Dhampur Sugar Mills

The Directors are pleased to present their 74th Annual Report together
 with the Companys audited accounts for the year ended on 30th
 September 2008.
 
                                                    (Rs. in crores)
 Financial results                          Current year Previous year
 
 Total turnover                                   750.69   655.44
 
 Operating profit (before interest, 
 depreciation, extraordinary items 
 and tax)                                         142.56  (-)9.00
 
 Interest                                          77.31    44.52
 
 Depreciation                                      53.37    33.23
 
 Extraordinary items                            (-)18.04     8.17
 
 Profit before tax                              (-) 6.16 (-)78.58
 
 Provision for tax                                  9.76    18.10
 
 Profit after tax                                   3.60 (-)60.48
 
 Proposed dividend                                  0.30     0.30
 
 Tax on proposed dividend                           0.05     0.05
 
 Balance brought forward                            4.87    65.70
 
 SurplusA-) Deficit carried to Balance Sheet        8.12     4.87
 
 Change in Companys name
 
 The Companys shareholders passed a resolution for a change in the
 Companys name from The Dhampur Sugar Mills Limited to Dhampur Sugar
 Mills Limited in the last Annual General Meeting held on 10th March
 2008. Accordingly, the Registrar of Companies, Uttar Pradesh and
 Uttarakhand, issued a fresh Certificate of Incorporation to the Company
 on 28th May, 2008.
 
 Dividend
 
 Your Directors did not recommend any dividend on equity shares but
 recommended on preference shares for the year ended on 30th September
 2008.
 
 Operational performance Sugar units
 
 The key operational data of four sugar units at Dhampur, Asmoli,
 Mansurpur and Rajpura for the two seasons are as follows:
 
                                                     Sugar season
 
 Sugar unit, Dhampur                               2007-08     2006-07
 
 Commencement of the crushing season              27.11.07    12.11.06
 
 Closing of the crushing season                   07.04.08    05.05.07
 
 Cane crushed (lac-qtls)                            143.48      171.32
 
 Recovery (percent)                                  10.41       10.15
 
 Sugar produced (lac-qtls)                           14.93       17.38 
 Sugar unit, Asmoli
 
 Commencement of the crushing season              27.11.07    14.11.06
 
 Closing of the crushing season                   31.03.08    06.05.07
 
 Cane crushed (lac-qtls)                             73.58       86.05
 
 Recovery (percent)                                   9.80        9.01
 
 Sugar produced (lac-qtls)                            7.21        7.75 
 Sugar unit, Mansurpur
 
 Commencement of the crushing season              25.11.07    05.11.06
 
 Closing of the crushing season                   13.04.08    29.04.07
 
 Cane crushed (lac-qtls)                             88.77      106.87
 
 Recovery (percent)                                   9.60        9.33
 
 Sugar produced (lac-qtls)                            8.52        9.97 
 
 Sugar unit, Rajpura
 
 Commencement of the crushing season              30.11.07    25.01.07
 
 Closing of crushing season                       18.03.08    26.04.07
 
 Cane crushed (lac-qtls.)                            55.82       41.54
 
 Recovery (percent)                                   9.74        9.38
 
 Sugar produced (lac-qtls.)                           5.44        3.80
 
 Summary (sugar operations) at a glance
 
 Cane crushed (lac-qtls)                            361.65      405.78
 
 Sugar produced (lac-qtls)                           36.09       38.90
 
 Recovery (percent)                                   9.98        9.59
 
 Performance of the Companys chemical unit
 
 The production of absolute alcohol increased by 120.22 percent to
 17,631 KL from the previous years 8,006 KL. Production (net) of acetic
 anhydride, ethyl acetate, acetaldehyde and acetic acid decreased by
 23.33 percent during the year to 20,005 MT from 26,086 MT in 2006-07.
 
 Subsidiary and promoted company
 
 Dhampur Sugar Distillery Private Limited became a subsidiary of the
 Company w.e.f. 28th March 2008.  The accounts of the subsidiary for the
 year ended 30th September 2008 is annexed herewith.
 
