Shree Renuka Sugars

The Directors are pleased to present the 13th Annual Report of the
 Company together with the audited financial statements for the year
 ended September 30, 2008.
 
 Financial results                                      (Rs. in million)
 
 Particulars                                      2007-08       2006-07
 
 Revenues                                          18,246         7,486
 Profit before financial                            2,187         1,209
 expenses and depreciation
 Interest                                             685           180
 Depreciation and amortisation                        365           249
 Profit before provision for tax                    1,137           780
 Provision for taxation
 - Current                                            133            91
 - Deferred tax                                       259           145
 Net Profit                                           745           544
 Add: Excess provision for                            182            -
 depreciation written back
 Profit brought forward                               327           382
 Profit available for appropriation                 1,255           926
 Transfer to general reserves                         500           500
 Dividend on preference shares                          -            36
 Dividend on equity shares                             60            50
 Dividend tax                                          10            14
 Balance carried over                                 685           327
 
 Operational highlights
 
 The total turnover of the Company, net of excise duty including other
 income for the year ended September 30, 2008 was Rs. 18,246 million
 compared with Rs. 7,486 million for the previous year ended September
 30, 2007, which is an increase by 144%. The Company has reported an
 EBITDA of Rs. 2,187 million compared with Rs. 1,209 million for the
 previous year ended September 30, 2007, which is an increase by 81% and
 a net profit of Rs. 927 million (includes depreciation written back)
 for the year under review, compared with Rs. 544 million in the
 previous year, an increase of 70% over the previous year.
 
 Dividend
 
 Your Directors recommend a dividend of 20% on equity share capital of
 the Company (i.e. Re. 0.20 per equity share of Re. 1 each) for the year
 ended September 30, 2008. The payment of dividend will be subject to
 the approval of the shareholders at the ensuing Annual General Meeting.
 
 Transfer to reserves
 
 The Company proposes to transfer Rs. 500 million to the general reserve
 out of the amount available for appropriation and an amount of Rs. 685
 million is proposed to be retained in the profit and loss account.
 
 Sub-division of shares
 
 The face value of the equity shares of the Company has been sub-divided
 w.e.f. April 21, 2008 from Rs.10 each to Re.1 each.
 
 Deposits
 
 The Company has not accepted any public deposits and, as such, no
 amount of principal or interest on public deposits was outstanding on
 the date of the Balance Sheet.
 
 Further issue of capital and warrants
 
 The Company has in accordance with the statutory provisions, including
 SEBI (Disclosure and Investor Protection) Guidelines, 2000 and with the
 approval of the members in the Extraordinary General Meeting held on
 August 27, 2008, issued and allotted 18,000,000 warrants convertible
 into equity shares of the Company of Re. 1 each at a price of Rs.
 114.37 including premium of Rs. 113.37, determined in accordance with
 the SEBI Guidelines, to the promoters on a preferential basis. This was
 done with the objective to augment long-term resources of the Company
 for meeting fund requirements of ongoing capital expenditure, new
 acquisitions, improve manufacturing capacity and for general corporate
 purposes.
 
 Further, the Company has allotted 6,000,000 equity shares of Re. 1 each
 at a price of Rs. 62.571 including a premium of Rs. 61.571 each fully
 paid-up, consequent to the exercise of the option of conversion of
 6,000,000 warrants, in accordance with the SEBI guidelines, to the
 promoters on a preferential basis.
 
 The above issues of shares have resulted in an increase in the paid-up
 equity share capital of the Company from Rs. 269,963,160 to Rs.
 275,963,160, consisting of 275,963,160 equity shares of Re.1 each.
 
 Strategic acquisitions and developments
 
 The Company has entered into an agreement with the promoters of
 Ratnaprabha Sugars Ltd., for purchase of 100% equity shares of the
 Company, acquired in a bid granted by the Government of Maharashtra,
 Godavari Dudhana SSK, having a sugar- manufacturing unit in central
 Maharashtra with 1,250 tons of sugarcane crushing capacity and a
 distillery with a capacity of 30 kilo-litres per day. The plant has
 excellent sugarcane potential and over 250 acres of land, which can be
 developed for future expansions.
 
