The Directors have pleasure in presenting the Annual Report and the
 Audited Accounts of your Company for the year ended 31st March 2011.
 
 Despite occasional hiccups, the world witnessed the process of economic
 recovery during the year.  Tumultuous conditions prevailed in South
 East Asia and the devastating earthquake and tsunami followed by a near
 nuclear catastrophe in Japan dampened the economic scene, which was
 otherwise on an upswing.
 
 Our Country to a great extent was successful in insulating itself from
 the economic upheaval by taking timely measures and attained economic
 growth, envied even by developed countries. However, the momentum was
 somewhat disturbed by continued high infation driven by surging global
 commodity prices and disclosures of a slue of incidents of economic
 misgovernance in the realm of public affairs, unprecedented in the
 history of the Country. In light of strong public opinion and growing
 intolerance to economic misgovernance, the Government is taking/
 planning various measures and it is hoped that the Country will emerge
 stronger.
 
 The recent assembly elections witnessed unprecedented levels of turnout
 for voting, refecting the vibrancy of the Countrys democracy. The
 results seem to point towards a desire for more transparent governance
 and faster progress and development.
 
 For the Company 2010-11 was a diffcult year. For most part of the year,
 the Companys sugar business suffered from the overhang of the severe
 mismatch of last years cane and sugar prices, which situation improved
 in the last quarter. Linkage of these two through rational policy
 initiatives is an imperative need for survival of the industry.
 Overall, infationary pressure and competition were countered by various
 steps taken during the year.
 
 FINANCIAL RESULTS
 
 Turnover for the year including other income at Rs.913 cr. was at an
 all time high against Rs.874 cr. in the previous year. There was a
 gross Profit of Rs.10.2 cr. as compared to Rs.76.3 cr. in the previous
 year and net loss of Rs.5.5 cr. as compared to net Profit after tax of
 Rs.38.9 cr. in the previous year.
 
 In view of the net loss for the year under review, the Directors have
 not recommended any dividend for the year.
 
 OPERATIONS
 
 Sugar
 
 During the year your Company achieved a sugar production of 1.38 lac MT
 by crushing 15.10 lac MT of cane against 1.20 lac MT of sugar and 13.05
 lac MT of cane in the previous year. The crushing at the Unit was
 highest in the State for the second consecutive year. The crushing
 capacity at the Unit was increased by 500 TCD and it achieved a peak
 crush of 12,500 TCD during this season. Additionally, a 15 MW TG Set
 was commissioned, so as to generate more power with the same amount of
 fuel. With this, the peak export of the power to the grid was around 23
 MW, as against 19 MW last year.
 
 The fnancial year 2010-11 has been a diffcult year for the industry
 because of low sugar prices and high cane prices. The year started with
 the Government putting pressure and checks on institutional buyers,
 which drove them to contracting large quantities of imported white
 sugar (equivalent to 8-9 months of their consumption). The State
 Government announced an SAP of Rs.205/Qtl. of cane for the season
 2010-11, which was relatively high in light of market prices of sugar.
 
 The lack of off-take by the institutional buyers through most of the
 year impacted the sentiment and the prices remained sluggish and
 range-bound with a negative bias. This was despite the international
 prices being high with prices of white sugar touching an all time high
 of USD 800 per MT. The industry made repeated representations to the
 Government to lift controls imposed on institutional buyers and also to
 allow exports. The Government took some minor steps in the later half
 but they were all too little and too late, to prevent the year from
 being fnancially unsatisfactory for the industry. This was a year,
 wherein the Indian sugar industry lost a golden opportunity to export
 surplus sugar at attractive prices and recoup some of its losses
 considering the shortage of sugar in international markets.
 
 Overall, while the Units operations were satisfactory, it suffered
 losses due to the sugar industrys environment. The set back was
 minimized through appreciable showing in other areas such as power,
 alcohol and chemicals.
 
 Alcohol
 
 Due to higher availability of captive molasses, and consequently higher
 production, the sales volumes of bulk alcohol more than doubled as
 compared to the previous year. As a result, there was a substantial
 increase in Profitability of the alcohol business. The alcohol market
 remained relatively stable due to resumption of the programme for
 blending of ethanol with petrol, and slight revival of demand from the
 alcohol-based chemical industry.
 
 Chemicals
 
 While sales revenue of chemical business of the Company was broadly at
 last years level, the Profit was lower due to higher cost of raw
 materials on the one hand, and lower selling prices arising out of
 intensifed international competition on the other.
 
 To mitigate the impact of the above adverse factors, the Company is
 working on cost reduction, productivity improvement, and product mix
 changes, as also exploring development of new products.
 
