Dhampure Speciality Sugars Ltd

To

The Members,

Dhampure Speciality Sugars Limited

Your Directors have pleasure in presenting their Sixteenth Annual Report together with the Audited Statement of Accounts for the accounting year ended on 31st March,2008 for your consideration and adoption.

FINANCIAL RESULTS

The working results of the Company are briefly given below :

REVIEW AND PROSPECT

Company Produced 426 MT of Speciality Liquid Sugar during the year as against 512 MT in the previous year. Speciality dry value added Sugar produced 933 MT during the year against 480 MT in the previous year.

The Company has achieved a turnover of Rs.160695367 doing value addition of speciality sugars and chemicals during the year as against Rs. 161810419 in the previous year. The overall performance of the company resulting profit during the year. This was achieved by leveraging the brand value of the company, using strategic relationship with the customers and utilization of the logistics infrastructure of the Company.

The company has achieved significant success in exporting value added speciality sugars to a number of customers and many new countries. Your company has also achieved significant success in the field of E-commerce. Website, developed by the Company www.sugarindia.com, has achieved many international praises and a monthly viewership of half a million unique visitors.

Company has taken major strides in becoming leader in supplying speciality sugar products not only in India but also internationally. In the next stage of the same, we are in the process of achieving organic certification for many sugars.

At present, we are moving in the directions of developing wider product range of Speciality sugar by acquiring technical expertise or by using in house Research &Development. Some of these are Sugar Cane Juice, fancy sugar cubes, tetragon sugar sachets.

PUBLIC DEPOSIT

The Company has not accepted any deposits from the public during the financial year.

DIVIDEND

To conserve the resources, your Directors do not recommended any dividend on equity shares.

DIRECTORS

n I accordance with the Companies Act'1956 and articles of Association of the Company Mr. Gaurav Goel and Mr. Murli Manohar are retiring by rotation but being eligible, have offered themselves for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT PURSUANTTO SECTION 217 (2AA)OF THE COMPANIESACT, 1956

The Board of Directors of the Company confirms:

i. That in the preparation of the Annual Accounts, the applicable accounting standards have been followed and there has been no material departure;

ii. That the directors had selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company as at March 31, 2008 and of the profit & loss of the company for that period;

iii. That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the CompaniesAct, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. That the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

The disclosures as required under the Corporate Governance Reporting System have been furnished in the Annexure to the Directors Report under the head "Corporate Governance" and the company is complying with the various requirements under the new Corporate Governance Reporting System.

AUDITORS

M/s. S.Prasad Agarwal & Co., Chartered Accountants, the retiring statutory Auditors, being eligible, offers themselves for reappointment.They have confirmed that their reappointment if made would be within the limits in accordance with section 224(1 B) of the Companies Act ,1956.

THE PARTICULARSOF EMPLOYEES UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 — Nil(Previous year—Nil)

LISTING OF THE SHARES

Company's shares are listed at Bombay stock Exchange Ltd.and the listing fee for the year 2008-2009 has been paid to the stock exchange.

CONSERVATION OFENERGY,TECHNOLOGYABSORPTION,FOREIGNEXCHANGEEARNINGSAND OUTGO

The particulars required to be included in terms of Section 217 (1)(e) of the Companies Act,1956 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure.

AMALGAMATION

The amalgamation of the company with Dhampur Alco Chem Ltd is in process and pending with Hon'ble High Court of Allahabad.

EMPLOYEE RELATIONS

Employee relations remained cordial during the year under review.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the timely assistance and help extended by the Banks and Financial Institutions. The Board also wish to place on record the valuable contribution of all the officers, staff and workers in ensuring the smooth operations of the company.

Registered Office :

Village - Pallawala, Tehsil- Dhampur

Distt. - Bijnor (U.P.)

ANNEXURE TO DIRECTORS " REPOR T

PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

CONSERVATION OF ENERGY

a) Energy conservation measures taken :

The Company continues its efforts to improve methods of energy conservation and utilization.

b) Total energy consumption per unit of production is given as per Form- A enclosed.

FOREIGNEXCHANGEEARNINGANDOUTGO

The foreign exchange earned and outgoing during the year are outlined in Note No. 12 (G) & 12 (F) of Notes to Accounts of Schedule No. 14.

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATIONOF ENERGY

B. CONSUMPTION PER UNIT (M.T.) OF PRODUCTION

DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGYABSORPTION

RESEARCH AND DEVELOPMENT (R&D)

i. Specific areas in which R&D carried out by the Company :

a) Company developed automatic & standardized process o t produce and pack jaggery (Gur) under the brand name of Dhampure.

b) Company developed different types of Speciality Sugars Including Demerara Sugar, Natural Brown Sugar, Cane Syrup etc.

c) Company signed MOUs with various Technical Institutions of International repute for developing novel products.

d) Company offering several in- house developed technologies on lab scale, commercial scale & turnkey basis.

2. Benefits derived as a results of above R & D :

- Value addition of finished goods.

- Catering to an International market with quality products

- Helping India enhance its position in the global market.

3. Future plan of action:

The company is constantly trying to improve the product quality with reduction in per unit cost and development and evaluation of alternate raw materials. Overall enhancement of quality, development of international market and offering a range of novel health-friendly sugar products remains the objective.

4. Expenditure on R & D:

Expenditure made is non-allocable

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

1. Efforts made towards technology absorption, adoption and innovation:

- Technology to make free flow demerara sugar and packing in various pack sizes from 5 gms to 500 gms.

- Production of chemical free jaggery by retaining its natural health properties and taste appeal.

- Technology to develop new style of cost effective sugar sachets

- Technology to develop a refreshing & healthy sugarcane juice drink.

2. Benefit derived as a result of the above efforts:

- Increase in number of customers.

- Value addition of finished goods.

- Catering to the global market with quality products.

3. Imported Technology: Nil