 As part of its focus on the fuel ethanol market, the Company has
 acquired Godavari Biofuel Pvt. Ltd., which has 4.8 acres of land
 adjacent to the Companys 300- KLPD ethanol plant in Khopoli,
 Maharashtra. The Company has a license to produce ethanol from alcohol.
 The land would be used to build ethanol storage tanks as it is
 strategically located near the Mumbai port to cater to SRSLs clients
 and /or for exports.
 
 The Company has acquired a majority shareholding in Gokak Sugars Ltd.
 in October 2008, having a 2,500-TCD sugar- manufacturing unit and a
 14-MW co-generation power plant at Kolavi village, Taluka Gokak,
 Belgaum in Karnataka.
 
 The Company has taken Raibag SSK Niyamit, Raibag, in Belgaum district,
 Karnataka and Balaghat SSK Limited, Balaghat, in Latur district,
 Maharashtra on lease basis.
 
 MoU with Hindustan Petroleum Corporation Limited (HPCL)
 
 The Company has signed a Memorandum of Understanding for formation of a
 joint venture Company with Hindustan Petroleum Corporation Limited for
 the purpose of setting up an integrated sugar and ethanol plant in the
 state of Maharashtra.
 
 Subsidiary companies and consolidated financial statements
 
 The Company had two subsidiaries in the beginning of the year.
 
 During the year, the following companies have become subsidiaries of
 the Company viz., KBK-Chem Engineering Private Limited, Shree Renuka
 Energy Ltd., Shree Renuka Agri Ventures Ltd., Godavari Biofuel Pvt.
 Ltd., Ratnaprabha Sugars Ltd., Shree Renuka Southern Africa Holdings
 FZC and Renuka Energy Resource Holdings FZE.
 
 In accordance with the Accounting Standards AS-21 on consolidated
 financial statements, your Directors have pleasure in attaching the
 consolidated financial statements, which form part of the Annual Report
 and Accounts. These consolidated financial reports provide financial
 information about your Company and its subsidiaries as a single entity.
 
 The Company has obtained approval from the Ministry of Company Affairs
 under Section 212(8) of the Companies Act, 1956, for exempting the
 Company from attaching its Annual Report, the copies of the Balance
 Sheets, Profit and Loss Accounts, Directors Reports and Auditors
 Reports and other documents required to be attached under Section
 212(1) of the act of all its subsidiary companies.
 
 Accordingly, the said documents are not attached to the financial
 statements of the Company. A gist of the financial performance of the
 subsidiaries is given in this Annual Report. The annual accounts of the
 subsidiary companies are open for inspection by any Member, and the
 Company will make available these documents/details upon request by any
 member of the Company/Subsidiaries of the Company interested in
 obtaining the same.
 
 Directors
 
 Mr. Sanjay Asher, Mr. Hrishikesh Parandekar, Mr. Jonathan Kingsman and
 Dr. B P Baliga retire by rotation. Except Dr. Baliga all others, being
 eligible, offer themselves for re-appointment at the ensuing Annual
 General Meeting. Dr. B. P. Baliga has expressed in writing his desire
 to retire from the Board. He will therefore be vacating his office on
 the date of the ensuing Annual General Meeting.  The Board swishes to
 place on record their deep appreciation for the valuable services and
 guidance rendered by Dr. Baliga during his tenure with the Company for
 over 10 years.
 
 A brief resume of the above Directors, nature of their expertise in
 specific functional areas, names of companies in which they hold the
 directorships /chairmanships of Committees of the Board as stipulated
 under Clause 49 of the Listing Agreement with the stock exchanges are
 given in the Section on Corporate Governance, elsewhere in the Annual
 Report.
 
