The Directors take pleasure in presenting their seventeenth Annual
 Report together with the audited accounts for the year ended 30th
 September 2010.
 
 1.  FINANCIAL RESULTS
 
                                              Rs in lacs     Rs in lacs
                                             Year ended    Year ended
                                             30.09.2010    30.09.2009
 
 Gross profit before depreciation, 
 interest & tax                                6,500.24    12,597.84
 
 less: Depreciation                            3,205.86     3,295.50
 
 Interest                                      4,630.69     6,164.42
 
 Profit / (Loss) before tax and 
 exceptional items                            (1,336.31)    3,137.92
 
 Less: provision for taxes (including 
 previous year)                                   12.46      (130.65)
 
 Fringe Benefit Tax                               (2.68)        4.24
 
 Deferred tax liability                         (440.55)      756.67
 
 Profit after tax                               (905.55)    2,507.66
 
 Add: Balance brought forward from 
 previous year                                    86.99    (1,672.69)
 
 Amount available for appropriation             (818.56)      834.97 
 
 Appropriations:
 
 Proposed Dividend
 
 - On equity shares                                Rs         244.72
 
 - On preference shares                            Rs         266.40 
 
 Additional tax on dividend                        Rs          86.86
 
 Transferred to general reserve                    Rs         150.00 
 
 Balance carried forward to next
 year                                           (818.56)       86.99
 
                                                (818.56)      834.97
 
 
 
 2.  DIVIDEND
 
 In view of losses during the year & on account of inadequate amount
 available in Profit & loss account brought forward from the earlier
 year, your Directors are compelled to skip dividend on 8% and 12%
 Cumulative Redeemable preference shares as also on equity shares for
 the year.
 
 The Dividend on Redeemable Cumulative preference shares (both 8% & 12%
 series) are being accumulated & will be paid in the year of profit.
 
 3.  YEAR IN RETROSPECT OPERATIONS:
 
 Metrics of sugarcane crushed, sugar produced and recovery achieved
 during the year is given herein under:
 
 
 Units          Cane crushed in MT     Sugar produced in  Recovery in %
                                            quintals
 
 Dwarikesh 
 Nagar (DN)           6,61,507              6,83,165        10.31%
 
 Dwarikesh 
 Puram (DP)           6,48,301              6,34,460         9.77%
 
 Dwarikesh 
 Dham (DD)            5,85,508              5,14,082         8.77%
 
 Total               18,95,316             18,31,707         9.67%
 
 
 
 Your Directors are pleased to inform that the recovery recorded at DN
 plant was the highest in state of Uttar Pradesh.
 
 Performance of Cogeneration division: Metrics of power Sold:
 
 
                            2009-10                 2008-09
 
 Unit      Power sold 
           in lac units     Amount in 
                            Rs lacs        Power sold 
                                          in lac units   Amount in 
                                                         Rs lacs
 
 DN           203             773           135            400
 
 DP           627           2,541           307            966
 
 DD           559           2,257           275            868
 
 Total      1,389           5,571           717          2,234
 
 
 Performance of Distillery:
 
 During the year 4,226,785 litres of Industrial Alcohol (previous year
 3,305,401 litres) and 516,214 Llitres of Ethanol (previous year
 2,093,983) was produced at Dwarikesh Nagar unit of the Company. In
 value terms the sale of rectified spirit was Rs 882.13 lacs (previous
 year Rs 270.70 lacs) and sales of ethanol was NIL (previous year Rs
 550.28 lacs).
 
 4.  FINANCIAL PERFORMANCE:
 
 From financial perspective, the year 2009-10 was a lacklustre year. The
 year started of impressively with sugar prices touching a high of Rs
 4,200 per quintal in January, 2010. However, Government intervention
 and a series of measures initiated by the Government dampened the
 market sentiments and the price reversal thereafter were rapid and
 fast. the initial estimates of lower cane availability triggered a
 price war for procurement of sugarcane.  While sugar prices plummeted,
 increase in sugarcane prices beyond SAP was irreversible.
 
