FLO_RightsIssue.pdf - Ugar Sugar

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ISSUE OPENS ON : NOVEMBER 17, 2008

LAST DATE FOR REQUEST FOR

SPLIT APPLICATION FORMS : NOVEMBER 24, 2008

ISSUE CLOSES ON : DECEMBER 02, 2008

COMPOSITE APPLICATION FORM (CAF)

FOR THE EQUITY SHAREHOLDERS OF THE COMPANY ANDRENOUNCEES ONLY

(Please read accompanying abridged version of Letter of Offer andinstructions on the reverse of this form carefully)

PLEASE DO NOT TEAR OR DETACH ANY PART OF THIS FORM

THIS DOCUMENT IS OF VALUE AND IS NEGOTIABLE

(TEAR HERE)

Signature & Stamp of the Banker to the Issue

Received from Mr/Mrs/Ms/M/s. ___________________________________________________________________________________________________ an application for _________________________ Equity Shares of Re. 1/- each at a premium of Rs. 7/- per share alongwith Cash / Cheque /Demand Draft

No.*__________________________ dated ____________________ drawn on _________________________________________________________________________________________________________________________________________________________________ for Rs. ________________________________being the application money payable thereon.

(Please write full address on the reverse, if the application is sent by post. Please preserve this acknowledgement slip carefully).

Date :_______________________________________

ACKNOWLEDGEMENT SLIP

(To be filled in by the Sole / First Joint Applicant)

*(Cheques / Drafts are subject to realisation).

FOLIO NO./CLIENT ID NO. CAF No.

PART 'A' – FORM OF APPLICATION BY EQUITY SHAREHOLDERS(For acceptance of rights entitlement and application for additional shares without renunciation)

FOLIO NO. CAF NO.

Sole/First Joint Applicant Second Joint Applicant Third Joint Applicant_____________________________ _____________________________ _____________________________

FOR BANK'S USE ONLY

BANK'S SERIAL NO.

BANK'S STAMP & DATE OF RECEIPT

REGISTRAR'S SERIAL NO.

APPLICANTS SHOULD MENTION FOLIO NO./CLIENT-ID & DP-ID AND CAF NO. ON THE

REVERSE OF THE CHEQUE/DRAFT

AMOUNT PAYABLE PER EQUITY SHARE

ON APPLICATION : Rs. 8/-

The Board of Directors,THE UGAR SUGAR WORKS LIMITED

Mahaveer Nagar, Sangli-416 416,(Maharashtra)

Dear Sirs,• I/We hereby accept and apply for allotment of the Equity Shares mentioned in BLOCK III below in response to the Letter of Offer

dated October24, 2008 and the attached abridged version thereof, offering the Equity Shares to me/us on rights basis .• I/We also apply for additional Equity Shares indicated in BLOCK IV below and agree to accept these Equity Shares or whatever

lesser number of Equity Shares as may be allotted by the Board of Directors.• I/We enclose the amount specified in BLOCK VI below at the rate of Rs. 8/- per Equity Share payable on application on the

total number of Equity Shares specified in BLOCK V below.• I/We agree to accept the Equity Shares allotted to me/us upon the terms and conditions of the said Letter of Offer, this

CAF and subject to the provisions of the Companies Act, 1956, the Memorandum and Articles of Association of the Companyand the Equity Shares to be issued / credited in this regard.

• I/We undertake that I/we will sign all such other documents and do all such acts, if any, necessary on my/our part to enableme/us to be registered as the holder(s) of the Equity Shares in respect of which this application may be accepted.

• I/We also agree to accept the shares subject to laws, guidelines, notifications and regulations relating to the issue of capitaland listing of securities issued as applicable from time to time by SEBI/Government of India/RBI and/or other authorities.

• I/We hereby solemnly declare that I am/we are not applying for the Equity Shares in contravention of Section 269SS of theIncome-Tax Act, 1961.

• I/We confirm that I/We are not a “US Person” or are not applying for these shares on behalf of “US Person”.

Please tick ( üüüüü ) whichever is applicable.• I am / We are Indian National(s) resident in India and that I am/we are not applying for the Equity

Shares as nominee(s) of any person(s) who is/are resident outside India or Foreign National(s) ora foreign company or a foreign controlled company.

• I am / We are Non Resident Indian who have made payments by way of a cheque drawn on NROAccount maintained in Mumbai or Rupee Draft purchased out of NRO Account maintainedelsewhere in India but payable at Mumbai.

• I am/We are Non-Resident Indian(s)/Person(s) of Indian Origin residing abroad and have madepayments by demand draft/cheque payable at Mumbai or funds remitted from abroad in thefollowing way :-• By Indian Rupee drafts purchased from abroad & payable at Mumbai or• By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Mumbai• Rupee draft purchased by debit to NRE/FCNR account maintained elsewhere in India & payable in

Mumbai• We are Foreign Institutional Investors(s) registered with SEBI and have remitted funds from

special Non-Resident Rupee Deposit Account.

Account No., Name of Bank and Branch of Sole/First Applicant for refund, if any, please refer to Instruction No. (e)

SAVINGS / CURRENT A/c. No.*(For Residents)

NRE/FCNR/NRO/Special NRE/NRO/OTHER A/c. No* (For Non-Residents)

A/c. No.

REQUEST FOR SHARES IN ELECTRONIC FORM I/We, the undersigned, want delivery of Equity Shares of THE UGAR SUGARWORKS LIMITED under the Rights Issue, in the Dematerialised Form. Details of my/our Beneficiary (Electronic) account are asgiven below: (tick (üüüüü) whichever is applicable)

Bank and Branch Address

NOTE : (1) Complete this form if you wish to apply as an Equity Shareholder (2) Leave Part 'A' blank, if you wish to renounce (3) Do not use both Parts 'A' and 'B'. If all the Parts are filled in, the allotment willbe made under Part B & C i.e. renouncee(s) only and entry in Part A shall be ignored. (4) Please check the number of Shares registered in your name and your entitlement of the number of Equity Shares asindicated in BLOCK (I) and (II), in case you find any mistake in your entitlement, please intimate the Registrar to the Issue so that the Registrar may amend the same (if necessary) on the basis of the entryin the Register of Members on Record date. (5) Please read the instructions at the reverse of this form and the Abridged version of Letter of Offer attached carefully, for further details.

'''''A'

* Strike off whichever is not applicable

Date . . . . . . . . . . . . . . . . . . . . . . . .

'W''W''W''W''W'

PART B – FORM OF RENUNCIATION



Dear Sirs,• Pursuant to the Letter of Offer dated October 24, 2008, I/We hereby renounce my/our Rights to the Equity Shares indicated in Block VII above in favour of the person(s)

accepting the same and signing Part C below with respect to such Equity Shares [Form of Applications by Renouncee(s)].• I/We have not made any application to the Company for the allotment of these Equity Shares in my/our name(s).

PART 'C' – FORM OF APPLICATION BY RENOUNCEE(S) (TO BE FILLED IN BY RENOUNCEE(S) ONLY)

(TO BE FILLED IN BY RENOUNCEE(S) ONLY) SIGNATURE(S)

Sole / First JointApplicant

Second JointApplicant

Third Joint Applicant

Sole/First JointApplicant's Address

Full Name Age

Father's/Husband's Name

Full Name Age

Full Name Age

'BBBBB'


Mahaveer Nagar, Sangli-416 416,(Maharashtra)Dear Sirs,

Sole/First Joint Applicant Second Joint Applicant Third Joint Applicant

_____________________________ _____________________________ _____________________________

[Signature(s) as per specimen recorded with the Company][In case of joint shareholders, all the holders should sign in the same order and as per specimen recorded with the Company/Depository)

'X'

'C''C''C''C''C'

NO. OF EQUITY SHARES RENOUNCED [BLOCK VIIVIIVIIVIIVII]

IN WORDSIN FIGURES

NO. OF EQUITY SHARESACCEPTED

[BLOCK VIII]

NUMBER OF ADDITIONALEQUITY SHARES APPLIED

[BLOCK IX]

TOTAL NO. OF EQUITYSHARES APPLIED FOR

[BLOCK X (BLOCK VIII + IX)]

AMOUNT PAYABLE ON APPLICATION @ Rs. 8 PER EQUITY SHARE[BLOCK XI ([BLOCK X x Rs. 8])

(Rs. in Figures) (Rs. in Words)

'Y''Y''Y''Y''Y'

Pin

REQUEST FOR SHARES IN ELECTRONIC FORM : I/We, the undersigned, want delivery of Equity Shares ofTHE UGAR SUGAR WORKS LIMITED under the Rights Issue, in the Dematerialised Form. Details of my/our Beneficiary(Electronic) account are as given below : (tick (üüüüü) whichever is applicable)

I/We understand that : i) in case of allotment of Equity Shares to me/us, my/ourBeneficiary Account as mentioned above would get credited to the extent of allotted shares.ii) in case of allotment of Equity Shares to me/us, if shares cannot be credited to my/ourBeneficiary Account for any reasons whatsoever, I/We will be given Physical Certificate(s) iii)if the names of applicants in this application are not identical and also not in the same order asthe Beneficiary Account details with the above mentioned DP, only physical certificates will beissued, and iv) The market lot for company's Equity Shares in Electronic Mode is one sharehowever for whatever reason if the company issues physical certificate, only oneconsolidated certificate will be issued for the entire holding under one folio.

Account No., Name of Bank and Branch of Sole/First Applicant for refund order, if any, please refer to Instruction No. e

SAVINGS / CURRENT A/c. No.*(For Residents)

NRE/FCNR/Special NRE/NRO/OTHERA/c. No.* (For Non-Residents)

A/c. No. Bank and Branch Address

* Strike off, whichever is not applicable

Refund through RTGS IFSC Code of the branch

Occupation 1) Service 2) Business 3) Housewife 4) Student 5) Others (for Sole/First Joint Applicant only)If you are an existing shareholder, in the same order of names, please quote the Folio No. ___________________ or DP ID ___________________ CL. ID ___________________

'Y''Y''Y''Y''Y'

Sole / First Joint Applicant Second Joint Applicant Third Joint Applicant

_____________________________ _____________________________ _____________________________

Date . . . . . . . . . . . . . . . . . . . . . . . .

Electronic Form Physical Form Total

Total No. of Shares Applied For

Date . . . . . . . . . . . . . . . . . . . . . . . .

Depository Name

Depository Participant (DP) Name

DP-ID No.

Beneficiary Account Number NSDL

Beneficiary Account Number CDSL

NSDL CDSL

I N

• In terms of the Letter of Offer dated October 24, 2008 and abridged version thereof and pursuant to the Form ofRenunciation signed by the above mentioned shareholder(s), I/We apply for allotment of Equity shares as indicated in blockX above. In respect of these "Equity Shares", I/We enclose the amount specified in Block XI being the amount payable onapplication.

• I/We also apply for additional Share(s) indicated in BLOCK IX above (included in Block X above) and agree to accept theseShare(s) or whatever lesser number of Share(s) allotted by the Directors.

• I/We agree to accept the "Equity Shares" allotted to me/us and to hold such "Equity Share" upon the terms and conditionsof the said Letter of Offer and subject to the provisions of the Companies Act, 1956, the Memorandrum and Articles ofAssociation of the Company and the Equity Shares to be issued in this regard. I/We authorise you to place my/our name(s)on the Register of Members.

• I/We undertake that I/we will sign all such other documents and do all such acts, if any, necessary on my/our part to enableme/us to be registered as the holders of the Equity Shares in respect of which this application may be accepted.

• I/We also agree to accept the shares subject to laws, applicable guidelines, notifications and regulations relating to the issueof capital and listing of securities issued from time to time by SEBI/Government of India/RBI and/or other authorities.

• I/We hereby solemnly declare that I am/We are not applying for the Equity Shares in contravention of Section 269SS ofthe Income-Tax Act, 1961.

• I/We authorize you to place my/our name(s) in the "Register of Member".

Please tick ( üüüüü ) whichever is applicable.• I am / We are Indian National(s) resident in India and that I am/we are not applying for the

Equity Shares as nominee(s) of any person(s) who is/are resident outside India or ForeignNational(s) or a foreign company or a foreign controlled company.

• I am / We are Non Resident Indian who have made payments by way of a cheque drawn on NROAccount maintained in Mumbai or Rupee Draft purchased out of NRO Account maintainedelsewhere in India but payable at Mumbai.

• I am/We are Non-Resident Indian(s)/Person(s) of Indian Origin residing abroad and have made paymentsby demand draft/cheque payable at Mumbai or funds remitted from abroad in the following way :-• By Indian Rupee drafts purchased from abroad & payable at Mumbai or• By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in

Mumbai• Rupee draft purchased by debit to NRE/FCNR account maintained elsewhere in India & payable in

Mumbai• We are Foreign Institutional Investors(s) registered with SEBI and have remitted funds from

special Non-Resident Rupee Deposit Account.

ISSUE OF 2,25,00,000 EQUITY SHARES OF THE FACE VALUE OF Rs. 1 EACH AT A PREMIUM OF Rs. 7 PER SHARE FOR AN AMOUNTAGGREGATING TO Rs 18,00,00,000 ON RIGHTS BASIS TO THE EXISTING SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF ONEEQUITY SHARE FOR EVERY FOUR EQUITY SHARES HELD ON THE RECORD DATE , THAT IS ON 29TH SEPTEMBER, 2008

I/We understand that : i) in case of allotment of Equity Shares to me/us, my/ourBeneficiary Account as mentioned above would get credited to the extent of allotted shares.ii) in case of allotment of Equity Shares to me/us, if shares cannot be credited to my/ourBeneficiary Account for any reasons whatsoever, I/We will be given Physical Certificate(s) iii)if the names of applicants in this application are not identical and also not in the same order asthe Beneficiary Account details with the above mentioned DP, only physical certificates will beissued, and iv) The market lot for company's Equity Shares in Electronic Mode is one sharehowever for whatever reason if the company issues physical certificate, only oneconsolidated certificate will be issued for the entire holding under one folio.

[Signature(s) as per specimen recorded with the Company][In case of joint shareholders, all the Shareholders must sign in the same sequence as per the specimen recorded with the Company/Depository)

Depository Name

Depository Participant (DP) Name

DP-ID No.

Beneficiary Account Number NSDL

Beneficiary Account Number CDSL

NSDL CDSL

I N

Refund through RTGS : IFSC Code of the branch :

Electronic Form Physical Form Total

Total No. of Shares Applied For

( Incorporated on the 11th September, 1939 as a Limited Company, under the Indian Companies Act, 1913 as amended upto 1936 by Act XXII of 1936.)

Registered Office: Mahaveer Nagar, Sangli-416 416,(Maharashtra) • Tel No.0233-2623716,2623717; Fax No.0233-2623617.

Contact Person: Mr. B.G. Kulkarni, Company Secretary and Compliance Officer

E-mail: [email protected] website: www.ugarsugar.com

Factory and Administrative Office: Ugarkhurd 591 316 (Dist-Belgaum) • Tel No.08339-272230 Fax No.08339-272232

NUMBER OF EQUITY SHARES HELD

ON RECORD DATE

[BLOCK I]

NUMBER OF EQUITY

SHARES OFFERED

[BLOCK II]

NO. OF EQUITY

SHARES ACCEPTED

[BLOCK III]

NUMBER OF ADDITIONAL EQUITY

SHARES APPLIED FOR

[BLOCK IV]

TOTAL NUMBER OF EQUITY SHARES

APPLIED FOR

[BLOCK V (BLOCK III+IV)]

TOTAL AMOUNT PAYABLE

@ Rs. 8 per Share

[BLOCK VI (BLOCK V x Rs. 8)]

THE UGAR SUGAR WORKS LIMITEDRegistered Office: Mahaveer Nagar, Sangli-416 416,(Maharashtra) • Tel No.0233-2623716,2623717; Fax No.0233-2623617.

