KRBL Ltd

Dear Shareholders

Your Directors take pleasure in presenting their 17th Annual Report together with thestandalone and consolidated Audited Accounts of the Company for the financial year ended31st March, 2010.

1. FINANCIAL PERFORMANCE

(Rs. In lakh)

YOUR COMPANY ACHIEVES NEWER HEIGHTS IN THE FINANCIALYEAR UNDER REVIEW

3 On Standalone basis, Company's total revenue increased to Rs.1,58,295 lakh as on 31stMarch,2010 from Rs.1,24,751 lakh as on 31st March,2009,registering a growth of 26.89%. Theprofit before tax increased to Rs.13,255 lakh (8.39% of Net Sales) as on 31st March,2010from Rs.7,301 lakh (5.86% of Net Sales) as on 31st March, 2009 registering a growth of81.55%. The profit after tax increased to Rs.10,712 lakh (6.78% of Net Sales) as on 31stMarch, 2010 from Rs. 4,634 lakh (3.72 % of Net Sales) as on 31st March, 2009 registering agrowth of 131.16%.

3 On Consolidated basis,Company's total revenue increased to Rs.1,60,065 lakh as on31st March,2010 from Rs.1,32,119 lakh as on 31st March,2009,registering a growth of21.15%. The profit before tax increased to Rs.14,998 lakh (9.50% of Net Sales) as on 31stMarch, 2010 from Rs.9,209 lakh (7.02 % of Net Sales) as on 31st March,2009 registering agrowth of 62.86%. The profit after tax increased to Rs.12,455 lakh (7.89% of Net Sales) ason 31st March, 2010 from Rs.6,542 lakh (4.99 % of Net Sales) as on 31st March, 2009registering a growth of 90.39%.

2. TRANSFER TO RESERVES

Your Company proposes to transfer Rs.15 Crore to General Reserve out of the amountavailable for appropriations and an amount of Rs. 318.32 Crore is proposed to be carriedover to Balance Sheet.

3. SUB –DIVISION OF EQUITY SHARES

During the year under review your directors in their meeting held on 17th December,2009 recommended the sub-division of shares from Rs.10/- to Re.1/- and same has beenapproved by the shareholders through postal ballot dated 25th January, 2010.The NSDL &CDSL issue new ISIN for equity shares and the new ISIN is INE001B01026.

4. DIVIDEND

The Board of Directors in their meeting held on 28th January, 2010 declared an interimdividend and on 22nd May, 2010 declared final dividend for the year ended on 31st March,2010 on Ordinary Shares as under:-

Thus the total outgo on account of both interim dividend and final dividend includingdividend tax will be Rs. 8,53,28,644/- (Previous year Rs.5,68,85,763/-), which represents7.97% of the profit after tax (Previous year 12.29%).

The interim dividend has been paid to those shareholder whose name was appearing on theregister of members as on the record date i.e. 12th February, 2010. The final divided, ifapproved, will be paid within 30 days of declaration:

(i) to those members, holding shares in physical form, whose names appear on theRegister of Members of the Company at the close of business hours on 15th September, 2010,after giving effect to all valid transfers in physical form lodged with the Company or itsRegistrar and Shares Transfer Agent on or before 15th September, 2010; and

(ii) to those beneficial owners, holding shares in electronic form, whose names appearin the statement of beneficial owners furnished by the Depositories to the Company as atclose of business hour on 15th September, 2010.

5. TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND

In terms of Section 205A (5) and 205C of the Companies Act,1956,the Company hasdeposited Rs.3,55,190/- during the year being the unclaimed dividend for the year 2001-02in the "Investor Education and Protection Fund" established by the CentralGovernment.

6. ACCOUNTS & AUDIT

The Directors of the view that the notes appended to the accounts and referred to bythe auditors in their report are self explanatory and do not require elucidation.

7. SEGMENT REPORTING

A separate reportable segment forms part of Notes to the Accounts.

8. CASH FLOW ANALYSIS

The Cash Flow Statement for the year, under reference in terms of Clause 32 of theListing Agreement entered by the Company with the Stock Exchanges, is annexed with theAnnual Accounts of the Company.

