Bajaj Hindusthan Ltd

Your Directors have pleasure in presenting their Seventy-Ninth annual report and theaudited statement of accounts for the financial year ended September 30, 2010.

Amalgamation of Bajaj Hindusthan Sugar and Industries Limited

The Scheme of Amalgamation of subsidiary Bajaj Hindusthan Sugar and Industries Limited(BHSIL) with the Company in terms of the provisions of Sections 391 to 394 of theCompanies Act, 1956 ("the Scheme") with the Appointed Date as April 01, 2010 wasunanimously approved by the Equity Shareholders, Secured and Unsecured Creditors of theCompany as well as BHSIL at their respective court convened meetings held on September 07,2010.

Subsequently, upon sanction of the Scheme vide Orders passed by Hon'ble High Court ofJudicature at Bombay on November 26, 2010 and completion of other formalities in thisregard on December 20, 2010 by both the Companies, the Scheme has become effective fromDecember 20, 2010. Consequently, the financial and operating results of BHSIL with effectfrom the Appointed Date of the Scheme being April 01, 2010 have been included with thefinancial results of the Company for the financial year ended on September 30, 2010 andhence are not strictly comparable with those of previous financial year 2008-09.

Financial Results

The summarised financial results of the Company for the year ended September 30, 2010are presented below:

On a stand-alone basis the Company achieved a turnover of Rs. 3,028.98 Crore ascompared to Rs. 1,814.89 Crore in the previous year. The Profit after tax stood at Rs.51.75 Crore as compared to the profit of Rs. 156.23 Crore in the previous year. Onconsolidated basis, the turnover is Rs. 3,340.68 Crore as compared to Rs. 2,333.52 Crorein the previous year. The Profit after tax and minority interest is Rs. 44.06 Crore ascompared to Rs. 61.78 Crore in the previous year.

Dividend

The Board of Directors of the Company recommend, for consideration of shareholders atthe 79th annual general meeting, payment of dividend of 70% (Re.0.70 per share) on equityshares of the face value of Re.1/- each for the year ended September 30, 2010. Thedividend paid during the previous year was

also 70%.

Operations

The merger of subsidiary BHSIL with the Company has further consolidated BHL'sleadership position in the Indian Sugar Industry. Post amalgamation the Company now hasfourteen Sugar Factories with an aggregate sugarcane crushing capacity of 1,36,000 TCD,six distilleries having capacity to produce Industrial Alcohol of 800 kilolitres per dayand Co-Generation plants having power generation capacity of 428 MW.

The operations during the financial year ended September 30, 2010 at all the fourteensugar mills of the Company, six distilleries and co-generation facilities weresatisfactory. Despite volatile conditions, the Company had achieved commendable resultsduring the year 2009-10.

Sugar

During the sugar season 2009-10, the sugarcane crop acreage reduced in U.P. primarilydue to deficient rainfall and relatively low sugar prices during the previous few sugarseasons. To meet the perceived shortfall in sugar production and with a view to optimiseits sugar production capacity utilisation, the Company had imported an aggregate of5,27,805 MT of raw sugar. However owing to a ban imposed in inward transportation ofimported raw sugar in the U.P state during the continuance of the sugarcane crushingseason, the Company could process only

3,27,062 MT of imported raw sugar during this season. The recovery of sugar fromsugarcane was higher at 9.24% as against 9.09% in the previous year owing to betterquality of sugarcane crop and certain other favourable factors. The Company produced anaggregate of 10,97,380 MT Sugar and 4,42,433 MT Molasses during the sugar season

2009-10.

Initial estimate of sugar production during the crushing season 2009-10 was around 14.7million tonnes against annual consumption of around 22 million tonnes due to which, theprices of sugar in the first half of the year upto February, 2010 remained high. Averagemonthly sugar prices were in the range of Rs. 2,950 to Rs. 3,800 per qtl. during thisperiod. However, as the Sugar price going high, with a view to check the inflation, theCentral Government imposed several restrictions such as fixing weekly restrictions onquantities to be sold and despatched, fixing stock limits not only for the trade but alsofor bulk consumers etc. At the same time, the production estimates also got revised andthe actual production was 18.7 million tonnes. These resulted in a sharp correction in,the sugar prices from around Rs. 32 per kg in March, 2010 to Rs. 26 per kg in September,

2010.