Contact Person: Mr. B.G. Kulkarni, Company Secretary and Compliance OfficerE-mail: [email protected] website: www.ugarsugar.com

Contact Details of Sole / First Joint Applicant Phone/Mobile No.: Email Address:

IN CASE OF POSTAL APPLICATION WHERE PAYMENT IS MADE BY DRAFT (Please Refer Instruction No. 1)GROSS AMOUNT PAYABLE (AS IN BLOCK XI) Rs. _____________________________________LESS : DEMAND DRAFT AND POSTAL CHARGES Rs. __________________________________________NET AMOUNT PAID (IN FIGURES) Rs. _____________________________________(IN WORDS) __________________________________________________________________________

Details of Nominee : Name _________________________________________

Address ___________________________________________________________

If minor, Date of Birth _______________ Name of the Guardian __________________

Refer Instruction No. 5

19

PAYMENT DETAILSAmount paid Rs................................................................Rupees(in words)............................................................................................by Cash/Cheque/Bank Draft No. .......................................Dated ..............................Drawn on (Bank Name) .........................................................................................................................................Branch ............................................................................................................................................................

Permanent Account No. (PAN)Please refer Instruction No. 3 4

Sole/First Joint Applicant

Second Joint Applicant


IN CASE OF POSTAL APPLICATION WHERE PAYMENT IS MADE BY DRAFT (Please Refer Instruction No. 1)

GROSS AMOUNT PAYABLE (AS IN BLOCK VI) Rs. _____________________________________

LESS : DEMAND DRAFT AND POSTAL CHARGES Rs. __________________________________________

NET AMOUNT PAID (IN FIGURES) Rs. _____________________________________

(IN WORDS) __________________________________________________________________________

Details of Nominee : Name _________________________________________

Address ___________________________________________________________

If minor, date of Birth _______________ Name of the Guardian __________________

Refer Instruction No.5

PAYMENT DETAILS

Amount paid Rs................................................................Rupees(in words)......................................................

......................................by Cash/Cheque/Bank Draft No. .......................................Dated ..............................

Drawn on (Bank Name) .........................................................................................................................................

Branch ............................................................................................................................................................

Permanent Account No. (PAN)

Sole/First Joint Applicant

Second Joint Applicant


Please refer Instruction No. 3

THE UGAR SUGAR WORKS LIMITED

Phone/Mobile No.: Email Address:

NUMBER OF SPLITFORMS (A)

LAST DATE FOR REQUESTS FOR

SPLIT APPLICATION FORMS

NOVEMBER 24, 2008

TO BE FILLED BY THE FIRST APPLICANT IN CASE APPLICATION IS SENT BY POST

NAME:

ADDRESS:

PIN CODE

Unless otherwise notified all future communication regarding the issue should be addressed to the Registrars to the Issue quoting Full Name of the First Applicant, Reg. Folio

No., Serial No. of the CAF, No. of Equity Shares entitled and applied for, Date and Name of the Bank and Branch with which the application was lodged.

REGISTRAR TO THE ISSUEBigshare Services Private Limited

E/2, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri (E), Mumbai - 400 072• Tel: +91-22-404 30 200; • Fax: +91-22-28475207• Website: www.bigshareonline.com

• E-Mail: [email protected] • Contact person:Mr.Ashok Shetty

If you wish to Split the CAF, fill in this part of the form and send the entire CAF to the Registrars to the Issue viz.Bigshare Services Private Limited, E/2, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri (E), Mumbai - 400 072• Tel: +91-22-404 30 200; • Fax: +91-22-28475207• Website: www.bigshareonline.com• E-Mail: [email protected]• Contact person:Mr.Ashok Shetty

The Board of Directors,

THE UGAR SUGAR INDUSTRIES LIMITED


Dear Sirs,

Pursuant to the Company's Letter of Offer dated October 24, 2008 and the attached abridged version thereof, please send me/us Split Formsas detailed below :

No. of Shares (From Block II Part A overleaf)

Notes: 1) Request for Split Forms will be entertained only if it is made in this form. 2) Split Forms cannot be re-split. 3) Request for Split Forms will not be entertained from Renouncee(s).

4) Request for Split Forms will be entertained only once. 5) Request for Split Forms should not be sent to the Company or to the Lead Manager.

_________________________ _________________________ _________________________

Sole / First Joint Applicant Second Joint Applicant Third Joint Applicant

INSTRUCTIONS

PART 'D' – REQUEST FOR SPLIT APPLICATION FORMS

NO. OF EQUITY SHARES DESIREDIN EACH SPLIT FORM (B)

TOTAL NO. OF EQUITY SHARES(A) x (B) = (C)

TOTAL** Total in (C) in above table must agree with BLOCK II of Part ASignature in the same sequence as per specimen(s) recorded with the Company/Depository

APPLICATIONS WILL BE COLLECTED AT THE FOLLOWING BRANCHES

Date .............................

Bankers to the Issue : S-266, Greater Kailash – II, New Delhi - 110048.

Note : Applicants residing at places other than those mentioned in the CAF and applicants who wish to send their applications by REGISTERED POST arerequested to send their applications directly to the Registrar to the Issue together with their Demand Draft (net of bank and postal charges) drawn in favourof “The Ugar Sugar Rights Issue A/c” crossed “A/c Payee only”payable at Mumbai, so as to reach them on or before the closure of the issue. The Companyis not responsible for any postal delay/loss in transit and applications received through mail after the closure of the issue and those application are liable tobe rejected and returned to the applicant. Applications through mail should not be sent in any other manner except as mentioned above. The CAF(s) alongwiththe Application Money must not be sent to the Lead Manager or the Company except as stated otherwise. The Applicants are requested to strictly adhere tothese instructions. No shares will be offered to Non Residents Indian on Repartriable basis. For Non Residents applying on Non Repartriable basis all cheques/drafts submitted by NRI shareholders should be drawn in favour of "The Ugar Sugar Rights issue account" crossed “A/c Payee only”payable at Mumbai.

Renounces who are NRI/FII/Non Resident should submit their application, either by hand delivery or by registered post with acknowledgment to Bigshare Services Private Limited only atthe below mentioned address.

Collecting Branch for Non - Resident shareholders applying on repatriable basis : NI & SS Div B S Marg, Fort , Mumbai – 400 023.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

INSTRUCTIONS FOR FILLING UP COMPOSITE APPLICATION FORM

Authorised Collection Centres for Resident Applicants :

BOB Capital Markets Limited.(Wholly owned subsidiary of Bank of Baroda)Ground and First floor, Meher Chambers,Dr. S.B. Marg, Off R. Kamani Marg,Mumbai-400 038Tel: 022-6637 2301-04; Fax: 022-6637 2312E-mail: [email protected] Person: Mr. Y.K. Garg

BIGSHARE SERVICES PRIVATE LIMITEDE/2, Ansa Industrial Estate, Sakivihar Road,Sakinaka, Andheri (E), Mumbai - 400 072Tel: +91-22-404 30 200; Fax: +91-22-28475207Website: www.bigshareonline.comE-Mail: [email protected] person:Mr.Ashok Shetty

FOR NON RESIDENT APPLICANT : NON RESIDENT APPLICANT MUST SUBMIT THEIR APPLICATION TO ABOVE MENTIONED THREE BANKS AT MUMBAI. OR REGISTRAR TO THE ISSUE, BIGSHARE SERVICESPVT. LTD, AT THE ADDRESS MENTIONED BELOW.

AXIS BANK LIMITED: BANK OF BARODA: UNION BANK OF INDIA:

'Z''Z''Z''Z''Z'

Branches of Axis Bank Limited, Bank of Baroda & Union Bank of India.

Option Option Available Action Required

A. Accept whole or part of your entitlement without renouncing the balance.

Fill in and sign Part A (All joint holders must sign)

B. Accept your entitlement in full and apply for additional Equity Shares Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

C. Accept only a part of your entitlement of the Equity Shares offered to you (without renouncing the balance)

Fill and sign Pat A of the CAFs

D. Renounce your entitlement in full to one person (Joint renouncees not exceeding three are considered as one renouncee).

Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign)

E. 1. Accept a part of your entitlement and renounce the balance to one or more renouncee(s) OR 2. Renounce your entitlement to all the Equity Shares offered to you to more than one renouncee

Fill in and sign Part D (all joint holders must sign) requesting for Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below. (i) For the Equity Shares you wish to accept, if any, fill in and sign Part A of one split CAF (only for option 1). (ii) For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand over the split CAFs to the renouncees. (iii) Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

F. Introduce a joint holder or change the sequence of joint holders This will be treated as a renunciation. Fill in and sign Part B and the renounces must fill in and sign Part C.

(a) Please read the instructions printed on the enclosed CAF carefully.

(b) Application should be made on the printed CAF, provided by our Company except as mentionedunder the head Application on Plain Paper and should be completed in all respects. The CAFfound incomplete with regard to any of the particulars required to be given therein, and/ orwhich are not completed in conformity with the terms of this Letter of Offer are liable to berejected and the money paid, if any, in respect there-of will be refunded without interest andafter deduction of bank commission and other charges, if any. The CAF must be filled in Englishand the names of all the applicants, details of occupation, address, father’s husband’s namemust be filled in block letters.

(c) The CAF together with cheque / demand draft should be sent to the Bankers to the Issue /Collecting Bank or to the Registrar to the Issue and not to our Company or Lead Manager tothe Issue. Applicants residing at places other than cities where the branches of the Bankers tothe Issue have been authorised by our Company for collecting applications, will have to makepayment by Demand Draft payable at Mumbai and send their application forms to the Registrarsto the Issue by REGISTERED POST. If any portion of the CAF is / are detached or separated,such application is liable to be rejected.

(d) PAN / GIR Number: Applications by the applicant or in the case of application in joint names,each of the applicants, should mention his/ her PAN number allotted under the Income-Tax Act,1961 or a communication from the Income Tax authority indicating allotment of PAN

(“PAN Communication”) along with the application for the purpose of verification of the number.Applicants who do not have PAN are required to provide a declaration in Form 60 / Form 61prescribed under the IT Act along with the application. Application Forms without PAN / GIRNumber/PAN Communication/ declaration will be considered incomplete and are liableto be rejected.

(e) Bank Account Details: It is mandatory for applicants to provide information as to their savings/current account number and the name of our Company with whom such account is held in theCAF to enable the Registrar to the Issue to print the said details in the refund orders, if any,after the names of the payees. Application not containing such details is liable to be rejected.

(f) Payment by cash: The payment against the application should not be effected in cash if theamount to be paid is Rs. 20,000 or more. In case payment is effected in contravention of this,the application may be deemed invalid and the application money will be refunded and nointerest will be paid thereon. Payment against the application if made in cash, subject toconditions as mentioned above, should be made only to the Bankers to the Issue.

(g) Signatures should be either in English or Hindi or in any other language specified in the EightSchedule to the Constitution of India. Signatures other than in English or Hindi and thumbimpression must be attested by a Notary Public or a Special Executive Magistrate under his/ herofficial seal. The Equity Shareholders must sign the CAF as per the specimen signature recordedwith our Company or depositories.

(h) In case of an application under power of attorney or by a body corporate or by a society, acertified true copy of the relevant power of attorney or relevant resolution or authority to thesignatory to make the relevant investment under this Issue and to sign the application and acopy of the Memorandum and Articles of Association and / or bye laws of such body corporateor society must be lodged with the Registrar to the Issue giving reference of the serial numberof the CAF. In case the above referred documents are already registered with our Company,the same need not be a furnished again. In case these papers are sent to any other entitybesides the Registrar to the Issue or are sent after the Issue Closing Date, then the applicationis liable to be rejected. In no case should these papers be attached to the application submittedto the Bankers to the Issue.

(i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same orderand as per the specimen signature(s) recorded with our Company. Further, in case of jointapplicants who are renouncees, the number of applicants should not exceed three. In case ofjoint applicants, reference, if any, will be made in the first applicant’s name and all communicationwill be addressed to the first applicant.

(j) Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroadfor allotment of Equity Shares shall, inter alia, be subject to conditions, as may be imposed fromtime to time by the RBI under FEMA in the matter of refund of application money, allotment ofEquity Shares, subsequent issue and allotment of Equity Shares, interest, export of sharecertificates, etc. In case a Non-Resident or NRI Equity Shareholder has specific approval fromthe RBI, in connection with his shareholding, he should enclose a copy of such approval withthe CAF.

(k) All communication in connection with application for the Equity Shares, including any changein address of the Equity Shareholders should be addressed to the Registrar to the Issue priorto the date of allotment in this Issue quoting the name of the first / sole applicant EquityShareholder, folio numbers and CAF number. Please note that any intimation for change ofaddress of Equity Shareholders, after the date of allotment, should be sent to the Registrar tothe issue, in the case of Equity Shares held in physical form, and to the respective depositoryparticipant, in case of EquityShares held in dematerialized form.

(l) Split forms cannot be re-split.

(m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s)shall be entitled to obtain split forms.

(n) Applicants must write their CAF number at the back of the cheque / demand draft.

(o) Only one mode of payment per application should be used. The payment must be either in cashor by cheque / demand draft drawn on any of the banks, including a co-operative bank, whichis situated at and is a member or a sub member of the Bankers Clearing House located at thecentre indicated on the reverse of the CAF where the application is to be submitted.

(p) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts orpost-dated cheques and postal / money orders will not be accepted and applications accompaniedby such cheques / demand drafts / money orders or postal orders will be rejected. The Registrarwill not accept payment against application if made in cash. (For payment against applicationin cash please refer point (f) above).

(q) No receipt will be issued for application money received. The Bankers to the Issue / CollectingBank/ Registrar will acknowledge receipt of the same by stamping and returning theacknowledgment slip at the bottom of the CAF.

Grounds for Technical Rejections

Applicants are advised to note that applications are liable to be rejected on technical grounds,including the following:

• Amount paid does not tally with the amount payable by the applicant;

• In case of physical shareholders, bank account details (for refund) are not given;

• Age of first applicant not given;

• PAN Number not given;

• In case of application under power of attorney or by limited companies, corporate, trust, etc.,relevant authority documents are not submitted;

• If the signature of the existing Equity Shareholder does not match with the one given on theapplication form and in case of renounces, if the signature does not match with the recordsavailable with their depositories;

• If the applicant desires to receive the Equity Shares in electronic form and the application formdoes not have the applicant’s depository account details;

• Application forms are not submitted by the applicant within the time prescribed as per theapplicationform and the Letter of Offer;

• Applications not duly signed by the sole/joint applicants;

• Applications by OCBs unless accompanied by specific approval from the RBI permitting theOCBs to participate in the Issue;

• Applications accompanied by stock invest;

• In case no corresponding record is available with the Depositories that matches three parameters,namely,

names of the applicants (including the order of names of joint holders), the Depositary Participant’sidentity (DP ID) and the beneficiary’s identity;

• Applications by ineligible non-residents (including on account of restriction or prohibition underapplicable local laws) and where last available address in India has not been provided.

