DEAR SHAREHOLDERS,
 
 The Directors have pleasure in presenting their 71st Annual Report
 together with the Audited Financial Statements for the period ended
 31st March, 2011.
 
 GENERAL:
 
 All India Production of Sugar for the Season 2010-11 is expected to
 reach 23 to 25 million tonnes as a result of good monsoon and increase
 in sugar plantation area, as compared to the previous years production
 of 18.8 million tonnes. The government permitted export of 4,50,000
 tonnes of sugar during the year and also reduced the levy obligation
 from 20% to 10%.
 
 Our total crushing at Ugar and Jewargi, during the season 2010-11 was
 19.46 Lakh MT of sugar cane with bagging of 21.84 Lakh Qtls., of sugar
 at a recovery of 11.26% and 11.06% respectively.
 
 FINANCIAL RESULTS:
 
 The financial results of the Company are as shown below:
 
                                           31.03.2011      31.03.2010
 
 Particulars                              Rs. in Lakh     Rs. in Lakh
 
 Profit before Depreciation & Amortisation   3,251.89          636.11
 
 Depreciation & Amortisation                (2,866.44)      (3,442.45)
 
 Profit Before Tax                             385.45       (2,806.34)
 
 Provision for Tax, (including deferred 
 tax adjustment, short/excess provision 
 for tax and provision for FBT)                 16.12          802.70
 
 Profit after Tax / Net Profit                 401.57       (2,003.64)
 
 Balance of profit brought forward from 
 previous year                              (1,398.71)         604.93
 
 Profit available for appropriation           (997.14)      (1,398.71)
 
 Earning Per Share (EPS) for the year            0.36           (1.78)
 
 DIVIDEND:
 
 In view of inadequate profits, your directors have not recommended any
 dividend for the Financial Year 2010-11.
 
 OPERATIONS:
 
 SUGAR at UGAR:
 
 Particulars                             Sugar Season    Sugar Season
 
                                              2010-11         2009-10
 
 Date of beginning of crushing season      04-11-2010      26-10-2009
 
 Date of ending of crushing season         29-04-2011      03-04-2010
 
 Number of Working Days                           177             160
 
 Sugar Cane Crushed (Lakh MT)                   15.99           14.27
 
 Recovery                                      11.26%          11.54%
 
 Sugar Produced (Lakh Qtls.)                    18.00           16.47
 
 SUGAR at JEWARGI:
 
 Particulars                             Sugar Season    Sugar Season
 
                                              2010-11         2009-10
 
 Date of beginning of crushing season      10-11-2010      28-10-2009
 
 Date of ending of crushing season         05-05-2011      21-04-2010
 
 Number of Working Days                           177             176
 
 Sugar Cane Crushed (Lakh MT)                    3.47            2.02
 
 Recovery                                      11.06%          10.11%
 
 Sugar Produced (Lakh Qtls.)                     3.84            2.05
 
 DISTILLERY, IML PRODUCED & ELECTRICITY GENERATED :
 
 Particulars                           Financial Year  Financial Year
 
                                              2010-11         2009-10
 
 Rectified Spirit Produced (Lakh BL)            94.08           85.94
 
 Denatured Spirit Produced (Lakh BL)            30.99           16.95
 
 Potable Alcohol Produced (Lakh BL)             89.38           82.25
 
 Electricity Generated (Lakh KW )            1,479.58        1,358.60
 
 Electricity Exported (Lakh KW )               855.56          772.57
 
 Electricity includes generation & export at Ugar and Jewargi Units.
 
 Your Directors expect to procure about 20 to 22 Lakh MT sugarcane at
 Ugar and Jewargi Units during 2011 - 12 crushing season.
 
 ENVIRONMENTAL SAFETY:
 
 Our Company continues to pursue its environmental friendly approach
 towards Industrial growth. Constant improvements are being made in the
 process and equipments, to minimize the discharge of effluents and
 emissions.
 
 FIXED DEPOSITS:
 
 The number of Depositors, who have not claimed their deposits after
 maturity as on 31st March, 2011 was 10 and the amount outstanding as on
 that date was Rs. 15.54 Lakh.
 
 COST AUDIT:
 
 Our Company has received the approval of Central Government for the
 appointment of Shri. V. V. Deodhar, Cost Auditor, Mumbai to conduct the
 Cost Audit of Sugar and Industrial Alcohol for the Financial Year
 2010-11.
 
 DIRECTORS:
 
 Sarvashri. R.V. Shirgaokar, A. B. Kage and D. B. Shah retire by
 rotation and being eligible offer themselves for re-appointment.
 
 Shri. Niraj S. Shirgaokar and Chandan S Shirgaokar were appointed as an
 Additional Directors w.e.f. 1st April, 2011, liable to retire at
 ensuing Annual General Meeting. Being eligible, offer themselves for
 re-appointment and a notice from a member proposing their candidature
 has been received under section 257 of the Companies Act, 1956.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 We confirm:
 
 i] That in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures.
 
 ii] That 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 a true and fair view of the state
 of affairs of the Company 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.
 