During the year the Company sold 9,26,966 MT of Sugar as against 6,72,180 MT during theprevious year, registering an increase of 38%. The Company also sold 54,602 MT of Molassesas against 71,120 MT in the previous year, reporting a downfall of 23% due to moremolasses used for production of Alcohol during the year.

Industrial Alcohol

The operations at all the six distilleries of the Company having an aggregateindustrial alcohol production capacity of 800 KL per day were satisfactory

During the year Industrial Alcohol / Ethanol production was higher at 94,719 KL ascompared to 32,070 KL in previous year recording a growth of 195%. Alcohol/ Ethanol salesduring the year were also higher at 63,123 KL as against 32,128 KL during the previousyear, reporting an increase of 96%.

Power

The operations of electric power generation were smooth at all of our fourteen sugarmills. While most of the power generated by us continued to be used captively for theoperational needs of the Company,

the surplus power is sold to the Uttar Pradesh State grid.

Power generation was higher at 4,48,901 MW as compared to 2,76,300 MW in previous yearrecording a growth of 62%, largely due to higher quantum of bagasse available from thecrushing of sugarcane.The average price at which we sold our surplus power wasapproximately Rs.3,978 per 1000 Units. The Company exported 1,30,635 MW of power duringthe year as against 73,271 MW during the previous year, reporting an increase of 78%.

Allotment of Equity Shares to Promoter upon exercise of option on Warrants allotted onpreferential basis

During the year the promoters exercised their option on 1,45,00,000 Equity Warrantsallotted on preferential basis during the last year. The Company has received an aggregatesum of Rs.56.70 Crore equivalent to the balance 75% of the total subscription amount onthe aforesaid warrants and have allotted 1,45,00,000 fully paid-up equity shares of Re.1/-each on January 04, 2010.

Post issue of 1,45,00,000 equity shares to the Promoter group, the paid-up equity sharecapital of the Company has increased from Rs. 17,68,57,111 to Rs. 19,13,57,111 dividedinto 19,13,57,111 equity shares of face value Re. 1/- each. The net proceeds from thepreferential issue were utilised in full for repayment/ prepayment of working capitalloans in accordance with the terms of the issue.

Equity Shares to be allotted pursuant to the sanctioned Scheme of Amalgamation

Pursuant to the Scheme of Amalgamation of BHSIL with BHL (the Scheme) sanctioned by theHon'ble Bombay High Court, the Company will be required to allot an aggregate of3,70,00,000 fully paid up equity shares of Re.1 each. These include an aggregate of3,11,00,000 shares to be allotted to the BHL Securities Trust formed for the purposetowards non-cancellation of cross holding of 75% equity in BHSIL and principal value ofloan of Rs. 335 Crore, in accordance with the terms of the Scheme. Post allotment of theaforesaid shares, the paid-up equity share capital of the Company will increase toRs.22,83,57,111.

Listing of Securities

The Company's equity shares are listed on the Bombay Stock Exchange Limited and TheNational Stock Exchange of India Limited. The Annual Listing fees to each of these StockExchanges have been paid by the Company. The Global Depository Receipts (GDRs) and ForeignCurrency Convertible Bonds (FCCBs) are listed on the Luxembourg Stock Exchange and LondonStock Exchange respectively.

Employee Stock Option

Bajaj Hindusthan Limited did not have a stock option plan. In terms of scheme ofamalgamation, the outstanding options under PSIL Employees Stock Option Plan, 2006 held bythe eligible employees of group companies have been transferred. Since under the Plan,BHSIL had already allotted 8.89 Crore shares to a trust, the corresponding number ofequity shares in the exchange ratio of 1:5 will be allotted to the trust. The entitlementof the option granted stands changed from 10 equity shares of face value of Re. 1/- eachof BHSIL to 2 equity shares of face value of Re.1/- each of BHL.

The information required to be disclosed in terms of the provisions of the SEBI(Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 isenclosed as per Annexure II to this report.