• Multiple Applications

Disposal of application and application money

No acknowledgment will be issued for the application monies received by our Company. However, theBankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stampingand returning the acknowledgment slip at the bottom of each CAF.

The Board reserves its full, unqualified and absolute right to accept or reject any application, in wholeor in part, and in either case without assigning any reason thereto.

In case an application is rejected in full, the whole of the application monies received will be refunded.Wherever an application is rejected in part, the balance of application money, if any, after adjusting anymoney due on Equity Shares allotted, will be refunded to the applicant within six (6) weeks from the closeof the Issue in accordance with section 73 of the Act.

For further instruction, please read the Composite Application Form (CAF) carefully.

Utilisation of Issue Proceeds

The Board of Directors declares that:

(i) The funds received against this Issue will be transferred to a separate bank account other than thebank account referred to in sub-section (3) of Section 73 of the Act.

(ii) Details of all monies utilised out of the Issue shall be disclosed under an appropriate separate headin the balance sheet of our Company indicating the purpose for which such monies have beenutilised.

(iii) Details of all such unutilised monies out of the Issue, if any, shall be disclosed under anappropriateseparate head in the balance sheet of our Company indicating the form in which suchunutilised monies have been invested.

The funds received against this Issue will be kept in a separate bank account. Our Company wouldhave no access to such funds unless it satisfies the Designated Stock Exchange with suitabledocumentary evidence that the minimum subscription of 90% of the issue has been received.

Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders

Our Company agrees that as far as possible the allotment of the Equity Shares shall be made within thirty(30) days of the closure of Issue. Our Company further agrees that it shall pay interest at the rate of 15%per annum if the allotment has not been made and/or the refund orders have not been dispatched to theinvestors or if, in a case where the refund or portion thereof is made in electronic manner, the refundinstructions have not been given to the clearing system in the disclosed manner within thirty (30) daysfrom the date of closure of the Issue.

Undertakings by our Company

1. The complaints received in respect of the Issue shall be attended to by our Company expeditiouslyand satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at allstock exchanges where the Equity Shares to be issued pursuant to this Issue are to be listed willbe taken within seven (7) working days of finalization of basis of allotment.

3. The Refund Order/ Warrnts will be despatched to the unsuccessful applicants withine 30 days fromthe closure of the issue and the funds required for dispatch of refund to unsuccessful applicantsshall be made available to the Registrar to the Issue by our Company.

4. The certificates of the securities/ refund orders to the non-resident Indians shall be dispatchedwithin the specified time.

5. No further issue of securities affecting equity capital of our Company shall be made till thesecurities issued/offered through the Issue are listed or till the application monies are refunded onaccount of non- listing, etc.

6. Our Company accepts full responsibility for the accuracy of information given in this Letter of Offer

and confirms that to best of its knowledge and belief, there are no other facts the omission of whichmakes any statement made in this Letter of Offer misleading and further confirms that it has madeall reasonable enquiries to ascertain such facts.

7. All information shall be made available by the Lead Manager and the Issuer to the Equity Shareholdersat large and no selective or additional information would be available for a section of the investorsin any manner whatsoever including at road shows, presentations, in research or sales reports etc.

8. The Issuer and Lead Manager shall update the Letter of Offer and keep the investors informed ofany material changes till the listing and trading commences.

Important

• Please read this Letter of Offer carefully before taking any action. The instructions contained inthe accompanying CAF are an integral part of the conditions of this Letter of Offer and must becarefully followed; otherwise the application is liable to be rejected.

• All enquiries in connection with this Letter of Offer or accompanying CAF and requests for SplitApplication Forms must be addressed (quoting the Registered Folio Number/ DP and Client IDnumber, the CAF number and the name of the first Equity Shareholder as mentioned on the CAFand superscribed THE UGAR SUGAR RIGHTS ISSUE on the envelope) to the Registrar to the Issueat the following address:

BIGSHARE SERVICES PRIVATE LIMITED

E/2, Ansa Industrial Estate, Sakivihar Road,

Sakinaka, Andheri (E), Mumbai - 400 072

Tel: +91-22-404 30 200

Fax: +91-22-28475207

Website: www.bigshareonline.com

E-Mail: [email protected]

Contact person:Mr.Ashok Shetty

• It is to be specifically noted that this Issue of Equity Shares is subject to the section entitled ‘RiskFactors’ beginning on page 6 of this Letter of Offer.

Period of Subscription

The Issue will be kept open for period of Sixteen (16) days or for such longer period as our Company maydetermine, subject to such period not exceeding thirty (30) days.

Details of Adverse Events affecting our Company since the last financial statement

In the Opinion of Directors there have not arisen any circumstances since the date of lastfinancial statements as disclosed on the offer document and which materially and adverselyaffect or is likely to affect the trading or profibility of the issuer company, or the value of itsassets, or its ability to pay its liabilities within the next twelve months.

Material Developments

Save as stated in the Letter of Offer, there are no material developments after the last date oflast financial statements. Further there are no changes in the activities of the issuer companywhich may have had a material effect on the statement of profit/loss for the five years.

FOR FURTHER DETAILS PLEASE READ THE LETTER OF OFFER CAREFULLY

Union Bank of India :

Belgaum, Coimbatore, Kolhapur, Pune, Karad, Sangli, Kudachi, Ugar, Nipani, Mangalore, Mumbai, Mysore,Nagpur

Bank of Baroda:

Allahabad, Bangalore, Belgaum, Bhopal, Kanpur, Kolhapur, Lucknow, Mumbai, Nashik, Pune, Sangli, Hubli.

Axis Bank of India:

Ahmedabad, Athani, Bangalore, Belgaum, Bhuvaneshwar ,Chennai, Ernakulam/ Cochin, Guwahatti,Hyderabad, Indore, Jaipur, Kolhapur, Kolkata, Ludhiana, Mumbai, New Delhi, Patna, Pune, Rajkot, Surat,Vadodara, Satara, Sangli, Panjim.

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY

LETTER OF OFFER

THE UGAR SUGAR WORKS LIMITED ( Incorporated on the 11th September, 1939 as a Limited Company, under the Indian Companies Act, 1913

as amended upto 1936 by Act XXII of 1936.) Registered Office: Mahaveer Nagar, Sangli-416 416,(Maharashtra)

Tel No.0233-2623716,2623717; Fax No.0233-2623617. Contact Person: Mr. B.G. Kulkarni, Company Secretary and Compliance Officer

E-mail: [email protected] website: www.ugarsugar.com Factory and Administrative Office: Ugarkhurd 591 316 (Dist-Belgaum)

Tel No.08339-272230 Fax No.08339-272232 ISSUE OF 2,25,00,000 EQUITY SHARES OF THE FACE VALUE OF Rs. 1 EACH AT A PREMIUM OF Rs. 7 PER SHARE FOR AN AMOUNT AGGREGATING TO Rs 18,00,00,000 ON RIGHTS BASIS TO THE EXISTING SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF ONE EQUITY SHARE FOR EVERY FOUR EQUITY SHARES HELD ON THE RECORD DATE , THAT IS ON 29TH SEPTEMBER, 2008

GENERAL RISKS Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of loosing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including the risk involved. The securities have not been recommended or approved by the Securities Exchange Board of India, (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to section titled “Risk Factors” beginning on page 6 of this Letter Of Offer before making an Investment in this issue.

ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter Of Offer contains all information with regards to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and the intentions expressed herein are honestly held and that there are no facts, the omission of which makes this Letter of Offer as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING The existing equity shares of our Company are listed on the Bombay Stock Exchange Limited. Our Company has received in-principle approval from Bombay Stock Exchange Limited by letter no. DCS/PREF/JA/IP-RT/3722/07-08 dated March 28, 2008 granting in-principle approval for listing the securities arising from this Issue. For the purpose of this Issue the Designated Stock Exchange is Bombay Stock Exchange Limited. LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE

BOB CAPITAL MARKETS LIMITED. (Wholly owned subsidiary of Bank of Baroda) Ground and First floor, Meher Chambers, Dr. S.B. Marg, Off R. Kamani Marg, Mumbai-400 038 Tel: 022-6637 2301-04; Fax: 022-6637 2312 E-mail: [email protected] Contact Person: Mr. Y.K. Garg

BIGSHARE SERVICES PRIVATE LIMITED E/2, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri (E), Mumbai - 400 072 Tel: +91-22-404 30 200; Fax: +91-22-28475207 Website: www.bigshareonline.com E-Mail: [email protected] Contact person:Mr.Ashok Shetty

ISSUE PROGRAMME ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS ISSUE CLOSES ON

17.11. 2008 24.11. 2008 02.12.2008

1

TABLE OF CONTENTS

Sr. No. Particulars Page No.

1 Definitions and Abbreviations 2

2 Presentation of Financial Information and Use of Market Data 4

3 Forward Looking Statements 5

4 Risk Factors 6

5 Summary 13

6 General Information 19

7 Capital Structure 23

8 Objects of the Issue 33

9 Basic Terms of Issue 45

10 Basis for the Issue Price 47

11 Tax Benefits 49

12 Industry Overview 54

13 Business Overview 59

14 Corporate Structure and Management 74

15 Promoters 84

16 Financial Information 86

17 Details of Group Companies 122

18 Management’s Discussion and Analysis 160

19 Outstanding Litigations and Material Developments 168

20 Other Regulatory and Statutory Disclosures 178

21 Stock Market Data 183

22 Government Approvals 184

23 Dividend Policy 186

24 Terms of Present Issue 187

25 Main Provisions of the Articles of Association of our Company 204

26 Material Contracts and Documents for Inspection 217

27 Declaration 218

2

DEFINITIONS AND ABBREVIATIONS In this Letter of Offer, the terms “we”, “us”, “our”, “Our Company”, “ The Company”, “Ugar”, "TUSWL", "USWL" or "USW" unless the context otherwise implies, refers to The Ugar Sugar Works Limited. All references to “Rs” or “INR” refer to Rupees, the lawful currency of India, ‘USD” or “US$” refers to United States Dollar, the lawful currency of United States of America, and “€” refers to Euro, the lawful currency of European Union. References to the singular also refer to the plural and one gender also refers to the other gender, wherever applicable. The words “Lakhs” or“Lacs” means “100 Thousand” and the word “million” or “mn” means “10 Lacs” and the word “crore” means “10 million” or “100 Lacs”. Any discrepancies in any table between total and the sums of the amounts listed are due to rounding off. Conventional/ General Terms:

AGM Annual General Meeting EPS Earnings Per Share FEMA Foreign Exchange Management Act,1999 FIIs Foreign Institutional Investors registered with SEBI

under applicable laws. FY Financial year ending March 31. (2003 to 2006

Financial years ended on September 30) GoI Government of India IT Act Income-tax Act, 1961 and amendments thereto NAV Net Asset Value NR Non Resident NRI(s) Non Resident Indian(s) OCB(s) Overseas Corporate Body(ies) RBI Reserve Bank Of India RoC Registrar of Companies SEBI Securities & Exchange Board of India SEBI Act, 1992 Securities Exchange Board of India Act, 1992 and

amendments thereto SEBI DIP Guidelines The Guidelines for Disclosure and Investor Protection

issued by SEBI on January 19, 2000 read with amendments issued there after from time to time till the date of filing this Letter of Offer with SEBI

Takeover Code The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997 as amended to date

The Act The Companies Act, 1956 and amendments thereto from time to time

Offering-related Terms:

Bankers to the Issue Axis Bank Limited, Bank of Baroda & Union Bank of India.

BSE Bombay Stock Exchange Limited CAF Composite Application Form CDSL Central Depository Services ( India) Limited DP Depository Participant Designated Stock Exchange “Designated Stock Exchange” means a stock

exchange in which securities of the company are listed or proposed to be listed and which is chosen by the company for purposes of a particular issue under SEBI DIP Guidelines. For the present rights issue it being Bombay Stock Exchange Limited.

Issue Opening Date 17.11.2008 Issue Closing Date 02.12.2008 Issue Price Rs. 8

3

Lead Manager BOB Capital Markets Limited Offer Document Letter of Offer Letter of Offer Letter of Offer circulate to the shareholders of The

Ugar Sugar Works Limited. NSDL National Securities Depository Ltd Record Date 29th September, 2008 Registrar to the Issue or Registrar Bigshare Services Private Limited Renouncees The persons who acquire Rights Entitlement from

Equity Shareholders Rights Entitlement The number of securities that a shareholder is entitled

to in proportion to his/her shareholding in our company on the Record Date

Rights Issue “Rights Issue” means an issue of capital under Sub-section (1) of Section 81 of the Companies Act, 1956, to be offered to the existing shareholders of the company on rights basis based on terms of this Letter of Offer

The Offer or The Issue Issue of 22500000 Equity Shares of the Face Value of Rs. 1 each at a premium of Rs. 7 per equity share for an amount aggregating to Rs 18,00,00,000 on Rights Basis to the existing shareholders of our company in the ratio of 1 Fully paid Equity Share for every 4 Equity Shares held by an existing shareholder on the record date, ie on 29th September, 2008

Company/ Industry-related Terms:

AICRP All India Coordinator Research Projects Articles, AoA Articles of Association of Our Company Auditors Refers to M/s. P.G.Bhagwat Chartered Accountants

unless otherwise specified Board or Board of Directors Board of Directors of Our Company or a

Committee(s) thereof CAGR Compounded Annual Growth Rate Capital or Share Capital Capital of our company CIMMYT Centro International de Mejora Miento de Maize y Trigo Equity Share(s) or Share(s) Ordinary shares of our company which are listed on

BSE Equity Shareholders Investors holding the Equity Shares of our Company ICARDA International Center for Agricultural Research in the Dry

Areas IMFL Indian Made Foreign Liquor Investor(s) Means holder(s) of equity shares of our company as

on the Record date ie [29th September, 2008] and Renouncees

MACS Maharashtra Association for the Cultivation of Science

Memorandum Memorandum of Association of our Company MoU Memorandum of Understanding Promoter Shri. R.V. Shirgaokar, Shri. P.V. Shirgaokar, Shri.

S.S. Shirgaokar Registrar and Share Transfer Agent

Bigshare Services Private Limited

The Ugar Sugar Works Limited or the Company or Ugar or our Company or the Issuer

The Ugar Sugar Works Limited, a company incorporated on September 11, 1939 under the Indian Companies Act, 1913.