 CORPORATE GOVERNANCE:
 
 Our Company has been following good Corporate Governance since its
 inception. The shares of our Company are listed on Bombay Stock
 Exchange Ltd., and National Stock Exchange of India Ltd., and we are
 regularly and timely complying with the filing requirements as per
 Listing Agreement. As required under SEBI Guidelines, a Corporate
 Governance Report is annexed.
 
 CO-GENERATION AT UGAR & JEWARGI:
 
 During this year electricity generated was 1,479.58 Lakh KW of which we
 have exported 855.56 Lakh KW through Tata Power Trading Company by
 consuming 4.92 Lakh MT of Bagasse. During the Financial Year 2010-11,
 the electricity export rates received till March, 2011 were quite
 reasonable and the average rate realised during the season was Rs 4.98
 per unit at Ugar and Jewargi.
 
 DISTILLERY:
 
 The production of Rectified Spirit was 94.08 Lakh BL as compared to
 85.94 Lakh BL during the previous year. During the year under review,
 the production of ethanol restarted and we have supplied 9.64 Lakh BL
 to the Oil Companies.
 
 INDIAN MADE LIQUOR (IML) AT UGAR:
 
 The Company manufactured 10.22 Lakh cases at Ugar during this year as
 against 9.39 Lakh cases during the previous year. Company has continued
 bottling its products at M/s. K. S. Distilleries, M/s. SDF Industries,
 M/s. Chamundi Distillery & Winery and Rana Sugar.
 
 With exhaustive marketing efforts, we expect to substantially improve
 the performance during the next ye a r.
 
 100% EXPORT ORIENTED UNIT (SUGAR SHIP) :
 
 During the year under review the EOU has exported sugar ships worth Rs.
 231.46 Lakh as against Rs.260 Lakh in the previous year to M/s Fragies
 (GmbH), Germany. The export orders from M/s. Fragies have taken a good
 shape. Further negotiations are on for supply order from Edeka and Rowe
 (Germany) in addition to Netto.
 
 The EOU has maintained the positive NFE status during the year. We are
 in talk with Café Coffee Day for introducing our product at their 1000
 retail outlets all over India and the positive results are coming up.
 
 SAP – SYSTEM, APPLICATIONS AND PRODUCT:
 
 As reported in the last annual report, the SAP system is extended at
 Jewargi Unit w.e.f. 01st April, 2010 and we are getting good results.
 
 DEMATERIALIZATION OF SHARES:
 
 Our Company has provided connectivity with NSDL & CDSL for
 dematerialization of its shares for trading in electronic form under
 ISIN-No.INE071E01023. So far 8,15,24,542 shares have been
 dematerialised by the shareholders, i.e. 72.47% of total shareholding.
 
 LISTING OF SHARES ON NSE:
 
 Company has received the Listing and Trading permission from National
 Stock Exchange of India Ltd., on 23rd August, 2010 and the equity
 shares are traded regularly.
 
 CONSERVATION OF ENERGY AND PARTICULARS OF EMPLOYEES:
 
 Particulars pertaining to conservation of energy, technology absorption
 and foreign exchange earnings and outgo have been given under Annexure
 I. With the latest amendment to section 217(2A) of the Companies Act,
 1956, none of our employees are falling within the revised salary limit
 prescribed under particulars of employees.
 
 AUDITORS:
 
 You are requested to appoint auditors for the ensuing year and to fix
 their remuneration. Present auditors M/s. P.G. Bhagwat, Chartered
 Accountants, having Firm Registration No: 101118W, are eligible for
 reappointment.
 
 ACKNOWLEDGMENT:
 
 Your Directors wish to place on record their sincere appreciation for
 the continued support received from Managements of Central Bank of
 India, Bank of Baroda, Union Bank of India, The IDBI Ltd., Bank of
 India, ICICI Bank Ltd., and IFCI Factors Ltd., for providing working
 capital finance and Central Bank of India, Bank of Baroda, Rabo
 International., Axis Bank Ltd., Technology Development Board, Sugar
 Technology Mission and Sugar Development Fund, for providing long term
 finance for capital Investments, Tata Power Trading Co. Ltd., and
 HESCOM, for transmission of energy.
 
 Your Directors thank the Government of India, Government of Karnataka,
 Government of Maharashtra, Government Authorities, Shareholders, Cane
 suppliers, Workers and Staff for their co-operation and contribution to
 the overall progress of the Company.
 
                                 By order of the Board of Directors,
 
                                  For The Ugar Sugar Works Limited,
 
 Place: Panhala                              R. V. Shirgaokar
 
 Date: 20-05-2011                           Chairman & Mentor