Modification of Boilers for use of alternate fuel

The conversion of Bagasse fired Boiler into Multi-fuel Boiler at our Gangnauli, Kinauni& Maqsoodapur Sugar Units has been completed and put in operations successfully. Nowwe have option to run the Boiler on alternate fuels i.e. with Coal separately, withBagasse separately and jointly with Bagasse & Coal as a fuel for the purpose of PowerExport. We have also run the Boiler on coal as a fuel for Re-processing of Raw Sugar withPower Export to Grid during off season.

New Coal-fired Power Plants

Sugar Industry in India of late has witnessed an intense volatility in sugar prices.Considering the cyclical nature of industry the Company constantly endeavours to evolve abusiness model that can insulate itself from the vagaries of cyclicality of sugarbusiness. Since the year 2003, the Company had expanded its sugar capacity rapidly from24,000 TCD to the present capacity of 1,36,000 TCD. With no immediate plans for furtherexpansion in sugar capacity, various opportunities for diversification were beingexplored.

The Power Industry in India (including in the State of Uttar Pradesh) has beenhistorically characterised by energy shortages as the gap between demand and supply ofpower has been increasing. U.P. Government has also announced U.P. Energy Policy 2009inviting private participation in the power sector to generate over 32,000 MW of power by2014. The Company has been in the business of power generation through the co-generationbagasse fired power generation plants located at all of its sugar units of which majorpart, around 75%-80% was used for captive purpose and surplus sold to the Uttar PradeshGovernment.

Considering the Company's experience in power generation and tremendous scope forgrowth of power and energy business, the Company has considered diversifying into powersector by setting up coal fired thermal power plants (TPP) in the state of Uttar Pradesh.To begin with the Company plans to set up around 4,500 MW of Power Generating Capacity.

Phase I - 450 MW

In the first phase, the Company had commenced project for an aggregate power generatingcapacity of 400 MW comprising of 80 MW thermal power plants at five locations on theunused land available in the vicinity of the sugar mills of the Company at Khamberkhera,Barkhera, Maqsoodapur, Kundarkhi and Utraula all located in the State of Uttar Pradesh.Subsequently the capacity of these thermal power plants were upwardly revised to 450 MW(90 MW x 5). The project cost was estimated at around Rs. 2,320 Crore to be funded by wayof debt to equity mix of 3:1.

The requisite Memorandum of Understanding and Power Purchase Agreement for these fivecoal based thermal power plants have been executed with the Government of Uttar Pradesh.EPC contracts and order for all the major machinery and equipments required for thesepower plants have been placed. The process of various environment and water

clearances and other approval including coal linkages are at an advance stage.

As advised by the consortium of lenders and primarily considering the variance inparameters for debt-equity ratio for extending the projects fund to a power sector companyvis-a-vis a sugar company, it was decided to develop this 450 MW TPP through an SPV. Theunder construction power plants were assigned/transferred to Bajaj Energy Private Limited(BEnPL), a subsidiary of the Company.

The financial closure of Rs. 1,740 Crore for the debt portion for this the project hasbeen achieved. More than half of the equity component of project funding has already beenprovided jointly by the Company and an entity belonging to its promoter group. Thecommercial operation of power plants at these five locations is expected to commence asthe schedule within next eight to ten months.

Phase II - 1,980 MW at Lalitpur

The Company was awarded 1,980 MW (3X660 MW) ultra mega thermal power project atLalitpur, Uttar Pradesh. This project is proposed to be implemented through Lalitpur PowerGeneration Company Limited (LPGCL), a SPV created for this purpose by the Government ofU.P. The approximate cost of project is estimated at around Rs. 12,000 Crore. The Companyhad entered into a Memorandum of Understanding (MOU) with Government of Uttar Pradesh andhave acquired LPGCL from UPPCL to make it a subsidiary of the Company with effect fromDecember 10, 2010.

The acquisition of land for the power plant is in progress. Necessary application forcoal linkage and processes of obtaining clearance for use of underground water,environmental and other clearance from relevant authorities are in progress. Thediscussions for appointing agency for financial closure for the projects have beeninitiated. The commercial operation of these power plants at Lalitpur is expected tocommence around 4 to 5 years.