TCD Tons Crushed per Day

4

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA In this Letter of Offer, unless the context otherwise requires, all references to one gender also refers to another gender and the word "Lakh" or "Lac" means "one hundred thousand" and the word "million" means "ten lac" and the word "Crore" means "ten million". In this Letter of Offer, any discrepancies in any table between total and the sum of the amounts listed are only due to rounding-off. Throughout this Letter of Offer, all figures have been expressed in Lacs or Lakh unless otherwise stated. All references to “India” contained in this Letter of Offer are to the Republic of India. For additional definitions used in this Letter of Offer, see the section “Definitions” on page 2. In the section entitled “Main Provisions of Articles of Association” on page 204 of this Letter of Offer, defined terms have the meanings given to such terms in the Articles of Association of the Company. Industry data used throughout this Letter of Offer has been obtained from industry publications and other published data. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe industry data used in this Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company reports, while believed by us to be reliable, have not been verified by any independent sources CURRENCY OF PRESENTATION In this Letter of Offer, all references to “Rupees” and “Rs.” are to the legal currency of India,

5

FORWARD LOOKING STATEMENTS AND MARKET DATA

This Letter of Offer contains certain forward-looking statements. These forward-looking statements generally can be identified by words or phrases like “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions, that are “forward looking statements”. Similarly, statements that describe our objectives, plans or goals are also forward-looking statements. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include but are not limited to: • General economic and business conditions in India; • Our ability to successfully implement our growth strategy and expansion plans; • Our ability to respond to technological changes; • Changes in laws and regulations relating to the industry in which we operate; • Changes in political and social conditions in India; • The loss of our key employees and staff; • Any adverse outcome in the legal proceedings in which our Company is involved; and • The loss or shutdown of operations of our Company at any time due to strike or labour unrest or otherwise • The occurrence of natural disasters or calamities affecting the areas in which we have our operations. For further discussion of factors that could cause our actual results to differ, refer to the section titled “Risk factors” beginning on page 6 of this Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither we, our Directors, Merchant Banker, nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date thereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, the Merchant Banker and we will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges in respect of the Equity Shares offered through this Issue. Market data used throughout this Letter of Offer was obtained from our internal Company reports, data, websites and industry publications. Industry publication data and website data generally state that the information contained therein has been obtained from sources believed to be reliable, but that their accuracy and completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Although, we believe market data used in this Letter of offer is reliable, it has not been independently verified. Similarly, internal Company reports and data, while believed by us to be reliable, have not been verified by any independent source.

6

RISK FACTORS

An Investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in this Letter of Offer, including the risks and uncertainties described below, before making an investment in our Equity Shares. If any of the following risks actually occur, our business, results of operations and financial condition could suffer, the price of our equity shares could decline, and you may lose all or part of your investment. The financial and other implications of material impacts of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However there are a few risk factors where the impact is not quantifiable and hence the same has not been disclosed in such risk factors. This Letter of Offer also includes statistical and other data regarding to Indian Sugar Industry. This data was obtained from industry publications, reports and other sources that we and the Lead Manager believe to be reliable. Neither the Lead Manager nor we have independently verified such data. Internal Risk Factors: 1. LITIGATION INVOLVING CRIMINAL LAWS Mr. R V Shirgaokar – Chairman & Managing Director and Mr. P. V. Shirgaokar- Executive Director

2. The object of the Issue is to repay the clean loan obtained from Bank of India of Rs. 15 crore taken for equity contribution to M/s. Sadashiva Sugars Ltd. The Company is holding 49% stake in M/s. Sadashiva Sugars Ltd. Sadashiva Sugars Ltd., is being a new project, the Company may not earn any profit in the initial periods and we may not receive any dividend from this investment. Since the investment in shares is less than 50%, there is likely that Company cannot exercise full control over this Company. 3. We have suffered losses from operations in the Sugar Segment during the first six months of the current year and during the earlier two financial years. As the price to be paid for the raw material i.e. sugar cane and the sale of sugar are regulated by the Government we cannot assure that our operations in the Sugar Segment will be continuously profitable in future. We have suffered net losses from its operations during the first six months of 2007-08. Operations in the Sugar Segment had suffered losses in the FY ended 31.03.2007 and 30.09.2006 as well. This has been due to steep fall of almost 25% in the prices of Sugar. There is also lack of alignment between sugarcane and sugar prices .Sugar Industry is a cyclical industry and sugar production is influenced by excesses and shortages while the payment to sugar cane growers and sale of sugar are regulated by the Government. Though our activities are diversified and we have revenues from three different Segments such as Sugar, Power Generation and Distillery our main activity is manufacturing and sale of Sugar. Since the pricing of raw material and the sale of sugar are not within our control we have suffered losses in the past and cannot assure of profitable operations continuously in future. 4. For the six months period ended on 30th September, 2007, our Company has incurred a net loss of Rs. 1848.18 Lakh due to low realization of sugar prices and payment of higher cane price.

Sr. No.

Case No. & Institution

date

Plaintiff/defendant Name of the Court

Amount involved

Subject matter of the case and relief sought

Status as on date

1. 350/97 Pollution Control Board., Govt of Karnataka Vs. USWL & R V Shirgaokar, P V Shirgaokar

CJM Belgaum

Not Quantifiable

For not providing Effluent

treatment plant

Next date to be fixed

7

5. There are litigations involving our company, our promoters and Directors pending before the various adjudicating authorities and the results from all these litigations may not be favourable to us and therefore could adversely affect the results of our operations. There are litigations pending under various statutes before various courts and other adjudicating authorities which are filed by and/or against the company, its promoters and/or Directors. While we have taken all necessary steps to pursue/defend these cases suitably, we cannot assure that all these cases will be decided in favour of the company and/or its promoters/directors. Any adverse decision in any of these cases could adversely affect the results of our operations.

Brief Details of Outstanding Litigations Sr No

Types of Cases Total No of Cases

by/against Company

Total amount involved (Rs. In Lakh)

Total No of Cases

by/against Promoters

Total amount involved

(Rs. In Lakh)

1 Criminal *6 37.72 1 ------ 2 Civil *6 433.7 ------- ------ 3 Arbitration 1 283.85 ------- ------ 3 Income Tax 1 208.98 ------- ------ 4 Central Excise/ State

Excise/ Service Tax 7 194.01 ------ ------

5 Central/State Sales tax *1 18.64 ------ ------ 6 Securities Laws/

Economic Laws ------ ------ 2 172

7 Company Law ------ ------ ------ ------ 8 Litigations against

Directors ------ ------ ------ ------

9. Labour Cases 5 6.55 ------ ------

* Filed by the Company ** Out of 6 only 2 cases filed against the Company

Sr No


by/against Directors


Total No of Cases

by/against Group

Companies


(Rs. In Lakh)

1 Securities/ Income Tax/Company Law/Directors

------- ------- ------- ------

2 Criminal Cases/Civil Cases

------- ------ ------ ------

3. Labour/Industrial Cases ------- ------ 24 **Not Ascertainable

4. Central/State Sales tax ------- ------ 7 1.17 5. Central Excise ------- ------ 8 136.61

** Amount not quantifiable as the cases relates to Unfair Labour Practice and the fine cannot be ascertained until the matter is decided.

6. One of the projects implemented by us for manufacturing of sugar ships has not been able to commence commercial production and generate adequate revenues to justify the investment in the project. As such we cannot assure that our investment in other such projects will be successful and will generate profits for the investors. We have set up a 100% Export Oriented Unit (EOU) to export sugar cubes in the form of Ships. We have 100% buy-back agreement with M/s. Fragies Verwaltungs GmbH & Co. KG, Germany, whose representatives are

8

supervising the manufacturing process. The agreement with the supplier of plant & machinery M/s. Klockner Hansel Processing GmbH, Hannover, Germany, provided for the maximum period of three weeks trial runs. However, this being a new and innovative product this has taken a long time. We are, therefore, unable to manufacture the guarantee number of sugar ships as per agreement. The representatives of manufacturers of machinery have visited the factory sometime last month and have promised to improve the production capacity in the next few weeks. 7. Two sugar units one at Tasgaon and one at Phaltan both in Maharashtra taken on lease and run by us suffered losses during 2005-06, 2006-07 and 2007-08. The results of the company have therefore been adversely affected during these years. 8. Some of the Group Companies, promoted by our promoters/ relatives of promoters have incurred loss in the previous years. Some of the Group Companies, promoted by our promoters/ relatives of promoters have incurred loss in the previous 5 years. The detailed figures of Profit/ Loss incurred in a particulars year(s) are as follows:

Name of Company 2008 2007 2006 2005 2004 Ugar Pipe Industries Pvt. Ltd 0 -115459 2,665 -4926 1,15,915 Shantaram Machineries Pvt. Ltd. 1,02,70,613 1,06,81,286 21,29,784 -375843 -1333758 Ugar Theatres Pvt. Ltd 38,618 21,384 1,99,681 -367955 -311944 S. B. Reshellers Pvt. Ltd 3,06,77,238 3,74,33,204 1,16,23,954 61,65,677 -4676954 Ugar Consultancy Ltd 10,79,452 12,02,000 -483000 89,462 2,24,796 Tara Tiles Pvt. Ltd. -1,48,909 5,22,326 -549447 -1072870 -91922 Sangli Fabricators Pvt. Ltd. -1,01,237 -224833 9,34,492 -69174 -388613 Tara Floorings Pvt. Ltd -2,86,940 2,34,599 3,63,084 -851159 -403113 Sadashiva Sugars Ltd 5,68,508 3,60,692 -47855 0 0 Sanjeev Shirgaokar Inv. Pvt. Ltd -97,687 8,17,005 1,73,937 2,50,671 24,693 Shishir Shirgaokar Inv. Pvt. Ltd. -1,23,281 8,59,959 1,80,225 3,30,047 1,11,025 Prafulla Shirgaokar Inv. Pvt. Ltd -58,630 7,30,870 2,20,558 2,89,261 95,980 Prabhakar Shirgaokar Inv. Pvt. Ltd 25,886 18,45,074 4,64,675 5,07,530 63,246

9. Three of our Independent Directors are also directors in the Group Companies, which are unlisted Companies. Shri. M. G. Joshi, Dr. M. R. Desai and Shri. V. Balasubramanian- Independent Directors of our Company are also Directors in M/s. Ugar Consultancy Limited belonging to Promoter Group, which is an unlisted Company and Dr. M. R. Desai is also a Director in M/s. Sadashiva Sugars Ltd in which we are making investment , which is also an unlisted Company. They have no pecuniary interest in these Companies.. 10. Sugar cane industry is an agro based industry and is subject to vagaries of nature, further there is always a risk of diversion of cane for khandsari and gur manufacturing, which affects availability of sugar cane for crushing. Sugar cane supply is dependent upon variety of factors namely rain fall, availability of irrigation facility. Excess or shortage of rain fall adversely affects the sugar cane supply. Khandsari or gur manufacturers are attracting the cane growers by giving higher price for their crop and early harvest is also an incentive to the farmers. Which may also affect cane supply.

9

11. Weather conditions and crop diseases can adversely affect sugarcane crop yields and sugar recovery rates for any given harvest and while we pay for the sugarcane at prescribed rates and as per competitive conditions, lower sugar recovery rate can adversely affect the results of our operations. 12. The Command Area proposed for the Sadashiva Sugar project needs to be developed for sugarcane growing. Though sugar cane growing has been started in a small way, it is expected to take 2-3 years to fully develop the area and until then sugar cane will have to be sourced from areas at a distance of up to 50 KMs or more which will add to the transportation cost of cane and there by lower the profitability of the project. The project will require approx 6.40 Lakh tons of sugar cane for utilizing full capacity for 180 days. The company has estimated that approx 1 Lakh ton sugarcane is already available within the command area of 15 KMs and an additional 3500 acres of land has already been brought under sugarcane cultivation which will provide another 1.5 Lakh tons of cane. We envisage coverage of another 10000 acres of land within the command area within the next 1-2 years on account of the setting up of the mill. Although we have estimated cane availability, it is likely that we may not get the cane as anticipated. In such eventualities, non-availability of sufficient quantity of sugarcane will adversely affect our results of operations. 13. Bagasse generated by the factory will be available only during the season i.e. 180 days in a year. There are no other sugar industries in the nearby area from which bagasse can be procured for running power plant. Non-availability or reduced availability of sugar cane will affect the generation of bagasse during the crushing season and thereby affect the cogeneration. This may compel the company to look for alternate fuels such as coal which can affect the profitability of the power plant. 14. Tata Power Trading Company Limited is currently our sole customer for the purchase of electricity produced by us and any problem in our arrangement with Tata Power may compel us to look alternative buyers of power which may affect sale of power and or the results of our operations. Our co-generation business is currently dependent on the Tata Power Company, as our sole customer. While the Electricity Act, 2003, allows “open access” and hence assists us in selling to third parties, any problem with our arrangement with Tata Power or any non-payment or delay in payment for the power supplied by us to Tata Power Trading Company Limited and/or any inability on their part to pay us for the power supplied to them by us, would impact our business and profitability. In such an eventuality we may be compelled to look for alternative power purchasing companies. 15. We are compelled to hold large inventory of sugar until the same is permitted to be released by the Government. Though part of the carrying cost is reimbursed to us by the Government of India we are obliged to incur substantial cost on this count and can be reduced only in case the liquidation of stock can happen faster. We cannot assure that Financing costs constitute a substantial part of our expenditure in our business. Financing costs of our borrowings are substantial expenditure of our Company. We are subject to risks arising from changes in interest rates, wherever the prescribed interest rates are not fixed and interest on working capital finance is material. The entire production takes place in about 180 days and the sugar is sold as per the releases of the Government of India, based on the demand. Interest is thus dependent on average inventory holding which are beyond our control. If the liquidation of stocks takes place faster, the average inventory holding would be lower and lower working capital finance would be required, resulting in lower finance cost. Similarly, in the event of slower liquidation of stocks, the finance cost will be higher. Any adverse change in this regard may impact our profitability and financial condition. 16. The Company has contingent liabilities to the tune of Rs. 202.14 laks which they have not provided for. We have contingent liabilities to the tune of Rs. 202.14 Lakhs as at 30th September 2008. We have not provided for these contingent liabilities as we have been legally advised that the claims are not sustainable against us. However in case any of these liabilities should crystallize against us, the same may affect our financial position and result of operations. 17. Our success depends in large part upon our senior management and key personnel and our ability to attract and retain them.

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We are highly dependent on our senior management and other key personnel. Our future performance will depend upon the continued services of these persons. We have an ongoing recruitment process in place and we also have a very low attrition rate. As such we do not envisage any shortage of key personnel. However in case we are not able to retain any of our senior management personnel or attract and retain new senior management personnel in the future the same may at least temporarily affect our operations. 18. Our business is dependent on our manufacturing facilities. The loss of or shutdown of operations at any of our manufacturing facilities may have a material adverse effect on our business, financial condition and results of operations. Our principal manufacturing facility at Ugar is subject to operating risks, such as the breakdown or failure of equipment, or processes, performance below expected levels of output or efficiency, obsolescence, Labour disputes, earthquakes and other natural disasters, industrial accidents and the need to comply with the directives of relevant government authorities. The occurrence of any of these risks could significantly affect our operating results. We carry out planned shut-downs of our plants for maintenance. Although we take precautions to minimize the risk of any significant operational problems at our facilities, our business, financial condition and results of operations may be adversely affected by any disruption of operations at our facilities, including due to any of the factors mentioned above. 19. Recruitment and retention of qualified and experienced professional and technical personnel may not be easy in the factory location which is a remote rural area. This may add to the manpower cost by of way of additional incentives such as accommodation, transportation and other infrastructure to be built up. This may also entail delay and could affect the operations of the factory. 20. The Company has an export obligation of Rs. 20,70,41,208 in respect of Turbine imported from Japan for using at Jewargi Unit of the Company against EPCG License No. 0730004954 dated 04.12.2006. Similarly Company has to meet an export obligation of 45 Lakh boxes of 270gms (0.92 Euros per box of sugar ship) Sugar ships per annum for a period of 5 years against the 100% EOU. If the Company fails to meet this obligation, the Company will have to pay the duty saved with interest and penalty, approximately Rs. 2.58 crores against EPCG and Rs. 5 crores against EOU. 21. Pending Govt. Approvals: M/s. Sadashiva Sugars Ltd., is yet to receive following pending approvals from the Government :

Details of pending approvals from Government: SL. No Details of Approvals Issuing Authority Status

1 Crushing license for 2008-09 Secretary, Industrial Dept. Application submitted 2 Pollution control board final approval Member Secretary Application submitted 3 Ecology and Environmental clearance Member Secretary Application submitted 4 Factory license under Factories Acty Inspector of Factories Application submitted

If the Company doesn’t get these approvals from the Government, Company cannot start its operations and this may affect on the implementation of the Project.