 Various initiatives at the Daurala complex towards conserving water,
 electricity, fuel and numerous steps towards going green have been
 recognized by various authorities. For our efforts in the direction of
 environment protection, conservation of natural resources and its
 utilisation, we were awarded Frost & Sullivans - Green Manufacturing
 Excellence - Aspirants Award 2011 in the large industry category. It
 is a matter of pride for us that we are the frst sugar complex to be
 given this recognition and award. This is an achievement, which is the
 result of past and present efforts at being environment friendly.
 
 Rayon
 
 The global recession continued to take its toll on the automobile
 industry. This was further compounded by the problems in the European
 economies in the frst half of the year. Shriram Rayons, however, was
 able to improve the export tonnage marginally. The selling prices were
 also increased, but the Rupee realisations were affected due to adverse
 exchange movements.
 
 The Units efforts to get approval of the value added dipped fabric
 materialized and it achieved substantial increase in the sale of dipped
 fabric. Renewed efforts were made to widen the customer base by
 pursuing approvals from new customers. The Unit has been successful in
 getting approval from two more European Tyre Manufacturers and the
 supply of material has commenced. Shriram Rayons also maintained
 consistent growth in sale of Nylon Chafer.
 
 The prospects in the coming year appear favourable, and in view of
 higher demand steps have been taken to technologically upgrade the
 textile operations. These efforts will continue this year also.
 
 SR maintained continued thrust on quality and reduction in wastages.
 The Unit was accredited with Environmental Management System
 Certifcation (ISO 14001 : 2004) during the year. To control the energy
 cost and also promote clean fuel usage, the Unit undertook modification
 of Power House. The Unit met 30% of energy requirement from renewable
 sources during the year.
 
 Subsidiary
 
 The bottling plant of Daurala Foods & Beverages Pvt. Limited, which was
 leased to the Company, having been relocated to the Companys
 Distillery for better control and economy, the Company has acquired the
 super structure and some other equipments of DFBPL for alternate use.
 
 RESEARCH & DEVELOPMENT
 
 At a time of fast changing technology and formulations, Research &
 Development activities have a pivotal role not only in developing new
 products but also in innovating measures for upgrading quality,
 production processes and energy saving measures. This is all the more
 important in case of chemicals and drug intermediaries having
 international market. The Company is fully seized of the importance of
 R&D and has facilities to match its operations, which are kept upgraded
 from time to time according to the need of the segments in which the
 Company operates.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 As required under Section 217 (2AA) of the Companies Act, 1956 your
 Directors state:
 
 - While preparing annual accounts the applicable accounting standards
 had been followed.
 
 - The Company had selected such accounting policies and applied them
 consistently and made judgements that are reasonable and prudent so as
 to give a true and fair view of the state of affairs of the Company as
 at the end of the fnancial year and of the Profit or loss of the Company
 for the period.
 
 - That the Company had taken proper and suffcient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities.
 
 - That the Company had prepared the annual accounts on a going concern
 basis.
 
 AUDITORS OBSERVATIONS
 
 The explanations/ information in respect of the observation of the
 Auditors in their Report on the standalone Accounts are given in detail
 in Notes to Accounts - (2)(b) of Schedule 11. This Note read with the
 relevant Audit observation is self-explanatory.
 
 CORPORATE GOVERNANCE
 
 Reports on Corporate Governance, Management Discussion & Analysis and
 Corporate Social Responsibility are given in Annexure-I.
 
 DIRECTORS
 
 Shri G. Kumar, Whole-time Director, retired on 31.1.2011 and Shri Anil
 Gujral has been appointed as a Whole-time Director from 1.2.2011 for a
 period of 3 years. His appointment and terms of remuneration were
 approved by the shareholders by postal ballot.
 
 Shri Madhav B. Shriram and Shri Ravinder Narain, retire by rotation at
 the forthcoming Annual General Meeting and being eligible offer
 themselves for reappointment.
 
 OTHER INFORMATION
 
 There was no employee in the Company whose particulars are required to
 be given under section 217(2A) of the Companies Act, 1956.
 
 The information pursuant to Section 217(1)(e) of the Companies Act on
 conservation of energy, technology absorption and foreign exchange
 earnings/ outgo is given in Annexure - II.
 
 ACKNOWLEDGEMENT
 
 The Directors acknowledge the continued co-operation and support
 received from the fnancial institutions, banks and various Government
 agencies, and all our business associates.
 
 The Directors also place on record their appreciation of the
 contribution made by employees at all levels.
 
                                       For and on behalf of the Board
 
 New Delhi
 
 May 30, 2011                                                CHAIRMAN