 Employees Stock Option Scheme
 
 The grant of stock options to employees is a mechanism to align the
 interest of employees with those of the Company, to provide them with
 an opportunity to share the growth of the Company as also to foster
 long-term commitment. Towards achieving this goal, approval of the
 members was obtained in the Annual General Meeting held on December 28,
 2006 for introduction of the Stock Option Scheme.
 
 The Employees Stock Compensation Committee, constituted in accordance
 with the SEBI Employees Stock Option Scheme and Employees Stock
 Purchase Scheme Guidelines, 1999, administers and monitors the scheme.
 
 The disclosures under the guidelines are as under: Total Options
 Granted/ in force 2,380,000* Pricing Formula: Rs. 59.10*
 
 Options Vested/Exercised: NIL
 
 Employee wise details of options granted to:
 
 i) Senior Managerial Personnel 1,372,000*
 
 ii) Any other employee who receives a grant in any one year of option
 amounting to 5% or more of option granted during that yean:G.K. Sood-
 150,000*
 
 (*after adjusting for split)
 
 iii) Any other employees who have been granted options equal to or
 exceeding 1% of the issued capital of the Company at the time of grant:
 NIL
 
 Auditors and Auditors Report
 
 M/s Ashok Kumar Prabhashankar and Co., Chartered Accountants,
 Bangalore, Auditors of the Company, hold office until the conclusion of
 the ensuing Annual General Meeting and are recommended for
 re-appointment. Certificate from the Auditors has been obtained to the
 effect that their re-appointment, if made, would be within the limits
 specified under Section 224 (IB) of the Companies Act, 1956.
 
 The Auditors Report to the shareholders for the year ended September
 30, 2008 does not contain any qualification and therefore do not call
 for any explanation/comments.
 
 Directors Responsibility Statement
 
 The Board of Directors in terms of Section 217 (2AA) states that:
 
 a) in the preparation of the annual accounts the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures from the same;
 
 b) the Directors have selected such accounting policies and applied
 them consistently and made judgment and estimates that are reasonable
 and prudent, so as to give true and fair view of the state of affairs
 of the Company as at September 30, 2008 and of the Profit and Loss of
 the Company for the year ended on that date;
 
 c) 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;
 
 d) the Directors have prepared the annual accounts on a going concern
 basis.
 
 Conservation of energy, technology absorption, foreign exchange
 earnings and outgo Information as per the Companies (Disclosures of
 Particulars in the Report of the Board of Directors) Rules, 1988
 relating to conservation of energy, technology absorption, foreign
 exchange earnings and outgo form a part of the report and is annexed
 hereto.
 
 Corporate Governance
 
 During the year under review, your Company has taken adequate steps to
 ensure that all mandatory provisions of Corporate Governance as
 stipulated under Clause 49 of the Listing Agreement have been complied
 with. A separate report on governance along with the Auditors
 Certificate on its compliance, forms part of the Report and is annexed
 hereto.
 
 Particulars of employees
 
 Information as required under Section 217(2A) of the Act, read with the
 Companies (Particulars of Employees) Rules 1975, as amended, are given
 in an Annexure forming part of this report.
 
 Human Resource
 
 Industrial relations remained cordial throughout the year. As in the
 earlier years, the Company conducted several training programmes. Your
 Directors place on record their appreciation for the significant
 contribution made by all the employees at all levels; their competence,
 perseverance, and hard work that has enabled the Company to cross new
 milestones on a continual basis.
 
 Management Discussion and Analysis Report (MDA)
 
 The Management Discussion and Analysis Report on the business and
 operations of the Company is attached to this report.
 
 Acknowledgements
 
 Your Directors wish to place on record their sincere appreciation for
 the assistance and co-operation received from the financial
 institutions, banks, government authorities, customers, vendors and
 cane producers and finally to all shareholders, for their trust and
 confidence reposed on the Company. The Directors also express their
 deep sense of appreciation for the committed services of the
 executives, staff and workers of the Company.
 
 
                                  On Behalf of the Board of Directors
 
 Place: Mumbai                                      Vidya M. Murkumbi
 Date : November 14, 2008                                 Chairperson