22. Time/ cost overrun in setting up projects including proposed project M/s. Sadashiva Sugars Ltd., The sugar plant at Jewargi and Bagalkot were delayed due to delay in machinery supply, drawings for the machinery, civil work, bank finance, etc. In view of delay in implementation of these projects the cost of the project has gone up from Rs. 128 crores to approximately to Rs. 145 crores due to interest and increase in the machinery, civil, labour costs.

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23. The Promoters/ Directors of the issuer company and director of Sadashiv Sugars Ltd, are involved in the same activity of manufacturing of sugar and co-generation. It is likely that, there will be conflict of interest in the activities of the issuer company and Sadashiv Sugars Ltd. In our opinion, since issuer company with its promoters are holding more than 50% of shares in the Sadashiv Sugars Ltd. there is not likely to have any conflict of interest. Both the units are situated beyond 200 Kms. The diversion of sugarcane is not likely. 24. Sadashiv Sugars Ltd, has purchased major portion of lands from promoters of their company, the total quantum of area and amount for the lands purchased from promoters is : Area in acres Amount (Rs in Lakhs) 94.13 189.82 External Risk Factor: 1. Sugar industry is impacted by commodity cycles and large sugar inventory exposure and sugar price volatility results in high sugar price risk for the sector as a whole and units like ours which operate in the sector suffer from lower profitability as well as losses at times because of such price volatility which is beyond our control. The sugar industry has historically been subject to commodity cycles and is sensitive to changes in domestic market prices, supply and demand. The sugar sector is impacted by induced cyclicality, since high sugar and sugarcane prices lead to increase in production at the cost of other crops. The resulting low prices for sugar impact the ability of mills to pay the farmers, thus leading to creation of arrears. High arrears lead to a significant fall in cane cultivation in the next year, leading to high sugar prices and increased attractiveness of cane. This cyclical nature of the industry adversely affects the units operating in the sugar industry including our unit on which we have no control. 2. Sugar is a heavily regulated industry and changes in Government policies may adversely affect the industry in which we operate.

Sugar industry is a highly regulated by both the Central as well as State Governments. It is the Government which allots the area for cane plantation to mills, stipulates the cane prices and decides how much sugar the mill can sell in the free market in a month. The government was maintaining levy and free sell ratio at 10:90 per cent during the financial year 2006-07. Change in government policies relating to land allocation for cultivation of sugar cane, payment to sugarcane growers, proportion of levy and open market sales, export and import of sugar etc will affect the entire industry and we will have no control on the adverse impact of the same on the results of our operations. 3. We are subject to risks arising from exchange rate fluctuations. Stability of policies and political situation in India can determine the fortunes of the Industry. We have set up a 100% export oriented unit to manufacture and export sugar cubes in the shape of ships. While we do not import any inputs appreciation of the rupee against other currencies such as Euro, US Dollar etc could adversely affect the export proceeds and our profitability. Changes in government policies such as upward revision in cane prices, restrictions on export of sugar etc. may also adversely affect the sugar industry in general and the results of our operations also. 4. IMFL industry is heavily regulated by the Government. The business of the company is subject to the State Government policy on excise. Changes in the fiscal policies of the Government could have an adverse impact on the profitability of the company. A significant change in the Government liberalization and deregulation policies could affect business and economic conditions in India and the business of the company in particular. Adverse changes in other regulation such as the distribution norms may affect the operations of the company. States may individually decide to impose prohibition on the sale of alcoholic beverages, including IMFL, as has been done in the past.

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5. IMFL industry is witnessing high level of competition as the domestic players gear up to compete for a larger share of the market. The entry of multinationals in the domestic liquor business has led to increased competition. Growing competition may force the company to reduce the prices of its products and services which may reduce its revenues and margins and/or decrease its market share, either of which could have a materially adverse effect on its business, financial condition and results of operations. In view of favorable market scenario, prospects of liquor industry are very promising. The company ,therefore, does not foresee any problem despite competition and entry of multinationals. The company’s products command good brand equity and has augmented its market share in the semi premium and regular categories. The company aims to keep growth with the dynamic business strategy and plans to broad-base its product mix by introduction of new products. The Company is now making conscious efforts to enhance the brand positioning. 6. Floods, earthquakes, terrorist attacks and other acts of violence or war/destruction involving India and other countries where the company sells its products could adversely affect the Company’s business. These acts may also result in a loss of business confidence and other services more difficult and ultimately affect the Company’s business, financial conditions and results of operations. The consequences of any of the above are unpredictable and the company may not be able to foresee events that could have a material adverse effect on its business, financial conditions or results of operations. Notes to Risk factors: 1. The investors are advised to refer the section titled “Basis for Issue Price” beginning on page no. 47 before investing in this Issue. 2. The size of the issue is Rs. 18 Crores. 3. Net Worth as on September 30, 2008 was Rs. 8087.41.Lakh. 4. The Net Asset Value as per share as on September 30, 2008 was Rs. 8.99. 5. The aggregate amount of Related Party transactions as on September 30, 2008 was Rs. 1079.71 Lakh. For Related Party Transactions please refer to section titled “Related Party Transactions” beginning on page no. 119 of this Letter of Offer. 6. The average cost of acquisition of Equity shares of the Promoters is as follows: Sr. No Name of the Promoter Average cost of Acquisition in

(Rs.) 1 Shri. Rajendra V. Shirgaokar 0.71 2. Shri. Prafulla V. Shirgaokar 0.95 3. Shri. Shishir S. Shirgaokar 0.87 7. Book Value per share as on September 30, 2008 was Rs.8.98/- 8. The aggregate amount of loans and advances made to any person(s)/ companies in which the directors are interested stands at Rs. 23.76 Lakh.

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SUMMARY

Industry and Business Summary: Sugar industry is the second largest agro-based industry located in the rural India. About 45 million sugarcane farmers, their dependents and a large mass of agricultural laborers are involved in sugarcane cultivation, harvesting and ancillary activities. Besides about 0.5 million skilled and semi-skilled workers, mostly from the rural areas are engaged in the sugar industry. Some of the sugar factories have also diversified into by-product based industries and have invested and put up distilleries, organic chemical plants, paper and board factories and co-generation plants. The industry generates its own power without depending on other sources of fuels. We, The Ugar Sugar Works Ltd. (USWL) is one of the pioneers in sugar production in the state of Karnataka. The Company was incorporated on 11th September 1939, under the patronage of his late Highness The Rajasahab of Sangli. In the year 1940 the Late Highness invited Dr. S.R.Shirgaokar, maternal uncle of late Mr. V.S.Shirgaokar – (the first Chairman & Managing Director of Ugar Sugar Works) for setting up a sugar plant. Late Mr.V.S.Shirgaokar under the guidance of late Dr. S.R.Shirgaokar, set up the sugar factory at Ugarkhurd – a fertile village on the banks of River Krishna, with a capacity of 500 TCD which started crushing on 21 April 1942. Subsequently Late Mr. Suresh Shirgaokar, younger brother of late Mr. V.S.Shirgaokar, who was popularly known as ‘Babu Kaka’ took over as Chairman & Managing Director. The management of Ugar Sugar Works Ltd was carried out under the administration of M/s. Shirgaokar Brothers – a partnership firm – as Managing Agents till 31 December 1969. Under the administration of the Managing Agents, crushing capacity of the factory was raised to 2000 TCD from time to time till 31st December 1969. Subsequently the management was assumed by the present promoters directly. M/s. Ugar Sugar Works Ltd. presently has an integrated 10000 TCD Sugar plant with distillery and Indian Made Liquor section and a 45 MW Co-generation plant located at Ugarkhurd, Distt: Belgaum, Karnataka State. Further 3500 TCD capacity is being added alongwith a 15 MW cogeneration plant at at Malli Village, Jewaragi Taluka, Gulbarga District, Karnataka State In addition. we are presently implementing 3500 TCD capacity sugar project with 15 MW cogeneration plant jointly with Sadashiva Sugars Ltd at Nagral Village, Taluk & District Bagalkot, Karnataka State, part funding of which is proposed through the present rights issue.

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Summary of Consolidated Financial Statements: Statement of Profits and Losses, as restated (Rs. in Lakh)

For Peiod ended on For the year ended

Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Income: Sales 25,571.01 50,169.88 23,341.17 49,400.10 40,214.19 26,392.07 Less: Excise Duty 4,805.04 8,174.64 4,609.39 9,021.27 6,760.65 3,342.70 Net Sales 20,765.97 41,995.24 18,731.78 40,378.83 33,453.54 23,049.37 Increase/(Decrease) in Stock (12,559.63) (4,353.46) 11,409.36 6,405.01 (4,017.94) (3,185.63) Other Income 653.66 1,818.84 1,053.56 929.50 387.15 269.38

Total 8,860.00 39,460.62 31,194.70 47,713.34 29,822.75 20,133.12 Expenditure: Raw Materials Consumed & Purchase of Trading Goods 2,893.78 24,053.06 23,061.32 35,241.05 19,768.33 11,436.25 Manufacturing, Selling & Administrative Expenses 4,540.44 10,263.10 5,628.64 9,577.55 6,415.24 4,313.57 Interest and Finance Charges 728.35 2,310.44 897.36 1,450.41 1,258.96 1,710.00 Depreciation 625.06 1,398.42 654.40 1,066.90 1,122.64 1,310.41 Amortisation 0.70 2.96 1.49 2.56 0.73 0.37 Total 8,788.33 38,027.98 30,243.21 47,338.47 28,565.90 18,770.60 Net Profit Before Tax and exceptional items

71.67 1,432.64 951.49 374.87 1,256.85 1,362.52

Less: Exceptional items - - - - - - Profit before Tax 71.67 1,432.64 951.49 374.87 1,256.85 1,362.52 Less: Provision for Taxation Current Tax 90.00 103.07 70.51 111.27 92.00 146.55 Fringe Benefit Tax 8.04 20.58 10.00 16.15 6.00 - Deferred Tax 12.18 (163.68) 103.76 (37.59) (207.59) 240.58

110.22 (40.03) 184.27 89.83 (109.59) 387.13 Net Profit after Tax and exceptional items

(38.55) 1,472.67 767.22 285.04 1,366.44 975.39

Note: The financial year ended on 31-03-2007 was for a period of six months.

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Statement of Assets and Liabilities, as restated (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 A. Fixed Assets: a) Gross Block 22,855.51 22,291.99 22,381.78 18,711.66 17,967.52 18,077.85 Less: Depreciation 14,546.65 13,932.84 12,727.72 12,154.26 11,091.43 10,225.84 Net Block 8,308.86 8,359.15 9,654.06 6,557.40 6,876.09 7,852.01 b) Capital Work in Progress 14,585.95 12,882.60 7,108.07 4,167.06 525.11 136.41 Total 22,894.81 21,241.75 16,762.13 10,724.46 7,401.20 7,988.42 B. Intangible Assets 1.02 0.76 3.72 5.13 1.10 0.73 C. Investments (net) 1,837.07 1,859.32 29.13 28.86 28.86 26.61

D. Current Assets, Loans & Advances:

a) Inventories 6,355.88 20,233.66 24,620.54 12,215.40 5,089.53 9,072.92 b) Sundry Debtors 2,808.82 3,592.66 2,067.74 3,947.27 2,368.70 2,600.17 c) Cash & Bank Balances 1,094.78 2,826.38 14,729.19 7,932.49 5,563.96 4,930.55 d) Other Current Assets 3,571.17 2,790.39 1,633.12 1,059.98 1,180.16 1,239.92 e) Loans & Advances 2,115.50 1,204.31 3,734.69 4,315.37 1,806.53 679.79

Total 15,946.15 30,647.40 46,785.28 29,470.51 16,008.88 18,523.35 E. Total Assets (A+B+C+D) 40,679.05 53,749.23 63,580.26 40,228.96 23,440.04 26,539.11 F. Less: Liabilities and Provisions: a) Secured Loans 19,918.67 28,279.11 25,815.10 16,599.22 10,645.05 13,437.87 b) Unsecured Loans 3,425.84 2,937.94 1,533.65 3,574.79 1,339.32 1,941.02

c) Current Liabilities & Provisions :

Current Liabilities 7,917.00 14,554.92 28,548.96 12,461.91 3,847.49 4,542.25 Provisions 853.21 1,073.21 391.79 515.28 583.90 547.31

8,770.21 15,628.13 28,940.75 12,977.19 4,431.39 5,089.56

Total Liabilities 32,114.72 46,845.18 56,289.50 33,151.20 16,415.76 20,468.45

G. Net worth before deferred tax liability(E-F)

8,564.33 6,904.05 7,290.76 7,077.76 7,024.28 6,070.66

H. Deferred Tax Liability 476.92 464.74 780.07 676.32 713.91 921.49 I. Adjusted Net worth (G-H) 8,087.41 6,439.31 6,510.69 6,401.44 6,310.37 5,149.17 J. Net Worth Represented by 1. Share Capital 900.00 900.00 900.00 900.00 900.00 562.50 2. Reserves & surplus 7,187.41 5,539.31 5,610.69 5,490.17 5,410.37 4,586.67 K. Misc. Expenditure (to the extent not written off) - - - - - - L. Adjusted Net Worth 8,087.41 6,439.31 6,510.69 6,390.17 6,310.37 5,149.17

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NOTE: 1. The Company has changed its financial year from 30th September every year to 31st March every year from March 31, 2007 onwards.