9. SUBSIDIARY COMPANY

Company has a 100% subsidiary namely KRBL DMCC in Dubai. The audited annual accountsfor the period ended 31st March, 2010 along with the Directors’ and Auditors’Report are attached with the Annual Report as per the requirement of Section 212 of theCompanies Act, 1956. During the Year Trading License has been renewed by DMCC and a freshLicense was issued. Mr. Anoop Kumar Gupta, Director of the Company has been named asManager in the Trading License.In the financial year under review the net profit of thecompany was Rs. 17.43 Crore (Previous Year Rs. 19.08 Crore)

10. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statementsread with Accounting Standard AS-23 on Accounting for investment in Associates, yourDirectors provide the audited Consolidated Financial Statements in the Annual Report.

11. AUDITORS

M/s.Vinod Kumar Bindal & Co., Chartered Accountants, Delhi, the statutory auditorsof the Company are the retiring auditors and being eligible, offers themselves forre-appointment. The Certificate u/s 224(1B) of the Companies Act, 1956 has been obtainedfrom them.Your directors recommend their re-appointment and they are not disqualified forsuch appointment/reappointment within the meaning of Section 226 of the said Act.

12. PUBLIC DEPOSITS

The Company has not accepted any deposits from public within the meaning of Section 58Aand 58AA of the Companies Act, 1956, and the Companies (Acceptance of Deposit) Rules,1975, during the year under review.

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of energy conservation and research and development activities undertaken bythe company along with the information in accordance with the provision of section217(1)(e) of the companies Act,1956,read with the companies (Disclosure of Particulars inthe Report of the Board of Directors) Rules,1988,are given in Annexure‘A’to theDirectors’ Report.

14. RATINGS

During the year under review, the Company received various ratings, which are asfollows:

3 In January 2010,"CRISIL" has conducted the "Independent EquityResearch" and assigned 3/5 on fundamentals and 5/5 on valuations.CRISIL assignsfundamental grade of 3/5 i.e. "Good" to the company against other listed peerson account of its established brand presence, anticipated strong revenue growth, expectedROE expansion and strong position in the market. The valuation grade of 5/5 indicates thatthe stock has "Strong Upside" to the current market price;

3 In December 2009,"ICRA" upgrades long term rating for bank facilities toLA+;reaffirms A1 rating for bank facilities; and

3 In December 2009, "ICRA" has also assigned rating of A1+(s) (pronounced asA one plus S) for commercial paper (CP).

15. DIRECTORS

In accordance with the provisions of section 255 of the Companies Act, 1956 and Article89 of the Articles of Association of the Company,Dr.N.K.Gupta and Mr.Gautam Khaitan retireby rotation at the forthcoming Annual General Meeting and,being eligible,offers themselvesfor re-appointment. Your Directors recommend their reappointment.

Brief resume of Directors proposed to be appointed/ re-appointed, nature of theirexpertise in specific functional areas and names of companies in which they holddirectorships and memberships/chairmanships of Board Committees, as stipulated underClause 49 of the Listing

Agreement with Stock Exchanges are provided in the Report on Corporate Governanceforming part of the Annual Report.

16. PERSONNEL

During the year under review, no employees, whether employed for the whole or part ofthe year, was drawing remuneration exceeding the limits as laid down u/s. 217 (2A) of theCompanies Act, 1956, read with Companies (Particulars of Employees) Rules,1975 asamended.Hence the details required under Section 217 (2A) are not given.

17. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directorsconfirms;

i. that in the preparation of the annual accounts, the applicable accounting standardshave been followed and that there are no material departures;

ii. that the selected accounting policies applied consistently and the Directors madejudgments were estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March, 2010 and of the profits ofthe Company for that period;

iii. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act,1956 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

iv. that the directors have prepared the annual accounts on a going concern basis.

18. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement entered by the Company with the StockExchanges,a separate section titled `Report on Corporate Governance’ has beenincluded in this Annual Report along with the Certificate on its compliance.

