Dear Shareholders,
 
 2010-11 will be remembered as another year of challenges for the sugar
 industry owing to more than required regulations.  Despite higher sugar
 production, the Government''s move to curtail inflation put pressure on
 sugar prices and restricted exports and stockholding limits of sugar by
 institutional customers. Besides, the high sugarcane prices worsened
 the situation for sugar companies, as it was completely unaligned with
 the price of the end product.
 
 Despite supporting around 50 million farmers and directly providing
 employment to rural masses and contributing to rural development, sugar
 is the only industry in independent India that is still reeling under
 extreme government control. The excessive control in the guise of an
 exercise to control inflation is wholly unwarranted for the reason that
 sugarcane accounts for just over 2% and 1% of the total consumer
 expenditure for rural and urban India, respectively. As a matter of
 fact, household consumption accounts for just one-third of the total
 sugar consumption, with institutions and bulk consumers accounting for
 the remaining two-third.
 
 Despite these adversities, Oudh Sugar reported 66% increase in gross
 sales and 618% increase in EBIDT. While the former was a result of an
 increase in sales volume, the latter was the consequence of an
 improvement in capacity utilization due to higher sugarcane
 availability. In addition, there was a positive improvement in the
 performance of industrial alcohol and the renewable energy divisions of
 the organization due to higher availability of molasses and bagasse.
 Today, we are relentlessly investing towards improving our operational
 efficiencies and enhancing the fundamental strengths of the
 organisation, by virtue of firm focus on core areas, consolidation of
 gains and industry foresight.
 
 We have continued to invest on research and development activities
 towards improving sugar recovery ratio as well as educating the cane
 growers to cultivate improved variety of sugarcane with higher sucrose
 contents. During the current year our main thrust will be to contain
 the high cost of finance without impacting the fund requirements for
 enlarged business operations.
 
 Going ahead, we expect to witness improved profitability owing to
 systematic reduction and well management of the debt burden and
 maximisation of capacity utilisation of all the mills. I am grateful to
 all our employees, shareholders, investors, customers and other
 stakeholders for keeping faith in our vision and capabilities to move
 forward with determination in both good and bad times.
 
 Warm Regards,
 
 Chandra Shekhar Nopany