 Higher than estimated sugarcane availability coupled with unabated
 imports resulted in abundant availability of sugar. Government measures
 aimed at reining in sugar prices resulted in reduced demand for sugar.
 Institutional sugar consumers, Whole-sellers and retailers who
 constitute a vital cog in the supply chain operated with bare minimum
 stocks. Institutional sugar consumers were encouraged to import their
 sugar requirement directly.  the aforesaid factors dealt lethal blow to
 the market sentiments and sentiments have yet not shown signs of
 perking up. While the first quarter results were heart cockling, the
 results in the subsequent quarters doused all the enthusiasm.
 
 The saving grace was that in spite of numerous odds faced by the
 industry, your Company managed to earn cash profits.
 
 Financial highlights are enumerated herein Under:
 
 
                                                          lac/Rs
 
 particulars                     2009-10          2008-09
 
 Net Sales                        55,507           46,188
 
 EBIDTA                            6,500           12,598
 
 EBDTA                             1,870            6,433
 
 EBT                              (1,336)           3,138
 
 
 1.  Almost 65% increase in landed cost of sugarcane whereas only 39%
 increase in average realization of non- levy sugar was mainly
 responsible for shrinking EBIDTA margins.
 
 2.  Though levy sugar price increased by 36% but increase in levy
 obligation from 10% to 20% had overall adverse impact. Increase in raw
 material procurement cost was more than commensurate with increase in
 levy sale price. There was significant drop in the prices of
 by-products also.
 
 3.  EBIDTA margins, though declined during the year, compare favorably
 with EBIDTA margins of companies in the peer group. Comparatively,
 better EBIDTA margins bears testimony of overall effciencies and lower
 cost of production.
 
 4.  Since the company is highly leveraged the bottom-line continues to
 be under stress, though efforts of the Company to rationalize interest
 costs has paid dividends as the interest cost during the year declined
 to Rs 47 crores as compared to Rs 62 crores in the previous year.
 
 5.  CANE & SUGAR POLICY:
 
 The main policies of the government in relation to the sugar industry
 during the year were
 
 1.  the ratio of levy and free sale sugar was 20:80 for the crushing
 season 2009-10. However, the same now stands restored to 10:90 for the
 year 2010-11
 
 2.  The price of levy sugar for Central U.P. for the year was raised to
 Rs 1,808.47 per quintal for the production & supply of levy sugar from
 1st October, 2009 as against Rs 1,330.77 per quintal till the last
 season.
 
 3.  The Fair & Remunerative price (FRP) for the crushing season 2009-10
 was Rs 129.84 per quintal linked to recovery of 9.50%. the same has been
 increased to Rs 139.12 per quintal for the season 2010-11.
 
 4.  Chronology of SMP announced by the Central Government on the basis
 of recovery is given herein under:
 
 Season                         SMP Rs / Quintal.
 
 2000-01                           59.50
 
 2001-02                           62.05
 
 2002-03                           64.50
 
 2002-03 (Revised)                 69.50
 
 2003-04                           73.00
 
 2004-05                           74.50
 
 2005-06                           79.50
 
 2006-07                           80.25
 
 2007-08                           81.18
 
 2008-09                           81.18
 
 2009-10                          107.76
 
 2009-10 (SMP replaced by FRP)    129.84
 
 2010-11                          139.12
 
 
 5.  For the crushing season 2010-11 the state Government of Uttar
 Pradesh announced state Administered price (SAP) of Rs. 205 per quintal
 of sugarcane of the general variety to be delivered at the factory
 gate. this is as against state Administered price (SAP) of Rs. 165 per
 quintal of sugarcane of the general variety to be delivered at the
 factory gate for the crushing season 2009-10. the increase in SAP of Rs
 40 is unprecedented and does not augur well for the industry.
 
 6.  DIRECTORS
 
 Pursuant to Article 146 of the Articles of Association of the company,
 Shri M.G. Diwan, Shri K.P. Medhekar, Shri Harshvardhan Neotia and Shri
 K.N.Prithviraj, retire in the ensuing Annual General Meeting and being
 eligible offer themselves for re-appointment.
 