Phase III - 1,980 MW at Bargarh

The Company has also been awarded another 1,980 MW (3 x 660 MW) ultra mega thermalpower project at Bargarh, district Chitrakoot, Uttar Pradesh. The cost of project isestimated at around Rs. 12,000 Crore. A Memorandum of Understanding has been executed withGovernment of Uttar Pradesh in this regard. The Bargarh TPP shall be implemented throughanother

SPV - Bajaj Power Generation Private Limited (BPGPL), a subsidiary of the Company.

As per the terms and conditions stipulated by the Government of Uttar Pradesh, theCompany is obligated to hold atleast 26% of the equity of all the above three SPVs andshall be jointly responsible with these SPVs for implementing the respective MOU. TheCompany expects to complete all the above projects as per the respective schedule. Thediversification in Power Business is expected to provide the Company with the ability toperform optimally during all phases of the sugar business cycle and achieve steady cashflows to mitigate the adverse effect of cyclicality.

Bio-Gas/Power from Press Mud

In addition to the Bagasse and Molasses, the sugar mill operations also generatesufficient amount of Press mud (approximately 4% of cane crushed). At six out of fourteenunits of the Group, Distilleries are attached to the Sugar Plant. In these cases, suchPress mud is partly utilised gainfully in compost making with bio-methanated effluent forDistilleries to accomplish Zero Discharge and rest is sold at very nominal price. At otherlocations the entire quantity is sold at nominal prices. The Company has at timeexperienced great difficulty for disposal of the Press mud.

With around 30-35% biomass content, Press mud has the potential to be converted intobiogas through anaerobically. Keeping above in consideration and also in order to utilisethe Press mud valuably the Company has actively considered tapping renewable energy fromindustrial waste. It was considered desirable to utilise the surplus Press mud generatedin the Sugar Units which do not have a distillery attached by gainfully converted it intobiogas which in turn can also be consumed advantageously in power generation through GasEngine. This is expected to create a win-win situation by resolving Press mud disposaldifficulty on one hand and conserve the environment through utilisation of industrialwaste in addition to becoming a source to generate income. The Cost of Setting up theproject is approx Rs.16 Crores for each of the locations.

Management Discussion and Analysis

Management Discussion and Analysis Report is presented in a separate section formingpart of this Annual Report.

Bajaj Hindusthan Sugar and Industries Limited (since merged with BHL)

During the year Bajaj Hindusthan Sugar and Industries Limited (BHSIL), a 75% subsidiaryof the Company has ceased to be a subsidiary of the Company pursuant to the Scheme ofAmalgamation of BHSIL with the Company with effect from April 1, 2010 fixed as AppointedDate.

The Order sanctioning the Scheme was passed by the Hon'ble High Court of Bombay onNovember 26, 2010. Upon accomplishment of the applicable formalities under the law, theScheme has come into effect from December 20, 2010 and BHSIL stood dissolved withoutwinding up. The effect of the amalgamation has been given in the books of accounts of theCompany for the year ended on September 30, 2010 with effect from the Appointed Date.

Bajaj Eco-Tec Products Limited

Bajaj Eco-Tec Products Limited (BEPL) is a Wholly Owned Subsidiary of Bajaj HindusthanLimited engaged in manufacture of Medium Density Fibre (MDF) boards and Particle boardsfrom sugarcane bagasse.

During the financial year ended March 31, 2010 BEPL recorded a turnover (sales andother income) of Rs. 1 54.63 Crore as against Rs.59.48 Crore during the previous year. TheNet Loss after Tax for the year was reduced to Rs. 50.57 Crore as against Rs. 73.95 Crorerecorded during the previous year.

Bajaj Aviation Private Limited

Bajaj Aviation Private Limited (BAPL), is a Wholly Owned Subsidiary of Bajaj Eco-TecProducts Limited and therefore is a subsidiary of the Company. During the year endedSeptember 30, 2010, it generated an income of Rs.1.76 Crore and posted Profit aftertaxation of Rs.0.67 Crore.

Bajaj Energy Private Limited (BEnPL) (formerly Bajaj Eco-Chem Products Private Limited)

During the year the proposed plans of carrying on the business of manufacture and saleof specialty chemicals through this subsidiary were abandoned. The entire pre-operativeexpenditure aggregating to Rs. 0.63 Crore on the aforesaid project has since been writtenoff. The holding company - BHL had decided during the year to diversify into thermal powersector

and this Subsidiary was proposed to be used as SPV for its initial foray in powersector by setting up five thermal power projects of 90 MW each aggregating to 450 MWinvolving an estimated project cost of Rs. 2,320 Crore.