19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations, performance and future outlook of the company is givenseparately under the head "Management Discussion and Analysis Report" asstipulated under clause 49 of the Listing Agreement with the stock exchanges.

20. DEPOSITORY SYSTEMS

As the members are aware, the Company’s shares are compulsorily tradable inelectronic form.As on 31st March, 2010, 99.80% of the Company’s paid-up capitalrepresenting 24,26,15,250 equity shares is in dematerialized form with both thedepositories as compared to 99.76% representing 24,25,21,100 equity shares for theprevious year ending 31st March, 2009.

Your Company has established connectivity with both depositories – NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL).In view of the numerous advantages offered by the depository system, member holdingshares in physical mode are requested to avail of the dematerialization facility witheither of the depositories.

Your Company has appointed M/s. Alankit Assignments Limited, a Category-I SEBIregistered R & T agent as its Registrar and Transfer Agent across physical andelectronic alternatives.

FOLLOWING STOCK EXCHANGES

I. National Stock Exchange of India Limited

"Exchange Plaza" C-1, Block G,

Bandra-Kurla Complex, Bandra (East),

Mumbai – 400051

II. Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers

25th Floor, Dalal Street

Mumbai – 400001

The Company has paid the Annual Listing Fee for the financial year 2010-11 to the stockexchanges.

The Company has paid custodial fees for the year 2010-11 to National SecuritiesDepositories Limited (NSDL) and

Central Depository Services (India) Limited (CDSL) on the basis of numbers ofbeneficial accounts maintained by them as on 31st March, 2010.

III. The Global Depository Receipts (GDRs) of the Company were listed on LuxembourgStock Exchange (Code: US4826571030), at de la Bourse de Luxembourg, 11, av de la Porter– Neuve, L-2227 Luxembourg and same has been delisted from exchange with effect from07th day of July, 2010.

22. APPRECIATION

The Board acknowledges with gratitude the co-operation and assistance provided to yourcompany by its bankers, financial institutions, and government as well as non-governmentagencies.The Board wishes to place on record its appreciation to the contribution made byemployees of the company during the year under review. The company has achieved impressivegrowth through the competence, hard work, solidarity, cooperation and support of employeesat all levels.Your Directors thank the customers, client, vendors and other businessassociates for their continued support in the company’s growth.Your directors arethankful to the shareholders and depositors for their continued patronage.

Annexure ‘A’ to Directors’ Report

Particulars required under the Companies (Disclosure of Particulars in the Report ofthe Board of Directors) Rules, 1988

Conservation of Energy:

(a) Energy Conservation Measures Taken:

At Ghaziabad Unit

1. Installation of capacitors to improve the power factor from 0.92 to 0.97.

2. Installation of temperature sensor at cooling tower to run the cooling tower pump inclose loop.

3. Energy audit was conducted for entire plant to find the losses in utility andprocess.

4. Use of fuel additive in boiler to increase the combustion efficiency.

5. Installation of pressure sensor to operate the compressor in close loop with VFD.

6. Shifting of air compressor for optimum compressed air uses in plant.

7. Use of treated effluent for horticulture.

8. Installation ofVapor absorption Machine for air conditioning

9. Replacement of existing 40W tube light with copper ballast with 28 watt T5 tubelight with electronic ballast.

10. Replacement of 400 watt Mercury fittings with 70 watt Mercury fittings.

At Dhuri Unit

1. Installation of 3 nos.flash steam recovery heat exchangers in sella plant, solventplant & Berico plant for heating water with the help of flash steam from condensate.

2. Installation of 2 nos.heat exchangers for preheating boiler feed water withdeareator vent steam in H.P. boiler.

3. Installation of heat exchanger for pre heating boiler feed water with the help ofboiler flue gases.

4. Replacement of one no. aluminium blade fan of cooling tower FRP blade fan therebysaving electrical power.

5. Replaced soft water pump for cooling tower make up water by installing a pipe linewhich supplies make up water to cooling tower by gravity head only thereby saving onelectrical power used for running the soft water pump.