 Finance
 
 Equity shares During the year, the Company increased its equity share
 capital to Rs. 52.78 crore from Rs. 47.63 crore by issuing 51,41,052
 new equity shares of Rs. 10 each, including 50,000,00 equity shares to
 the Promoters Group Company(ies ) and 1,41,052 equity shares to
 preference shareholders of 0.01 percent compulsorily convertible
 preference shares.
 
 Equity warrants Around 12,00,000 equity warrants are issued to the
 Promoters Group Company(ies) and application money of Rs. 7 per warrant
 ( against issue price of Rs. 67 per warrant) is received, amounting to
 Rs. 0.84 crore.
 
 Preference shares During the year, the Company decreased its preference
 capital to Rs. 8.83 crore from Rs.11.57 crore, following the conversion
 of compulsory convertible preference shares into equity shares.
 
 Public deposits Public deposits as on 30th September 2008 stood at Rs
 8.07 crore as against Rs. 7.65 crore in the previous year. There were
 unclaimed deposits amounting to Rs. 0.57 crore pertaining to 120
 depositors as on that date. Out of this, depositors with deposits
 aggregating to Rs. 0.07 crore have subsequently claimed/renewed their
 deposits. However, the balance amount of Rs. 0.50 crore still remained
 unclaimed.
 
 Directors
 
 Mr. V. K. Goel, Mr. A. K. Goel,
 
 Mr. A. K. Gupta, Mr. Rahul Bedi and
 
 Mr. J. P. Sharma, Directors of the Company, retire by rotation and
 being eligible, offer themselves for re-appointment.
 
 Directors responsibility statement
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
 Directors confirm:
 
 i) That the applicable accounting standards have been followed in the
 preparation of the annual accounts;
 
 ii) That the Directors have selected such 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
 Companys state of affairs at the end of the financial year and of the
 profit or loss of the Company for that period;
 
 iii) That the Directors have taken proper and sufficient 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;
 
 iv) That the Directors have prepared the annual accounts on a going
 concern basis.
 
 Auditors and Auditors Report
 
 M/s S. Vaish & Co., Chartered Accountants, Kanpur, and M/s Mittal Gupta
 & Co., Chartered Accountants, Kanpur, the joint auditors of your
 Company will retire at the ensuing AGM and being eligible may be re-
 appointed.
 
 The observation of the Auditors in their report read with the accounts
 are self- explanatory and therefore do not require further explanation.
 
 Corporate Governance
 
 In compliance with Clause 49 of the Listing Agreement with the stock
 exchanges, a detailed Corporate Governance Report has been given
 elsewhere in this report, along with the Management Discussion and
 Analysis Report, which form an integral part of the Annual Report.
 
 A certificate from Mr. Saket Sharma, FCS, confirming compliance with
 the conditions of Corporate Governance as stipulated under Clause 49 of
 the Listing Agreement is attached to this report.
 
 Particulars of Employees
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 as amended, the names and other particulars of the employees are
 required to be set out in the Annexure to the Directors Report.
 However, as per the provisions of Section 219(1)(b)(iv) of the said
 Act, the Annual Report excluding the aforesaid information is being
 sent to all the Company members and others entitled thereto. Members
 interested in obtaining such particulars may write to the Company
 Secretary at its Registered Office.
 
 Conservation of energy, technology absorption, foreign exchange
 earnings and outgo
 
 The particulars as required by the Companies (Disclosure of particulars
 in the Board of Directors report) Rules, 1988, with regard to
 conservation of energy, technology absorption, foreign exchange
 earnings and outgo are given in the Annexure.
 
 Industrial relations
 
 The industrial relations remained cordial during the year.
 
 Acknowledgements
 
 Your Directors place on record their acknowledgement and sincere
 appreciation of the shareholders for their confidence in theCompanys
 management, the central government, the state government, banks and
 financial institutions for their continued support, the cane growers
 for their efforts in ensuring timely cane supply, the Companys
 officers and staff for their relentless and dedicated efforts,
 resulting in the Companys growth as well as a bright future.
 
                                     By order of the Board of Directors
 
 Place: New Delhi                                           V. K. Goel
 Date : 28th November 2008                                    Chairman