The name of the Company was therefore changed from Bajaj Eco-Chem Products PrivateLimited to Bajaj Energy Private Limited with effect from March 19, 2010.

After obtaining approval of Government of Uttar Pradesh, these five under constructionpower projects were assigned to be developed by Bajaj Energy Private Limited. As per theterms and conditions stipulated by the Government of U.P., BHL is obligated to hold 26% ofthe equity of this SPV. Also BHL and this SPV shall have the joint responsibility forsetting up these projects.

The project has been appraised by SBICAP Trustee Company Limited on behalf of aconsortium of lenders and financial closure for debt aggregating to Rs. 1,740 Crore hasbeen achieved. The equity requirement for the project has been estimated at Rs. 580 Crore.Till date, BHL has subscribed equity to the tune of Rs. 137.81 Crore and Rs. 149.88 Crorehas been subscribed by an entity belonging to the promoters of BHL. Resultantly, theshareholding of BHL has come down from 100% to 51% of the paid up capital of BEnPL witheffect from September 24, 2010.

The commercial operations for all these five power plants are expected to commence asper the schedule within next eight to ten months.

Bajaj Internacional Participates Limitada (Subsidiary in Brazil)

During the year too, no business as envisaged to be undertaken through this WhollyOwned Subsidiary (WOS) in Brazil could be commenced. The amount invested by the Companyhad remained deployed in Bank Deposits. Since the company did not see any opportunity ofcommencing business soon, the process of its winding up and repatriation of capital hasbeen initiated.

Bajaj Hindusthan (Singapore) Private Limited

During the year Bajaj Hindusthan (Singapore) Pte. Ltd, a Wholly Owned Subsidiary of theCompany in Singapore decided to commence operations of Trading in Commodities like Sugar,Coal etc. The Company also plans to acquire a Coal Mine located in Indonesia.

To meet the fund requirements of its business, BHL has further invested a sum of US$ 27Million equivalent to Rs. 92.31 Crore in this subsidiary.

The financial year of this subsidiary has been changed from October-September period toApril-March period with effect from March 31, 2010. No business operations has beencommenced upto March 31, 2010. With the aggregate expenditure during the period amountingto Rs. 0.03 Crore, the net loss for the period was Rs. 0.03 Crore and accumulated carriedforward loss upto March 31, 2010 is Rs. 0.12 Crore.

Consolidated Financial Statements

In compliance with Accounting Standards 21, 23 and 27 of Companies (AccountingStandards) Rules, 2006 and pursuant to the Listing Agreement with the Stock Exchanges, theConsolidated Financial Statements form part of this Annual Report.

Subsidiaries

As per the provisions of Section 212 of the Companies Act, 1956, the Directors' Report,Balance Sheet and Profit and Loss Account of the subsidiary companies are required to beattached with the Balance Sheet of a company. However, in terms of approval granted underSection 212(8) of the Companies Act, 1956 by the Ministry of Corporate Affairs, Governmentof India vide its letter No.47/652/2010-CL-III dated 29-07-2010, the Company has beenexempted from complying with the provisions contained in sub-section (1) of Section 212 ofthe Companies Act, 1956 in respect of its following subsidiaries, viz:-

1. Bajaj Eco-Tec Products Limited

2. Bajaj Aviation Private Limited

3. Bajaj Internacional Participates Ltda. (Brazilian subsidiary)

4. Bajaj Hindusthan (Singapore) Pvt. Ltd. (Singapore subsidiary)

5. Bajaj Energy Private Limited

As directed by the Ministry of Corporate Affairs, certain key information has beendisclosed in an Annexure to the Consolidated Accounts forming part of this Annual Report.

The Company undertakes that the annual accounts

of the subsidiary companies and the related detailed information will be made availableto the investors of the Company and its subsidiary companies seeking such information atany point of time. The annual accounts of the subsidiary companies will also be kept forinspection by any investor at the registered office and head office of the Company andthose of its subsidiaries. The annual accounts and the details of accounts of all itssubsidiary companies shall be put on the Company's website - www.bajajhindusthan.com. Thehard copy of the same will be furnished to any shareholder on a written demand received inthis regard.