(b) Additional Investments and proposals, if any, being implemented for reduction ofconsumption of energy: NIL

(c) Impact of the measures at (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods:

Energy conservation measures have helped the Company in its drive towards costreduction substantially. Direct energy costs reduced approximately by Rs. 400 the yearover previous year on account of measures taken.By above measures energy saved per day isapproximately 2500 units.

Form - A

Form for disclosure of Particulars with respect to Conservation of Energy :2009-10

Disclosure of particulars with respect to Conservation of Energy:

A. Power and Fuel Consumption

(d) Total energy consumption and energy consumption per unit of production: Totalenergy consumptions are as under: (In Unit)

Energy consumption per MT of production is as under: (In Unit)

Form - B

[See Rule 2]

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

i) Development, testing and specification setting of packaging materials.

ii) Formulation and evaluation of Agricultural inputs to enhance farm productivity,cropquality and for other such applications.

iii) The Company is conducting its R & D activities for developing the process ofmanufacturing Liquid Glucose,Maltodextrin and Gluten.

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

i) Cost reduction, import substitution and strategic resource management.

ii) Quality evaluation of finished products and raw materials.

iii) Ensuring product quality.

iv) Value addition to existing by product i.e. Rice Kinki resulting into higherrealization by production of Liquid Glucose, Maltodextrin etc in the years to come.

v) Entering new market segments.

3. Future plan of action

i) Reducing packaging weight / volume.

ii) Roll out of new range of differentiated products of international quality.

iii) Improvement of process and resource use efficiencies.

iv) Enlarge the scope of Agri-inputs options.

v) All the efforts are being continued in the directions of product/process developmentas mentioned above.

4. Expenditure on R & D (Rs. in Lacs)

Technology absorption, adaptation and innovation

1. Efforts, in brief, made towards technology absorption, adaptation and innovation:

Technologies were successfully absorbed, resulting in a high production and new productdevelopment to meet existing and new customer requirements.

Technology innovations were successfully implemented to increase production and reducethe consumption of raw material, energy and utilities.

2. Benefits derived as a result of the above efforts, e.g., product improvement, costreduction, product development, import substitution, etc.:

Low density Boiler was commissioned to cope with existing turbine depending on theusage.

3. Imported technology during the last 5 years:

(a) Technology imported:

Company continuously import Plant and Machinery like High Poly Polisher, Sorted-Z4,Indent Cylinder, Strech Wrapping MachineForks Lift, Heater Assb from Germany, UK, USA,Austria, Japan,Thailand, etc for grading and sortex of rice to the satisfaction of thecustomers.

(b) Year of import: 2009-10

Has technology been fully absorbed:Technology imported and fully absorbed.

If not fully absorbed, areas where this has not taken place, reasons therefore andfuture plans of action: NA

C. Foreign Exchange Earnings and Outgo:

(f) Activities relating to exports, initiatives taken to increase exports, developmentof new export markets for products and services and export plans:

The Company mainly deals in agri-products like rice, which are sold throughout theworld and in the domestic market under various brand names like: India Gate, Doon, NurJahan, Bemisal, Lotus and Aarati, India Gate Classic. Company’s brand India GateClassic has got a overwhelming response in overseas market. Company has made its Dhuriplant fully operational to have economies of scale of mass production to become morecompetitive in international market.

Your Company is an ISO-9001-2000 certified Company with KOSHAR and HACCP (HazardAnalysis & Critical Control Point) Certifications.

(g) Total foreign exchange used and earned

The Company is engaged continuously in exploring new international markets. During theyear under review, the Company reported exports (FOB value) of Rs.881,16,32,102/-(Previous Year Rs.661,15,73,108/-).

During the year under review,Company expended Rs.18,56,46,779/- (PreviousYearRs.12,35,21,594/-) in foreign exchange while earnings in foreign exchange were Rs.892,64,88,897/- (Previous Year Rs.679,04,93,908/-). Thus the net inflow in foreignexchange was Rs. 874,08,42,118 /- (Previous Year Rs.666,69,22,314/-) during the year underreview.