2008-2009A . CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax and exceptional items (270.10) (136.52)

Adjustments for:

Depreciation 500.19 495.11Miscellaneous Expenditure written off 10.99 2.75Loss/(Profit) on Sale of Fixed Assets (Net) 0.08 15.28Interest Expenses 574.54 887.80Interest Income (6.64) (9.27)Operating Profit before working capital changes 809.06 1,255.15

Adjustments for:

(Increase)/Decrease in Trade and other receivables (127.87) 547.94(Increase)/Decrease in Inventories (5,616.13) 4,292.39Increase/(Decrease) in Trade payables 4,478.65 (1,198.80)Cash generated from operations (456.29) 4,896.68Direct taxes (paid)/Refund received (2.31) (9.25)Net Cash from operating activities (458.60) 4,887.43

B . CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (206.34) (91.44)Sale of Fixed Assets 0.65 10.59Interest Received 7.82 8.83Net Cash used in investing activities (197.87) (72.02)

C . CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings 2,978.85 (3,798.70)Repayment of borrowings (1,779.57) (352.04)Interest paid (449.41) (848.79)Net Cash used in financing activities 699.87 (4,999.53)

Net increase/(decrease) in cash and cash equivalents 43.40 (184.12)Cash and cash equivalents (Opening Balance) 131.36 315.48Cash and cash equivalents (Closing Balance) 174.76 131.36

Note:

Cash and Cash equivalents include:

- Cash, Cheques in hand 35.05 4.15- Balances with Banks 139.71 127.21Total 174.76 131.36

As per our report of even date attached.For S.S. KOTHARI MEHTA & CO.,Chartered Accountants

Firm’s Registration No. 000756NBHARAT HARI SINGHANIA Chairman

(CA ATUL SEKSARIA) P. K. JAINPartner GAUTAM KHATIANMembership No.: 86370 J. R. C. BHANDARI

VIKRAMPATI SINGHANIAPlace : New Delhi PUMIT KUMAR CHELLARAMANI A. K. KINRADated : This the 15th day of May 2010. Company Secretary A. K. JAIN Directors

29

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE AS PER PART IV OF SCHEDULE

VI TO THE COMPANIES ACT, 1956.

I . REGISTRATION DETAILSRegistration No. 79417State Code 21Balance Sheet Date 31.03.2010

I I . CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)Public Issue NilRight Issue NilPrivate Placement NilBonus Issue Nil

I I I . POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)Total Liabilities 19,87,391Total Assets 19,87,391

SOURCES OF FUNDSPaid-up Capital 2,38,596Reserves & Surplus 62,234Secured Loans 6,45,162Unsecured Loans 75,041

APPLICATION OF FUNDSNet Fixed Assets 7,61,866Investments -Net Current Assets 2,01,579Deferred Tax Assets 57,588Misc. Expenditure -Accumulated Losses -

IV. PERFORMANCE OF THE COMPANY (Amount in Rs. Thousands)Turnover including Other Income 9,95,505Total Expenditure 10,22,515Profit / (Loss) Before Tax (27,010)Profit / (Loss) After Tax (27,010)Earnings per Share (Rs.) (2.61)Dividend Rate (%) -

V. GENERIC NAME OF PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY(As per Monetary terms)

1. Item Code No. (ITC Code) 1701.11Sugar

2. Item Code No. (ITC Code) N.A.Power

BHARAT HARI SINGHANIA Chairman

P. K. JAIN

GAUTAM KHATIAN

J. R. C. BHANDARI

VIKRAMPATI SINGHANIA

Place : New Delhi PUMIT KUMAR CHELLARAMANI A. K. KINRA

Dated : This the 15th day of May 2010. Company Secretary A. K. JAIN Directors

JK SUGAR LTD.

A N N U A L R E P O R T 2 0 0 9 - 1 0