Group

Pursuant to an intimation from the Promoters, the names of the Promoters and entitiescomprising "group" as defined under the Monopolies and Restrictive TradePractices ("MRTP") Act, 1969 are disclosed in the Annual Report for the purposeof the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Directors

Mr. D.S. Mehta (DIN 00038366) and Mr. M. L. Apte (DIN 00003656), Directors of theCompany, will retire by rotation and being eligible, offer themselves for re-appointment.All the appointments of the Directors of the Company are in compliance with the provisionsof Section 274 (1)(g) of the Companies Act, 1956.

Directors' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, as amended,with respect to the directors' responsibility statement, it is hereby confirmed:

(i) that in preparation of accounts for the financial year ended September 30, 2010,the applicable accounting standards have been followed along with proper explanationrelating to the material departures;

(ii) that the directors of the Company have selected such accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give

a true and fair view of the state of affairs of the Company as at September 30, 2010and of the profit of the Company for the year ended September 30, 2010;

(iii) that the directors of the Company have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; and

(iv) that the directors of the Company have prepared the accounts of the Company forthe financial year ended September 30, 2010 on a going concern basis.

Auditors and Auditors' Report

M/s. Chaturvedi & Shah, Chartered Accountants, existing Statutory Auditors willretire at the conclusion of the ensuing (79th) Annual General Meeting and seekre-appointment as Statutory Auditors of the Company at the ensuing Annual General Meeting.

The Company has received certificate from M/s. Chaturvedi & Shah to the effect thattheir appointment, if made, would be within the limits prescribed under Section 224(1B) ofthe Companies Act, 1956.

The Board of Directors recommends to the shareholders the appointment of M/s.Chaturvedi & Shah as Auditors of the Company.

The observations and comments given in the report of the Auditors read together withnotes to accounts are self explanatory and hence do not call for any further informationand explanation under Section 217(3) of the Companies Act, 1956.

International Accountants

M/s. B S R & Company, Chartered Accountants, appointed as International Accountantsof the Company have submitted the report on the Company's Consolidated Financial Statementto the Board of Directors for the year under review and the same forms a part of thisreport for the information of members.

Cost Auditors

The Central Government has directed an audit of the cost accounts maintained by theCompany in respect of sugar and industrial alcohol businesses. For conducting the costaudit for these businesses for the financial year ended September 30, 2010, the CentralGovernment has approved the appointment of M/s. B.J.D. Nanabhoy & Co., CostAccountants, Mumbai.

Particulars of employees

As required under the provision of Section 217 (2A) of the Companies Act, 1956 readwith the Companies (Particulars of Employees) Rules, 1975 as amended, particulars ofemployees are set out in the Annexure- III and forms part of this report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, theAnnual Report excluding the aforesaid information is being sent to all the members of theCompany and others entitled thereto. Any member interested in obtaining such particularsmay write to the Company Secretary at the registered office of the Company.

Transfer of amounts to Investor Education and Protection Fund

The amounts of dividend, interest on debenture and matured debentures, interest onfixed deposits and matured fixed deposits, etc. which has remained unpaid or unclaimed for7 years have been transferred to the Investor Education and Protection Fund within timestipulated by law on respective due dates in accordance with the provisions of Section205C of the CompaniesAct, 1956.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The relevant data regarding the above is given in the Annexure-I hereto and forms partof this report.

Corporate Governance

The Company has vigorously striven to follow the best corporate governance practicesaimed at building trust among the key stakeholders, shareholders, employees, customers,suppliers (including farmers) and other stakeholders on four key elements of corporategovernance - transparency, fairness, disclosure and accountability.

Acknowledgements

Industrial relations have been cordial at all the plants of the Company.

The Directors express their appreciation for the sincere co-operation and assistance ofCentral and State Government authorities, bankers, customers and suppliers and businessassociates. Your Directors also wish to place on record their deep sense of appreciationfor the committed services by your Company's employees. Your Directors acknowledge withgratitude the encouragement and support extended by our valued shareholders.

For and on behalf of the Board of Directors

A. Conservation of energy

1. 'CIGAR' installed to ensure recovery of waste heat from flash vapours.