2. Secured Loans – 30-09-2006 and 31-03-2007 – reasons for substantial increase in secured loans is: Comparing the figures, there has been an increase of Rs. 9,215.88

lakh. The increase has been in the following loan accounts: Loan Accounts: Amount as on

31-03-2007 Rs. Lakh

Amount as on 30-09-2006

Rs. lakh

Increase

Rs. lakh

Decrease

Rs. Lakh Working capital loan against hypothecation of stores and spares

279.52

92.32

187.20

--

Working capital loan against pledge of stock of sugar

11,296.90

10,040.88

1,256.02

--

Working capital loan against FD Receipt 2,037.34 0.00 2,037.34 -- Corporate Loan from Axis Bank Ltd. 3,000.00 2,400.00 600.00 -- Axis Bank Ltd 1,000.00 1200.00 -- (200.00) Rabo India Finance 1200.00 1400.00 -- (200.00) Rabo International 1388.88 1407.54 -- (18.66) Sugar Technology mission & board 52.26 58.48 -- (6.22) Term Loan for Jewargi Project from Bank of Baroda

2,505.92

0.00

2,505.92

Term Loan for Jewargi Project from Central Bank of India

3,054.28

0.00

3,054.28

Total 25815.10 16599.22 9,640.76 (424.88) The net increase in secured loans is Rs. 9215.88 Lakh The Secured loan during the year ended 31.03.2007 has gone up because of the Term Loan taken from Bank of Baroda & Central Bank of India for Jewargi Project & also the working capital finance has gone up due to increased crushing and increase in holding of stock of sugar for the period ended 31.03.07

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THE UGAR SUGAR WORKS LIMITED Dear Shareholder(s), Pursuant to the resolution passed by the Board of Directors by our Company at its meeting held on August 18, 2007 it has been decided to make the following offer to the Equity Shareholders of our Company, with a right to renounce. ISSUE OF 2,25,00,000 EQUITY SHARES OF THE FACE VALUE OF Rs. 1 EACH AT A PREMIUM OF Rs. 7 PER SHARE FOR AN AMOUNT AGREEGATING TO Rs 18 CRORE ON RIGHTS BASIS TO THE EXISTING SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF ONE EQUITY SHARE FOR EVERY FOUR EQUITY SHARES HELD ON THE RECORD DATE, THAT IS ON 29TH SEPTEMBER, 2008. AMOUNT PAYABLE ON APPLICATION: RS. 8.00 PER SHARE THE ISSUE PRICE IS 8 TIMES THE FACE VALUE OF THE SHARES OF OUR COMPANY. IMPORTANT • This offer is applicable to only those Equity Shareholders whose names appear as beneficial owners as per

the list to be furnished by the depositories in respect of the shares held in electronic form and on the Register of Members of the Company in respect of the shares held in physical form as on 29th September, 2008 i.e Record Date, fixed in consultation with BSE.

• Your attention is drawn to the section titled “Risk Factors” beginning on page no 6 of this Letter of

Offer. • Please ensure that you have received the CAF with this Letter of Offer/ Abridged Letter of Offer. • Please read this Letter of Offer/Abridged Letter of Offer and the instructions contained herein and in

the CAF carefully, before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer/ Abridged Letter of Offer and must be carefully followed. Applications are liable to be rejected if they are not in conformity with the terms of the Letter of Offer/ Abridged Letter of Offer or the CAF.

• All enquiries in connection with this Letter of Offer/ Abridged Letter of Offer or CAF should be

addressed to the Registrar to the Issue, Bigshare Services Private Ltd, quoting the Registered Folio Number/ Depository Participant (DP) Number and Client ID Number and the CAF Numbers as mentioned in the CAF.

• In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar will issue a

duplicate CAF on the request of the shareholder who should furnish the registered folio number/ DP ID/ Client ID number and his/her full name and address to the Registrar. Please note that those applicants who are making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. In case the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of duplicate CAF and the original CAF will be ignored.

• The offer will be kept open for a minimum period of fifteen days. If extended, it will be kept open for a

maximum period of thirty days.

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• The Issue Program is as follows:

Issue Opens On 17.11. 2008 Last Date for Request for Split Application Forms 24.11. 2008 Issue Closes On 02.12. 2008

• The funds received against the offer will be kept in a separate bank account(s) and our Company will not

have any access to such funds unless we satisfy the Designated Stock Exchange with suitable documentary evidence that the minimum subscription of 90% of the Issue has been received by our Company. If our Company does not receive the minimum subscription of 90% of the Issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the Issue. The Promoters have undertaken to subscribe to the unsubscribed portion to ensure that the Issue is successful.

THE ISSUE

Equity shares Issued by the Company 2,25,00,000 Equity Shares Rights Entitlement One Equity Share of the face value of Re 1 for every four equity

shares of the Company held on the Record Date. Record Date 29th September, 2008. Issue Price per Equity Share Rs 8 per share (including a premium of Rs 7 per share) Amount payable on application Rs. 8.00 per share (including Rs.1.00 towards face value and

Rs.7.00 towards premium) Equity Shares outstanding prior to the Issue 9,00,00,000 Equity Shares of face value of Rs 1 each Equity Shares outstanding after the Issue 11,25,00,000 Equity Shares of face value of Rs 1 each Terms of the Issue For more information refer to section “Basis terms of the issue”

beginning on page no 45 of this Letter of Offer

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GENERAL INFORMATION Our Company was incorporated on the 11th September, 1939 as a Limited Company, under the Indian Companies Act, 1913 as amended upto 1936 by Act XXII of 1936.With its Registered Office: Mahaveer Nagar, Sangli-416 416. (Maharashtra). Tel No.0233-2623716,2623717 Fax No.0233-2623617. Our Company is registered with Registrar of Companies Pune, PMT Building, 3rd Floor, Deccan Gymkhana, Pune, Maharashtra. The Registration Number of our Company is 006738 of 1939 and CIN (Corporate Identity Number) is L15421PN1939PLC006738. Registered Office: Mahaveer Nagar, Sangli, Maharashtra. India-416 416. Tel no: 0233-2623716/ 2623717 Fax No:0233-2623617 Board of Directors of The Ugar Sugar Works Limited

Sr. No. Name Designation 1 Mr. R.V. Shirgaokar Chairman & Managing Director 2 Mr. P.V. Shirgaokar Executive Director 3 Mr. Shishir S Shirgaokar Wholetime Director 4 Mr. V Balasubramanian Independent Director 5 Mr. M.B. Karmarkar Independent Director 6 Mr. S.N. Inamdar Independent Director 7 Mr. B.N. Kalyani Independent Director 8 Mr. M.G. Joshi Independent Director 9 Dr. M.R. Desai Independent Director 10 Mr. A.B. Kage Independent Director 11 Mr. B.S. Patil Director 12 Mr. D.B. Shah Independent Director

Brief write-up on the Executive/ whole-time Directors: Chairman & Managing Director Shri. Rajendra Vinayak Shirgaokar, aged about 72 years is Bachelor of Science in Chemical Engineering from London University. He is a well known industrialist in sugar industry. He has been serving the organization for the past 41 years. He has been instrumental in developing distillery and IMFL sections in the Company. He is actively involved in setting up new projects and setting up clean development mechanism. He has worked as a President of All India Distillers Association. He is responsible for total administration and production. Executive Director Shri. Prafulla Vinayak Shirgaokar, aged about 69 years is a Master in Science. He is a well known industrialist in sugar industry and has been serving the organization since past 37 years. He has keen interest in the administration, cane development activities and purchase. He has developed Ugar Niravari scheme which is the largest co-operative irrigation scheme in the country for irrigating the area allotted for cane development by the Company. He has served as President of South Indian Sugar Mills Association. Whole time Director Shri. Shishir Suresh Shirgaokar, aged about 63 years is a Science Graduate from Fergusson College, Pune. He is an eminent industrialist in sugar industry and has been serving the organization since past 37 years. He has primary responsibility of taking care of the financials of the Company and the group. Other areas where he is mainly involved are Banking, New Projects Execution and Inventory Control.

20

ISSUE MANAGEMENT TEAM Company Secretary and Compliance Officer: Mr. B. G. Kulkarni Company Secretary The Ugar Sugar Works Limited P.O. Ugar-Khurd; Dist. Belgaum, Karnataka; India-591 316 Tel No: 08339-272230 Fax No: 08339-272232 Email: [email protected] LEAD MANAGER TO THE ISSUE BOB Capital Markets Limited Ground and First Floor, Meher Chambers, Dr. S.B. Marg, Off R. Kamani Marg Ballard Estate, Mumbai-400 038 Tel no: +91-22-6637 2301-04 Fax no:+91-22-6637 2312 Email: [email protected] Contact Person: Mr. Y.K. Garg. REGISTRAR & SHARE TRANSFER AGENT FOR THE COMPANY BIGSHARE SERVICES PRIVATE LIMITED E/2, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri (E), Mumbai - 400 072 Tel: +91-22-404 30 200 Fax: +91-22-28475207 Website: www.bigshareonline.com E-Mail: [email protected] Contact person:Mr.Ashok Shetty AUDITORS TO THE COMPANY M/s. P.G. Bhagwat Charted Accountant Manoj Arcade, Tilakwadi, Belgum-Karnataka, India-590 006 Tel No: 0831-2429306 Fax No: 0831-4201479 E-mail: [email protected] Contact Person: Mr. M. K. Shevade LEGAL ADVISORS Kesvy & Co. Advocates. No. 24, Giri School Street, Sheshadri Nagar, Bangalore 560020. Ph: 080-23563482 Fax No: 080-23367849 Contact Person: Mr. Shashidhar Email: [email protected]

21

BANKERS TO THE COMPANY Central Bank of India Br. Mahaveernagar, Wakhar Bhag, Sangli- 416416 Ph No; 0233-2623511 Fax No: 0233-2622531 Bank of Baroda Br. Amrai Road, Sangli 416416. Phone No: 0233-2623058 Fax No: 0233-2620113 Axis Bank Ltd. Br. Ground Floor, DSP Plaza, Amrai Road, Anand Chowk, Sangli – 416416 Ph No: 0233-2328941 Fax No: 0233-2328944 HDFC Bank Ltd. Br.- Sangli 416416 Ph No: 0233-2327813 Fax No: 0233-2327823 Union Bank of India Br.- Athani, Athani Ph No: 08289-251124 BANKERS TO THE ISSUE Axis Bank Ltd., Azad Chowk, Opp. Collectors Bunglow, Amrai Road, Sangli 416416. Tel: +91 233 -6613600 Fax: +91 233 - 2328944 Website: www.axisbank.co.in E-Mail: [email protected] Contact person: Mr. Sameer Mulye Bank of Baroda, Mumbai Main Office, 10/12, Mumbai Samachar Marg Fort, Mumbai 400 001. Tel: +91 22 40468316 Fax: +91 22 22835236 Email: [email protected] Website: www.bankofbaroda.com Contact Person: Mr. Ashokan S. B. Union Bank of India, Merchant Banking Division, 2nd Floor, Mumbai Samachar Marg Br., Fort Mumbai –400 023. Tel: +91 22 22642744/ 22629415 Fax: +91 22 22642787 Website: www.unionbankofindia.com E-Mail: [email protected] Contact person: Mr. B. Chandramohan/ Mrs. Aruna

22

Note: Investors are advised to contact the Registrar to the Issue/ Compliance Officer in case of any pre-issue/ post-issue related problems such as non-receipt of Letter of Offer/ Letter of Allotment/ Debenture Certificate (s) / Share Certificate(s)/ Warrant Certificate(s)/ Refund Orders/ Demat Credit. Credit Rating Details Our present issue has not been rated by any Credit Rating Agency. Inter-se allocation of Responsibilities Not Applicable Monitoring Agency Not Applicable Appraising Entity Not Applicable Underwriting Details Our Company has not entered into any standby arrangements with underwriters for underwriting the present issue. Impersonation As a matter of abundant caution, attention of the applicant is specifically drawn to the provisions of subsection(1) of the Section 68A of the Act which is reproduced below: “Any person who makes in a fictitious name an application to the company for acquiring or subscribing for, any shares therein, or otherwise induces the company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”. Minimum Subscription If our Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), our Company will pay interest for the delayed period, at the rate of 15% as prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

Note: 1) Investors are advised to contact the Registrar to the Issue/ Compliance Officer in case of any pre- issue/ post-issue related problems such as non-receipt of Letter of Offer/ Letter of Allotment/ Share Certificate(s)/CAF / Refund Orders/ Demat Credit. 2) The funds received against this Issue will be transferred to a separate bank account other than bank account referred in sub-section (3) of section 73 of the Act.

23

CAPITAL STRUCTURE

Share Capital Nominal Value (Rs)

Share Premium

Total Value (Rs.)

Authorized Capital 20,00,00,000 Equity Shares of Re. 1 each

20,00,00,000

Nil

20,00,00,000

Issued, Subscribed and Paid-up Capital 9,00,00,000 Equity Shares of Re. 1 each

9,00,00,000

Nil

9,00,00,000

Present Rights Issue through this letter of offer 2,25,00,000 Equity Shares of Re. 1 each at a premium of Rs. 7 per share

2,25,00,000

15,75,00,000

18,00,00,000 Total Paid-up Capital after the offer 11,25,00,000 Equity Shares of Re. 1 each

11,25,00,000 Nil 11,25,00,000

Share Premium Account Before the Offer After the Offer

Nil Nil

Nil

15,75,00,000

Nil

15,75,00,000 Notes: The Capital Structure Statement is prepared on the assumption that proposed right issue of Equity Shares 2,25,00,000 @ Rs. 8/- per share will be subscribed fully. SHARE CAPITAL HISTORY

A. EQUITY SHARES

Year

Date of Allotme

nt

Date when fully paid

No of Shares

Face Value

Rs.

Issue Price Rs.

Cumu-lative

Shares

Cumu-lative Paid

Up Capital

Rs.

Nature of Pay-ment

Remarks

1939-60 N.A N.A 29,645 100 100 29,645 29,64,500 Cash Share Capital as on 30.06.60

1960-61

21/02/60 15/05/60 20/11/60

21/02/60 15/05/60 20/11/60

10 5

10,000

100 100 100

100 100 100

29,655 29,660 39,660

29,65,500 29,66,000 39,66,000

Cash

1961-66 No change 21/05/66 21/05/66 13,600 100 100 53,260 53,26,000

Cash By conversion of Pref A - 340 shares in ratio of 40 share for 1 share held

30/06/66 27/02/67 10,652 100 100 63,912 63,91,200 Bonus Ratio 1:5 1966-67 30/06/67 30/06/67 15,816 100 50 79,728 *68,94,780 Cash On 15816 @ 50 call-up , Rs. 7,90,800 Add:- Calls In Advance Rs. 58,855 Less:-

24

Calls in Arrears Rs. 346075 = Rs. 503580 *( Rs. 6,39,1200 + 5,03,580 = 6894780)

Year

Date of Allot-ment

Date when fully

paid

No of Shares Face Value

Rs.

Issue

Price Rs.

Cumula-tive

Shares

Cumula-tive Paid Up

Capital Rs.

