2009-10 was a defining year in the corporate history of SRSL. We became
 the first and only sugar company to have a strong foothold in India and
 Brazil, the largest sugar consuming and producing geographies in the
 world. In many ways, however, this represented a continuation of our
 inorganic growth strategy, of acquiring distressed assets and turning
 them around.  Only this time, the scale was far larger, and the
 geography different.
 
 CONVICTION AND ACTION
 
 Our action was driven by a strong conviction in the potential of such
 assets, reeling as they were under the aftermath of the global
 liquidity crisis and capital crunch. The fiscal discipline of our
 existing operations, marked by a modestly geared balance sheet
 (debt-equity ratio of 0.62) and exemplary financial stewardship,
 enabled us to mobilise capital required. In a sense, this was the
 fructifcation of our exploratory efforts in Brazil since early 2009.
 
 Therefore, 2009-10 resulted in SRSL emerging as a unique company in the
 sugar world.
 
 STRATEGIC ROADMAP
 
 Both our acquisitions (100% in Renuka Vale do Ivai S/A formerly Vale do
 Ivaí S/A - Açúcar e Álcool and 50.34% in Renuka do Brasil S/A formerly
 Equipav) are being invested with further capital investments to enhance
 production capacities, improve capacity utilisation, and further
 increase co-generation capacities. These investments will also
 lubricate the working capital cycle and improve work-force management
 at these mills.
 
 Combining the four Brazilian plants with our Indian capacity, the
 overall crushing capacity at SRSL will reach 22 mn tons of sugarcane in
 the next financial year.
 
 The acquisitions bring us closer to building a global sugar and ethanol
 business, combining the most cost-efficient and scalable production
 areas in the world, along with a leading presence in the most important
 ethanol and sugar markets across multiple geographies.
 
 GROWING ETHANOL – A SUSTAINABLE FUEL ALTERNATIVE
 
 Renewable energy is one of the most efficient ways to achieve
 sustainable development. Increasing its share in the world energy
 matrix will help prolong the existence of fossil fuel reserves, address
 the threats posed by climate change, and enable better security of the
 energy supply on a global scale.
 
 Ethanol is one of the widely accepted forms of renewable energy,
 signifying the answer to high fuel prices, speedy depletion of fossil
 fuel reserves and ballooning fuel demand. Ethanol dominates the worlds
 biofuel market and its production is expected to register 6% CAGR
 during 2008-2017.
 
 Indias ethanol production is likely to attain a CAGR of 2%-plus during
 the same period. At SRSL, Brazilian ethanol can supplement our domestic
 production, as currently the mandatory blending of ethanol in gasoline
 is only 5% owing to limited domestic product availability. The goal is
 to reach 20% by 2017, which may represent a captive market of 3 billion
 gallons of ethanol annually.
 
 Brazilian sugarcane ethanol after 30 years of production, is a global
 energy commodity that is fully competitive. It uses modern equipment
 and abundantly available sugar cane as feedstock resulting in
 high-energy balance and reduction of total life cycle greenhouse gas
 emissions. Moreover, with the commercial success of fexi fuel vehicles,
 the outlook for sugarcane ethanol looks secured.
 
 SRSL is well positioned to benefit from this positive outlook given our
 enhanced ethanol capacities, and production fexibility based on market
 conditions.
 
 FUTURE PROOF
 
 We now have taken over distressed sugar assets, operating at less than
 70 per cent capacity utilisation, and our primary aim is to increase
 capacity utilisation, produce more efficiently and sweat our assets
 better. An increasingly positive price environment, coupled with our
 conservative risk-management practices, will result in attractive
 margins being locked-in going forward.
 
 Thus, we are confdent of maintaining and growing the bottom-line, in
 line with our track record of stable performance, despite the
 fuctuations in the sugar price cycle. Our Brazilian acquisitions are
 already EPS accretive signalling a strong growth in shareholder value
 in the years to come. The geographic diversity of our business also
 provides an insulation against significant exposure to the impact of
 regulatory policy in India.
 
 AN INDUSTRY THAT NEEDS ATTENTION
 
 A growing global population requires more food. According to the UNs
 Food and Agriculture Organisation, food production must double by 2050.
 The shortage of food is already beginning to fnd illustration in prices
 - in the last 12 months, several agri-commodities have been trading at
 historically high prices. However, investments in the agricultural
 sector are still lagging far behind what is required. We believe, that
 companies that have invested in agriculture, and are striving to
 increase capacities will be amply rewarded in the times to come.
 
 SRSL is a strong, robust organisation committed to the industry we are
 in.
 
 We have emerged as Indias first multinational operating in the sugar
 industry, encouraging a stimulated multi-cultural environment and
 cross-pollination of ideas across continents. We are currently looking
 at modalities to harmonise our multi-geographic facilities in terms of
 operational excellence, human resource development, environment
 sensitivity and social responsibility.  SRSL is not only a company of
 strongly-held convictions, but one with the ability and willingness to
 act on those convictions to maintain our value proposition with all our
 stakeholders.
 
 Narendra Murkumbi,
 
 Co-founder, Vice Chairman and
 Managing Director