2. Installation of Plate Heat Exchanger (PHE) for recovery of heat from Exhaustcondensate.

3. Installation of Direct Contact Heater (DCH) for syrup heating with Vapour CorrosionInhabitors (VCI) vapours. The said vapour is used for raw juice heating, pan washing andsent to boiler as feed water.

4. Drains of exhaust and live steam collected in a vessel and sent to boiler as feedwater.

5. Use of Palia design molasses cooler to bring down final molasses temperaturereceived from process.

6. Automation of superheating control system.

7. Upgradation of automation at boiler to improve efficiencies.

8. Use of blow down flash steam for heating of makeup water.

9. Use of vapour cell condensate for super heated wash water for 'A' centrifugals.

10. Recovery of heat from Semi Kestner and Vapour Cell by providing flash connectionfrom condensate bottles to successive vapour pipes.

11. Elimination of 'C' of massecuite pumping. A, B, C are types of massecuite pumping.

12. Installation of auto shut off system for under ground water reservoir pumps.

13. Installation of system for re-use of pan body testing water.

14. Excess hot water is given to Bio-Digestor to dilute the feed and heat the sameinstead of by steam.

15. During off-season raw sugar reprocessing is done by the help of water boiling atevaporator set and condensate is supplied to Boiler to get the better efficiency.

16. Reduction / Elimination of use of High Pressure steam for process.

17. Use of low grade vapour for Pan Boiling by employing Mechanical Circulator.

18. Recovery of waste heat from the clarifier flash tank.

19. Installed Spray Engineering Device make auto system to reduce Power consumption byreduction of injection water.

20. Soda boiling in evaporator bodies by exhaust steam instead of live steam.

21. Use of molasses coolers to cool down fluid molasses before storage.

22. 100% lagging of steam carrying lines to minimize heat loss.

23. 4 x 90 Ton Per Hour 45Kg/cm2 Super Heated temp. 4250C Boilers are installed.

24. 4 Nos. Power Turbine (One No. 15 MW Back pressure with High Tension Alternator Set,One No. 10 MW Back pressure with High Tension Alternator Set, One No. 3 MW Back pressurewith Low Tension Alternator Set & One No. 15 MW Condensing cum Extraction with HighTension Alternator Set) are installed.

25. Variable DC Drive motors are installed for Milling Tandem in the Mill for betterefficiency.

26. Variable Frequency Drive are installed at boiler and mill bagasse feeder forreduction of power consumption.

27. Automation through Data Control System at Milling & Boiler plant to reducepower consumption.

28. High Pressure (H.P) Sodium vapour lamp/Compact Fluorescent lamp/Tube Light havebeen fitted to reduce power consumption.

29. Additional power capacitor was installed in the power house & all Motor ControlCentre room with Power Control Centre to increase power factor to reduce powerconsumption.

B. Technology absorption

Efforts made in technology absorption are given in prescribed Form B attached.

C. Foreign exchange earnings and outgo

a) Activities relating to exports; initiative taken to increase exports; development ofnew export markets for products and services; and export plans:

None

b) Total foreign exchange used and earned.

Form-A

Disclosure of particulars with respect to conservation of energy (to the extentapplicable)

Form-B

Disclosure of particulars with respect to technology absorption (to the extentapplicable)

A. Research and Development (R&D)

Under Sugarcane Research & Development, the activities of 2009-2010 wereaccelerated as under:

1. Specific areas in which R&D is carried out by the Company

1. Use of bio-compost and mycorrhiza to promote Integrated Nutrient Management in thearea.

2. Trial of effectiveness of the new insecticides & pesticides introduced byvarious pesticide companies before recommendation to the farmers. Use of neem-cake topromote Integrated Pest Management. Promoted more use of organic manure (Bajaj Jaivik) inorder to improve the health of soil.

3. Conducting trials for yield enhancement in farmers fields.

4. Replacement of old/rejected varieties of seed with new/improved varieties in floodaffected areas.

5. Installation of system of recirculation of mill roller bearing.

6. Adoption of new plantation technique Bud Chip method.

7. Space row planting in place of traditional method of sowing at 3 feet distance.

8. Manure and fertilisers management of sugar cane crop.

9. Use of Drip Irrigation system.

10. Utilisation of Filtrate/Melt/Syrup clarification.

11. Mechanization of sugarcane planting intercultural operations and fertiliserapplication.

12. Installation of efficient lime classifier.

13. Modifications in Pan save all, bottom plate of auxiliary cane carrier, Anvil plate,Donally chute, imbibitions juice line, bagasse belt conveyor and last mill dischargechute.