 7.  STATEMENT OF DIRECTORS RESPONSIBILITIES
 
 As required under the provisions of Section 217(2AA) of the Companies
 Act, 1956, your Directors confirm that:
 
 (i) In the preparation of the annual accounts, applicable Accounting
 standards have been followed with proper explanation relating to
 material departures, if any;
 
 (ii) 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 state of affairs of your company at
 the end of the financial year and of the profit of your company for
 that period;
 
 (iii) Taken proper & sufficient care for the maintenance of adequate
 accounting records in accordance with the provisions of the Companies
 Act, 1956 for safeguarding the assets of your Company and for
 preventing and detecting fraud and other irregularities; and
 
 (iv) Prepared the Annual accounts on a going concern basis.
 
 8.  CORPORATE GOVERNANCE
 
 As per clause 49 of the listing Agreement with the stock exchanges, a
 report on Corporate Governance together with the Auditors Certificate
 regarding compliance of the conditions of corporate governance,
 Management Discussion and Analysis statement forms part of the Annual
 report.
 
 9.  EMPOYEES
 
 In accordance with the provisions of sections 217 (2A), read with the
 Companies (particulars of employees) Rules, 1975, the names and other
 particulars of employees are to be set out in the directors report, as
 an addendum thereto. However, as per the provisions of section 219
 (1)(b)(iv) of the Companies Act, 1956, the report and accounts, as
 therein set out, are being sent to all members of the company excluding
 the aforesaid information about employees. Any member, who is
 interested in obtaining such particulars about employees, may write to
 the Company Secretary at the Registered Office of the Company.
 
 10.  CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EAENINGS AND OUTGO:
 
 pursuant to section 217 (1)(e) of the Companies Act, 1956, the
 particulars in respect of conservation of energy, technology absorption
 and foreign exchange earnings & outgo are furnished in Annexure – I and
 form a part of this report.
 
 11.  SUBSIDIARY COMPANYS REPORT:
 
 Faridpur sugars ltd., (FSL) a wholly owned subsidiary of the Company
 was incorporated on February 9, 2010.  Your company holds the entire
 100% equity share capital of FSL. The first accounting year of Faridpur
 Sugars limited shall end on March 31, 2011 and hence the details of
 Faridpur sugars limited as required u/s 212 of the Companies Act shall
 be included in the annual report of the company for the year ended on
 September 30, 2011.
 
 12.  AUDITORS & AUDITORS REPORT:
 
 The Auditors, M/s S S Kothari Mehta & Co., Chartered Accountants retire
 at the ensuing Annual General Meeting of the Company. You are requested
 to re-appoint the Auditors for the accounting year 2010-11 and fix
 their remuneration. M/s S S Kothari Mehta & Co., Chartered Accountants,
 being eligible, have offered themselves for reappointment.
 
 The observations regarding cane price and conversion of free sugar into
 levy sugar have been explained satisfactorily in note no 12 and 13
 respectively of schedule B to the notes on accounts. Further
 observation regarding funding of long term assets of Rs 53.10 crores
 through short term loans from bank has been explained under item no
 xvii of the annexure to Auditors report.
 
 13.  PUBLIC DEPOSITS
 
 The Company does not have any fixed deposits at the beginning of the
 year in terms of Section 58A of the Companies Act, 1956. the Company
 has not accepted any deposits during the year.
 
 14.  ACKNOWLEDGEMENT
 
 Your directors wish to place on record their sincere gratitude and
 appreciation to its share holders, sugar cane growers, employees,
 bankers, financial institutions, Central & State Government Agencies
 for their valuable contribution in the growth of the organisation.
 
 
                                               By order of the Board 
 
                              For DWARIKESH SUGAR INDUSTRIES LIMITED
 
                                                       VIJAY S BANKA
 
                                           WHOLE TIME DIRECTOR & CFO
 
                                                      B J MAHESHWARI
 
                                    WHOLE TIME DIRECTOR & CS Cum CCo 
 
 Place: New Delhi 
 
 Dated: 29th November, 2010