Nature of Pay-ment

Remarks

1967-68 03/07/67 03/07/67 4,352 100 100 84,080 82,90,975 Cash Calls in arrears Rs. 1,17,025

1968-69 83,93,525 Cash Calls in arrears Rs. 14,475


1970-71 No Change


1972-73 84,08,000 Cash Calls in arrears NIL

1973-74 20/08/73 20/08/73 16,816 100 100 1,00,896 1,00,89,600 Bonus Ratio 1:5 1974-87 No change 1,00,896 1,00,89,600 1987-88 01/07/88

01/08/88 01/09/88 29/09/88

01/07/88 01/08/88 01/09/88 29/09/88

59,256 5,824

15,795 5,349

100 100 100 100

100 100 100 100

1,60,152 1,65,976 1,81,771 1,87,120

1,60,15,200 1,65,97,600 1,81,77,100 1,87,12,000

Rights Rights in ratio of 4 shares for every 5 shares held at Rs. 100 per share. Calls in arrears Rs. 94,050 out of the shares issue during the year 87-88

25

1988-90

18/10/88 27/11/88 26/12/88

18/10/88 27/11/88 26/12/88

1,031 3,348 8,501

100 100 100

100 100 100

1,88,151 1,91,499 2,00,000

1,88,15,100 1,91,49,900 2,00,00,000

Cash

1990-

94 No change 2,00,000 2,00,00,000

1994-95

05/08/94 21/10/94

05/08/94 21/10/94

5,00,000 12,50,000

10 10

10 10

25,00,000 3750000

2,50,00,000 3,63,30,500

Bonus Rights

*Split from Rs. 100 to Rs. 10, Issue of 12.5 Lakh share at Rs.10 & 5 Lakh share as Bonus by Capitalization in ratio of 1 share for 4 share held & Calls in Arrears Rs. 11,69,500

1995-96 10 10 37,50,000 3,75,00,000 Cash

Calls in arrears NIL

1996-97 No change 37,50,000 3,75,00,000

1997-98

24/02/98 24/02/98 7,50,000 10 10 45,00,000 4,50,00,000 Bonus Ratio 1:5

1998-99

10/11/98 10/11/98 11,25,000 10 10 56,25,000 5,61,56,000 Right Ratio 1:4 Calls in arrears of Rs. 94000

1999-2000 No change 10 10 56,25,000 5,62,50,000 Cash

Calls in arrears NIL

2000-04 No change 56,25,000 5,62,50,000

2004-05

12/7/05 12/7/05 33750000 1 1 9,00,00,000 9,00,00,000 Bonus Shares Split from Rs 10 to Re. 1 & Bonus in the Ratio

26

3:5

B. PREFERENCE SHARES

As per auditor certificate, the issuer Company has made preferential allotment of equity shares to the promoters and issued bonus shares from time to time as detailed below by following Relevant/ SEBI Guidelines prevailing at the time of Issue. Year of Issue

No. of Shares

Face Value per share (Rs)

Nature of Issue

Remarks

1966-67 10,652 100 Bonus Ratio 1:5 1973-74 16,816 100 Bonus Ratio 1:5 1994-95 5,00,000 10 Each Share of Rs. 100 split into 10 shares of Rs. 10

each. Bonus shares issued in the ration 4:1 12,50,000 10 Preferential

Basis Issue of 12.5 laks shares to the promoters/ promoter group

1997-98 7,50,000 10 Bonus Ratio 1:5 2004-05 3,37,50,000 1 Bonus Each Share of Rs. 10 split into 10 shares of Rs. 1

each. Bonus shares issued in the ration 3:5 Present Right Issue:

Type of Instrument

Ratio Face Value (Re)

No. of Shares Issue Price (Rs.)

Consideration

Equity Shares

1:4 1 2,25,00,000 8 Cash

The shares will be in the denomination of Rs. 1/- only.

Year

Date of Allot-ment

Date when fully paid

No of Shares

Face Value

Rs.

Issue Price Rs.

Cumulative

Shares

Cumu-lative

Paid Up Pre-

ference Capital

Rs.

Nature of Pay-ment

Remarks

1939-40

N A *Amount Paid up Rs. 45 per share

**1,500 100 100* 1,500 67,500 Cash **Converted into 1500 Equity shares of Rs. 100 each Rs. 45 paid up in 1941-42

Preference "A" Shares 1940-41

N A 1941-42 21 100 100 21 2,100 Cash

1941-42

N A 1941-42 319 100 100 340 34,000 Cash Converted into 13,600 Equity shares of Rs. 100 each on 21.5.1966

27

Pre and Post Issue Shareholding pattern as on 30th June, 2008.

Pre-Issue Shareholding

(as on 30.06.2008)

*Post-Issue Shareholding Category

No of Shares % of Shareholding

No of Shares % of Shareholding

Promoters - Indian Promoters/ Promoter Group

12,279,111 13.64 15,345,000 13.64

- Foreign Promoters 0 0.00 0 0 Sub-total (A) 12,279,111 13.64 15,345,000 13.64 Promoter Group Companies 27,019,536 30.02 33,772,500 30.02 Total Promoters and Promoters Group (A+B)

39,298,647 43.67 49,117,500 43.67

Institutional Investors 0 0.00 0 0 a. Mutual Funds & UTI 0 0.00 0 0 b. Banks, Financial Institutions/ Insurance Co

2,369,938 2.63 2,958,750 2.63

c. FIIs 0 0.00 0 0 Sub-total (C) 2,369,938 2.63 2,958,750 2.63 Others a. Private Corporate Bodies 4,373,202 4.86 5,467,500 4.86

b. Indian Public 43,501,593 48.34 54,382,500 48.34 c. NRI/ OCBs 379,570 0.42 472,500 0.42 d. Others 77,050 0.09 101,250 0.09 Sub-total (D) 48,331,415 53.70 60,423,750 53.7

Grand Total (A+B+C+D) 90,000,000 100.00 112,500,000 100.00

*Post issue shareholding is based on the assumptions that all shareholders will subscribe to their rights entitlement fully. Shareholding pattern of Promoters (as on 30.06.2008)

Particulars Pre-Issue Shareholding *Post-Issue Shareholding No of Equity

Shares % to Present

Equity No of Equity

Shares % to Post

Issue Equity a. Promoters - Shri. R. V. Shirgaokar - Shri. P. V. Shirgaokar - Shri. Shishir S. Shirgaokar

4,32,680 3,76,096 8,43,756

0.48 0.42 0.94

539600 470120

1116510

0.48 0.42 0.94

Total 16,52,532 1.84 2126230 1.84 *Post issue shareholding is based on the assumptions that all promoters will subscribe to their rights entitlement fully.

28

Shareholding pattern of Promoters/Directors/ Relatives of Promoters as on 30th June, 2008

Sr. No. Name of the shareholder

Number of shares

Shares as a %age of total

number of shares

1 Rajendra V. Shirgaokar 432680 0.48 2 Prafulla V Shirgaokar 376096 0.42 3 Shishir S Shirgaokar 843756 0.94 4 Vinita M Samant 44080 0.05 5 Shilpa N Kumar 98080 0.11 6 Savita S Shirgaokar 86656 0.10 7 Niraj S Shirgaokar 71496 0.08 8 Chitra A Dalvi 140448 0.16 9 Sindhu V Dalvi 80000 0.09

10 Vijay J Dalvi 64816 0.07 11 Sachin R Shirgaokar 1033440 1.15 12 Laxmi S Shirgaokar 519880 0.58 13 Radhika S Shirgaokar 1659134 1.84 14 Smita P Shirgaokar 212400 0.24 15 Dinkar Madhusudan Shirgaokar 224640 0.25 16 Shradha D Shirgaokar 21600 0.02 17 Shirgaonkar Brothers 40008 0.04 18 Kalpana M Shirgaokar 1100688 1.22 19 Mugdha Sudanshu Purohit 39280 0.04 20 S B Wagle 78464 0.09 21 Kunda K Shirgaokar 764704 0.85 22 Sanat Shirgaokar 48480 0.05 23 Tarini S Shirgaokar 21600 0.02 24 Saraswati Divan 81000 0.09 25 Puja H. Pusalkar 12000 0.01 26 Nishikant Divan 32800 0.04 27 Jeevan V Shirgaokar 82511 0.09 28 Anuja V Shirgaokar 51700 0.06 29 Avinash V Shirgaokar 110832 0.12 30 Aniket J Shirgaokar 7337 0.01 31 Chandan S Shirgaokar 96248 0.11 32 Sohan S Shirgaokar 93600 0.10 33 Prakash S Shirgaokar 10000 0.01 34 Rekha R Khedekar 17264 0.02 35 A B Kage 107440 0.12 36 Deepchand B Shah 29840 0.03 37 Mallapa R Desai 26400 0.03 Page Total 8761398 9.73

29


Number of shares


number of shares

38 B S Patil 5000 0.01 39 S N Inamdar 15000 0.02 40 M G Joshi 16000 0.02 41 V Balsubramanian 11200 0.01 42 B N Kalyani 1267104 1.41 43 M B Karmarkar 15800 0.02 44 S J Hiremath 13184 0.01 45 S A Kage 4800 0.01 46 Nivedita Sarnaik 21600 0.02 47 Sena Desai 21600 0.02 48 Rekhadevi Desai 21600 0.02 49 Chinnadevi Desai 21600 0.02 50 Shantadevi Desai 67200 0.07 51 Rajatkumar Sarnaik 24000 0.03 52 Sunita B Kalyani 1200000 1.33 53 Madhavi Dalvi 224800 0.25 54 Rajeev Dalvi 298400 0.33 55 Sumit R Khedekar 12000 0.01 56 Harshada A Shirgaokar 4000 0.00 57 Sukhada A Shirgaokar 14864 0.02 58 Kaujalagi Shivanand H 54000 0.06 59 Kaujalagi Basavraj S 25475 0.03 60 Kaujalagi Mahantesh S 16000 0.02 61 Shrikant Keshavrao Chaugule 45788 0.05 62 Vijay K Chougule 640 0.00 63 Vaishali Marathe 23064 0.03 64 Pandurang V Jog 5600 0.01 65 Chandrashekhar Bhide 70034 0.08 66 B. A. Kage 8000 0.01

Page Total 3528353 3.92

66 TOTAL 12289751 13.66

30


Number of shares


number of shares

PROMOTER BODY CORPORATES 1 SHANTARAM MACHINERIES PVT LTD 411008 0.46 1 TARA TILES PVT LTD 1011200 1.12 1 B.B. THEATRES PVT LTD 2400 0.00 1 SANGLI FABRICATORS PVT LTD 12608 0.01 1 UGAR PIPE IND PVT LTD 12608 0.01 1 VINAYAK SHIRGAOKAR INV PVT LTD 2178064 2.42 1 SURESH SHIRGAOKAR INV PVT LTD 1123536 1.25 1 D.M. SHIRGAOKAR INV PVT LTD 1771904 1.97 1 M. SHIRGAOKAR INV PVT LTD 2630576 2.92 1 PRAFULLA SHIRGAOKAR INV PVT LTD 1579776 1.76 1 SHISHIR SHIRGAOKAR INV PVT LTD 1730752 1.92 1 SANJEEV SHIRGAOKAR INV PVT LTD 1505280 1.67 1 PRABHAKAR SHIRGAOKAR INV PVT LTD 2875136 3.19 1 S. B. RESHELLERS PVT LTD 10174688 11.31

14 TOTAL 27019536 30.02

NO'S TOTAL PROMOTERS HOLDING SHARES PERCENTAGE

66 INDIVIDUAL/HUF 12289751 13.66 14 COMPANIES 27019536 30.02

80 TOTAL 39309287 43.68 Details of Directors Shareholding as on 30th June, 2008.


Number of shares


number of shares

1 Rajendra V. Shirgaokar 432680 0.48 2 Prafulla V Shirgaokar 376096 0.42 3 Shishir S Shirgaokar 843756 0.94 4 A B Kage 107440 0.12 5 Deepchand B Shah 29840 0.03 6 Mallapa R Desai 26400 0.03 7 B S Patil 5000 0.01 8 S N Inamdar 15000 0.02 9 M G Joshi 16000 0.02

10 V Balsubramanian 11200 0.01 11 B N Kalyani 1267104 1.41 12 M B Karmarkar 15800 0.02

1. Details of sale and purchase of securities of our Company by the Promoters and Directors, Promoter Group in the last six months.

Name Date Buy Sale Rate Amount 1. Mr. R V. Shirgaokar 07/09/2007 1000 -- 13.00 13,000 2. Mr. P V Shirgaokar 16/10/2007 -- 10,000 13.23 1,32,371

31

3. Mr. M B Karmarkar 16/11/2007 -- 25,000 12.40 3,10,101 4. Mr. N.S. Shirgaokar 21/12/2007 -- 9,500 20.89 1,98,466 5. Mr. S.R.Shirgaokar 26/12/2007 -- 10,000 22.71 2,27,101 6. Mr. R.V. Shirgaokar 15/02/2008 1,000 -- 13.00 13,000 7. Mr. S.S. Shirgaokar 08/02/2008 -- 49,452 0.00 Transfer as per terms of will of

his mother Late. Smt. Tarabai Suresh Shirgaokar

8. Mr. N.S. Shirgaokar 04/02/2008 -- 9,500 15.33 1,45,720 2. Details regarding Top 10 Shareholders:

The details of top 10 shareholders and the number of shares held by them are as below: A. As on date of filing the Letter of Offer with Stock Exchange.

Sr No Name No of Shares %age 1 S B RESHELLERS PRIVATE LIMITED 10,174,688 11.31 2 PRABHAKAR SHIRGAOKAR INVESTMENTS PVT LTD 2,875,136 3.19 3 MOHAN SHIRGAOKAR INVESTMENTS PVT LTD 2,630,576 2.92 4 VINAYAK SHIRGAOKAR INVESTMENT PVT. LTD 2,178,064 2.42 5 LIFE INSURANCE CORPORATION OF INDIA 2,079,058 2.31 6 MURKUMBI INDUSTRIES PVT LTD 1,850,000 2.06 7 D M SHIRGAOKAR INVESTMENT PVT LTD 1,771,904 1.97 8 SHISHIR SHIRGAOKAR INVESTMENTS PVT. LTD 1,730,752 1.92 9 PRAFULLA SHIRGAOKAR INVESTMENTS PVT LTD 1,579,776 1.76

10 SANJIV SHIRGAOKAR INVESTMENTS PVT LTD 1,505,280 1.67 B. 10 days prior to filing the Letter of Offer with Stock Exchange.

Sr No Name No of Shares %age 1 S B RESHELLERS PRIVATE LIMITED 10,174,688 11.31 2 PRABHAKAR SHIRGAOKAR INVESTMENTS PVT LTD 2,875,136 3.19 3 MOHAN SHIRGAOKAR INVESTMENTS PVT LTD 2,630,576 2.92 4 VINAYAK SHIRGAOKAR INVESTMENT PVT. LTD 2,178,064 2.42 5 LIFE INSURANCE CORPORATION OF INDIA 2,079,058 2.31 6 MURKUMBI INDUSTRIES PVT LTD 1,850,000 2.06 7 D M SHIRGAOKAR INVESTMENT PVT LTD 1,771,904 1.97 8 SHISHIR SHIRGAOKAR INVESTMENTS PVT. LTD 1,730,752 1.92 9 PRAFULLA SHIRGAOKAR INVESTMENTS PVT LTD 1,579,776 1.76

10 SANJIV SHIRGAOKAR INVESTMENTS PVT LTD 1,505,280 1.67 C. Two years prior to filing the Letter of Offer with Stock Exchange.

Sr. No. Name No of Shares % to

Capital 1 S.B. RESHELLERS PVT LIMITED 1,00,11,008 11.12 2 PRABHAKAR SHIRGAOKAR PVT LIMITED 26,57,056 2.95 3 LIC 26,29,808 2.92 4 MOHAN SHIRGAOKAR PVT LIMITED 23,62,864 2.63 5 VINAYAK SHIRGAOKAR PVT LIMITED 19,60,336 2.18 6 D.M. SHIRGAOKAR PVT LIMITED 16,77,888 1.87 7 SHISHIR SHIRGAOKAR PVT LIMITED 16,22,736 1.80 8 PRAFULLA SHIRGAOKAR PVT LIMITED 14,71,760 1.64 9 B.N. KALYANI 12,67,104 1.41

10 SUNITA BABASAHEB KALYANI 12,00,000 1.33

32

3. No further issue of capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner will be made by our Company during the period commencing from

submission of the Letter of Offer with SEBI till the Securities referred in this Letter of Offer have been listed, or application money is refunded on account of failure of the issue.