14. Installation of stand by oil cooler.

15. Extensive use of bio-fertiliser which included PSB (Phosphate SolubilizingBacteria) culture, Rhizobium & Azotobactor culture was done in the area to maintainsoil fertility & increase productivity.

16. Nucleus Seed of new promising varieties was procured from various research stationsand provided to farmers for further propagation.

17. Adoption of agronomical packages, practices and Trench, Autumn planting atMaqsoodapur unit.

18. Installation of system of recirculation of mill roller bearing and rubber juicering on roller shafts journal.

19. Automation of anti Foam dosing in fermentation.

20. Intercropping of sugar cane with potato, lahi, masur.

21. Installation of Bio-Gas Plant and High COD spent wash feeded to reactors.

2. Benefits derived as a result of above R&D

1. Use of bio-compost and mycorrhiza will reduce the dose of chemical fertilizers andhelp maintaining the soil fertility as well as meet requirement of major micro-nutrients.

2. Biological control of some of the pests and insects has helped in saving the cost ofinsecticides thus reducing the cost of cultivation and producing healthy disease free caneand improved soil health.

3. Improvement in farm income for the farmers which will discourage them to switch overto alternate crops.

4. Introduction of promising varieties will result in improved sugar recovery fromcane.

5. Boiling of A1 massecuite resulted in quality improvement & loss reduction.

6. To reduce oil consumption, leakage of juice to oil and pollution hazards.

7. By adopting Bud chip technique there is a saving of seed quantity and fastmultiplication of high sugar and high early maturing varieties and also replacement of olddeteriorating varieties to help in maintaining the proper varietals balance.

8. Increase in average yield of the area resulting in increase in availability of sugarcane to the mill.

9. Condensate available from the water boiling during off-season helps us to reduce therequirement of make up De-Mineralized water and save the energy.

10. Manure and fertilisers management has increased the use of bio compost which helpsin maintaining the soil health and has direct impact on cane yields.

11. Drip irrigation has helped in conservation of water and reduced cost of irrigation.

12. Reduction of sulpher consumption and improvement of quality and recovery of sugar.

13. Number of farmers adopted improved cultural practices as a result of extensionservices by the Company.

14. Reduction of lime consumption.

15. To reduce the consumption of anti foam.

16. Reduction of cost of cultivation to farmers resulting encouragement to sugar canecrop.

17. Installation of Bio-Gas Plant has resulted into higher Gas production.

3. Future plan of actions

1. To optimise varietal balance for ensuring continued improvement in sugar recovery.

2. Use of integrated pests & insects management system (IPMS).

3. Stress on autumn planting in order to reduce the losses caused by floods in rainyseason.

4. Promoting extensive use of bio-manure/organic manure in place of fertilisers.

5. Demonstration of different scientific practices of cane cultivation in our factoryzones.

6. Promoting better ratoon management practices & multiple rationing to increasecane yield from ratoons also.

7. Accelerating projects for rain water harvesting in the plants with the availablefacilities.

8. Educate farmers to adopt technical knowhow to increase further productivity.

9. Technology development for low-lying water logged area.

10. Further mechanisation of sugarcane planting, inter-culture operations andfertiliser application.

11. Development of drainage system for draining of rain and flood water.

12. Reduction in Transportation cost of cane by increasing cane intensity in the Gatearea.

13. Promoting more use of organic manure (Bajaj Jaivik) for improving the fertilitystatus of soil.

14. We are planning to use Hand Held Terminals at out centres in coming season 2010-11.

15. Implementation of the S.M.S system to inform the farmers for their indent slips andcane payments etc.

16. Usage of soft water for cooling water for turbine oil.

17. Wide row cane planting for water conservation.

18. Alternate fertilisers usage in place of Phosphate fertilisers.

19. Mould Board plough (for deep cultivation), Rotavator (for trash mulching) etc. toease the agricultural operations as well as help in increasing the productivity.