4. Our Company presently does not have any intention or proposal to alter its capital structure within a period of six months from the date of opening of the issue, by way of split/ consolidation of the

denominations of shares or further issue of shares whether preferential or otherwise. 5. Our Company has 19,960 Equity Shareholders as on 24.10.2008. 6. At any given point of time there shall be only one denomination for the Shares of our Company and we shall comply with such disclosures and accounting norms as may be prescribed by SEBI. 7. Our Company has raised loan against the proceeds of this issue from Bank of India. 8. Our Company has not entered into any standby arrangements. 9. The rights entitlement of the Promoter/ Promoter Group will be fully subscribed. 10. The Issue will remain open for 15 days. However, the Board will have the right to extend the issue

period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date 11. If our Company does not receive the minimum subscription of 90% of the issue, the entire

subscription shall be refunded to the applicants within forty two days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

The issue will become under subscribed after considering the number of shares applied as per the entitlement plus additional shares. The undersubscribed portion can be applied for only after the close of the Issue. To ensure that the Issue is successful the Promoters of The Ugar Sugar Works Limited have undertaken to subscribe to such unsubscribed portion either by themselves or through their group, including group companies and or associates if the issue does not receive subscription to the extent of 90% of the Issue size. This acquisition of additional Equity Shares, if allotted to the Promoters of The Ugar Sugar Works Limited or their group including group companies and or associates shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of our Company.

12. The Company/ Directors/ Lead Managers have not entered into any buy-back and/ or standby arrangements for purchase Of Equity Shares of the Company with any person. 13. All the legal requirements applicable till the filing of the prospectus/ Letter of Offer with ROC/ Stock Exchange will be complied with. 14. There are no other ventures of the Company who have commercial interest in the business of the Company.

33

OBJECTS OF THE ISSUE The following are the objects for which funds are proposed to be raised through the present issue:

1. To part fund the Promoter’s Equity contribution in Sadashiva Sugars Ltd which is implementing a Project to setup a 3500 TCD crystal sugar manufacturing unit and 15 MW cogeneration plant.

2. To repay Clean Loan of Rs 15 crores from Bank of India utilized for meeting the urgent funding requirement to ensure the timely implementation of the above mentioned project.

3. To meet issue expenses. The main object clause of our Memorandum of Association and objects incidental to the main objects enable the company to invest in the Equity of other company engaged in similar business. The funds requirement and details of deployment are based on the Techno Economic Viability Report prepared by MITCON Consultancy Services Ltd, Kubera Chambers, 1st Floor, Shivajinagar, Pune-411005 (hereinafter called MITCON). The fund requirements detailed below are based on our current business plan. In view of the competitive and dynamic nature of the industry in which we operate we may have to revise our business plan from time to time and consequently our fund requirement may also change. This may include rescheduling of our capital expenditure programme and increase or decrease in the capital expenditure for a particular purpose vis-à-vis current plans at the discretion of the management. In case of any variations in the actual utilizations of funds earmarked for the above activities, increased fund deployment for any particular activity will be met from the internal accruals. Rationale for Sadashiva Sugars Ltd., not coming out with IPO: The promoters of M/s. Sadashiva Sugars Ltd., approached our Company for a Joint Venture for setting up of this unit in 2006. During the year 2006-07, the sugar industry was passing through a difficult phase and coming out with IPO was not practical. Promoters of M/s. Sadashiva Sugars Ltd., had the funds to invest in this project and they thought once the Company starts performing they can think of going public. Project Location: Sadashiva Sugars Limited CIN U15421KA2002PLC029968 Nagral, Nainegali, 7th Kilometer from Almatti Bridge on NH-13, Bagalkot Taluk & District Karnataka State. At present there is no sugar factory in the vicinity of the proposed site & there is great potential of growing cane due to irrigation facilities of distributaries from back water of Narayanpur Dam/ downstream of Alamatti dam. It is a demand of local cultivators to have such industry in the area.

Therefore the The Ugar Sugar Works Ltd decided to join Sadashiva Sugars Ltd for setting up 3500 TCD sugar plant expandable to 5000 TCD with 15 MW cogeneration plant. Sadashiva Sugars Limited is a company promoted by Mr. R.S.Patil, Mr. G.S. Patil, Mr. S.G. Patil, Mr. Rajendra Patil and Mr. M.B.Thimmapur and incorporated as a public limited company on 3rd January 2002. The company was incorporated for the purpose of setting up a sugar manufacturing unit and cogeneration plant. Though the company had during 2003-04 planned setting up a 2500 TCD facility for manufacturing crystal sugar, the project could not achieve financial closure as the Karnataka Power Transmission Corporation was not entering into power purchase agreements for purchase of power from renewable energy projects. With the change in policies, Sadashiva Sugars Ltd decided to set up the project and entered into a Memorandum of Understanding with M/s. Ugar Sugar Works Ltd a public limited company incorporated under the Companies Act 1956, having existing sugar manufacturing units and cogeneration plants, for setting up the project as a joint venture. The project will include a cogeneration plant generating 15 MW of power utilizing bio-mass such as bagasse and other such biological waste.

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List of Directors Sadashiva Sugars Limited as on 31.03.2008

Sr. No Name of Director Designation 1 Mr. B. S. Patil Chairman 2 Mr. Shishir S. Shirgaokar Director 3 Dr. M. R. Desai Director 4 Mr. Sanat K. Shirgaokar Executive Director 5 Mr. I. S. Patil Director 6 Mr. R. Patil Director 7 Mr. G. S. Patil Director 8 Mr. R.S. Patil Director

List of Shareholders of Sadashiva Sugars Ltd., as on 31st March, 2008.

Name of Shareholder No. of Equity Shares % of Equity

Capital R.S.Patil 22,000 0 G.S.Patil 6,000 0 Rajendra Patil 282,000 1 B.S.Patil 610,000 2 Sanathkumar Shirgaonkar 1,000 0 I.S.Patil 1,001,000 3 Chandrashekar Yelamali 500 0 B.S.Patil Representing ABC 2,100,000 6 Rajendra Patil – HUF 9,035,100 24 Rekha Patil 700,000 2 Harish Y 5,000,000 13 Santhosh Karimattan 238,200 1 Future Exime (India) P.Ltd 500,000 1 Ugar Sugar Works Ltd 17,485,400 46 Mohan Shirgaonkar Investment Pvt Ltd. 200,000 1 Shishir Shirgaonkar Investment Pvt Ltd. 80,000 0 Sanjeev Shirgaonkar Investment Pvt Ltd. 80,000 0 Vinayaka Shirgaonkar Investment Pvt Ltd. 230,000 1 Suresh Shirgaonkar Investment Pvt Ltd. 80,000 0 Prabhakar Shirgaonkar Investment Pvt Ltd. 100,000 0 D.M Shirgaonkar Investment Pvt. Ltd. 150,000 0 Prafulla Shirgaonkar Investment Pvt. Ltd. 40,000 0

Total 37,941,200 100 Financials of Sadashiva Sugars Limited: Brief Financials as on 31st March As on 2008 2007 2006 2005 2004 2003 Share Capital 37,94,12,000 6,25,000 6,25,000 5,00,000 5,00,000 5,00,000 Share Application Money 9,00,52,928 21,30,08,064 Nil Nil Nil Nil Total Income 19,69,083 8,37,750 Nil Nil Nil Nil Reserves & Surplus 8,81,345 3,12,837 Nil Nil Nil Nil Pre-operative Expenses 14,92,71,904 3,62,69,568 28,63,646 7,46,896 7,35,945 7,03,400 Profit/ (Loss) after Tax 5,68,508 3,60,692 (47,855) Nil Nil Nil Earning Per Share(Rs) 0.04 5.77 (0.77) Nil Nil Nil

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Note: The profit shown in the Year 2006-07 is only out of Bank Interest earned. The company has not been carrying on any operation since incorporation. The sugar factory and cogeneration project is under implementation and expenses during the Project Implementation have been capitalized. For Audited Financial of Sadashiv Sugars Limited refer to page no. 144 of Letter of Offer. The break-up of expenditure of the Project being implemented by Sadashiva Sugars Ltd as estimated by MITCON is as follows: Rs in Lacs

Serial No Particulars Amount 1 Setting up of 3500 TCD crystal sugar manufacturing unit 7,752.50 2 15 MW Cogeneration Plant 4,435.47 Total 12187.97

The Margin Money for Working Capital to be brought in from long term sources was estimated at approximately Rs 669 lakhs thus the Project Cost was estimated at Rs 12857.00 Means of Finance

Rs in Lacs Serial No Particulars Amount 1 Term Loans from Banks 8,000.00 2 Promoters’ Equity Contribution

Patil Family 2380.00 (Promoters of Sadashiva Sugars Ltd) Ugar Sugars 2380.00 Promoters of Ugar Sugar Works Ltd 97.00

4857.00 Total 12,857.00

Tying up of Loan Funds - Sanction of Term Loans by Banks: Term Loans have been sanctioned for the project as detailed below:

State Bank of India Rs. 4000 Lakhs State Bank of Mysore Rs. 2000 Lakhs State Bank of Indore Rs. 2000 Lakhs Total Rs. 8000 Lakhs

Subsequent there was an increase in the project cost and the revised project cost as appraised by State Bank of India is as follows: Rs in Lakhs

Description Original Project Cost

Revised Project Cost

Land & Site Development Building & Civil works Plant & Machinery Misc Fixed Assets Contingency Preliminary & Pre-Operative Interest during construction Working capital

410 1600 9482 115 268 314

- 669

475 1950

10225 15

0 269 810 256

Total 12858 14000

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Escalation in Cost of Project:- The Cost of Project has gone-up due to escalation in the Machinery Cost, Increase in the Cost of Civil Work as prices of cement and steel and labour have increased. The increased Cost of the Project is proposed to be funded as under:

Rs in Lacs

Serial No Particulars Amount 1 Term Loans from Banks 8,000.00 2 Promoters’ Equity Contribution

Patil Family 3531.90 (Promoters of Sadashiva Sugars Ltd) Ugar Sugars 2458.49 Promoters of Ugar Sugar Works Ltd 9.61

6,000.00 Total 14000.00

Position of Promoters Contribution in Equity of M/s Sadashiva Sugars Ltd as on 31.03.08

( Rs in Lacs.) Contributors Total Funds Contributed

The Ugar Sugar Works Ltd 2208.49 Promoters of Ugar Sugar Works Ltd 9.61 Patil Family 2735.48 Total 4953.58 Pending the approval for the Rights Issues, loans sanctioned to Ugar Sugar Works Ltd including the loan from Bank of India was utilized to meet the urgent funding requirement of the project so as to ensure the timely implementation of the project. PROJECT SWOT ANALYSIS: STRENGTHS

1. The Project is being executed by Ugar Sugars who are pioneers in this field having several decades of exposure to the vagaries of the sugar industry and during the last decade exposure to the Co-Gen power plant too. The plant will be run under the overall guidance of Ugar Sugars Team whose help is always available to Jewargi Unit for recruitment of its operating and other personnel and also in commercial aspects.

2. The Project is an integrated one with Sugar and Co-Generation Power. The by product of the sugar plant, i.e. bagasse becomes the main fuel or raw material for the Co-gen power plant free of cost during the season and also partly during the off-season, thereby increasing the profitability.

3. Excellent irrigation facilities are now available in the proposed command area of the project from where the sugarcane is to be purchased, due to the recently commissioned Upper Krishna Cannal Project from Narayanpur Dam on the River Krishna.

4. The Shiragaonkar Family has a strong hold and influence in the district due to their name in Sugar Factory. They have deployed the net work of Agriculture Officers to develop & maintain good relationship with the local population especially in the rural areas and that too the farmers, which are very essential for succeeding in the agro based industry.

5. Availability of Reliable Technology, Plant & Machinery indigenously, both with proven track record normally helps in commissioning the Project without any difficulty.

WEAKNESSES

1. Sugarcane processing is a cyclical industry subjected to vagries of the nature. Diversion of cane for Khandasari or Gur manufacturing cannot be ruled out depending on their end prices.

2. The Command Area proposed for this project will have to be developed for sugarcane growing as the farmers in this region are not comfortable with sugarcane for want of irrigation facilities earlier. Hence, their mindset has to be changed to adopt new practices for sugarcane. Many farmers may resort to Paddy which can be harvested faster than sugarcane, requires less maintanence and quicker returns, though less.

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3. Availability of produced bagasse or other equivalent biomass or other fuels may be limited or cost may become prohibitive. Some extent of imported coal can be used but its price may vary according to Government import policy.

OPPORTUNITIES

1. There is scope for diversification to a distillery to manufacture alcohol, ethanol and Indian Made Foreign Liquor, using in house produced molasses.

2. There is scope for expansion of the sugarcane crushing capacity to 5000 TCD along with additional Co-gen power plant, as there is no Sugar factory within a radius of 50 Kms.

3. There is scope for setting up a sugar refinery to manufacture refined sugar with value added, which has greater acceptance in hotel industry, pharmaceuticals, exports, etc. In addition there is also scope to import raw sugar and refine the same.

4. There is scope for getting the project approved under the Carbon Credit Program to obtain additional income by trading the Carbon Credits in the International market.

THREATS

1. Several new units, especially with very large capacities, are coming up besides the existing ones going in for massive expansion. This might lead to unhealthy competition if the supply exceeds the demand.

2. The domestic sugar price depends heavily on the international market price for sugar, which is difficult to predict.

3. Attrition rate among the experienced manpower especially at middle and senior levels, which might affect the working of the factory.

4. Improper cane management program may result in insufficient sugarcane availability. Utilization of Rights Issue Proceeds Equity contribution by Ugar Sugar Works Ltd as co-promoter of the Project is Rs. 2458.49 lakhs. Out of this an amount of Rs 2208.49 lakhs has already been contributed through utilization of existing loans including the loan of Rs 1500 lakhs from Bank of India. Details of proposed utilization of the Rights Issue Proceeds are as follows:-

Rs. In Lacs Serial No Particulars Amount 1 Repayment of Clean loan from Bank of India utilized for meeting the

urgent funding requirement for implementing the Project at Sadashiva Sugars Ltd.

1500.00

2 Partly meet the Promoter’s equity contribution in Sadashiva Sugars Ltd which is implementing a Project to setup a 3500 TCD crystal sugar manufacturing unit and 15 MW cogeneration plant.

250.00

3 Issue Expenses 50.00 Total 1,800.00 Details relating to the loan obtained from Bank of India by The Ugar Sugar Works Ltd., is as follows: Loan Amount: Rs. 1500 Lakhs Rate of Interest: 2.75% below BOIBPLR presently 10.50% p.a. Security: Clean with personal guarantee of working directors. Terms of repayment: To be repaid in full along with interest by 30th September, 2008 and further extention is sought from Bank. * CA Certificate dated 02nd June 2008 regarding the purpose and utilisation of the Clean Loan has been obtained and has been included in the material documents.

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Sugar Manufacturing Rs. In Lacs Serial No.

Particulars of Expenditure Name & Address of Supplier

No. & date of quotation

Estimated Amount

1. Total 191 acres of Land and its development for Sugar Unit and Power Plant (Common)

410.00

2. Civil Work ** Main Factory Building &

Machinery Foundations Pratibha Constructions Engineers & Contractors Pvt. Ltd, Kolhapur.

600.00

Miscellaneous Work Shri.Durga Constructions, Dandeli

100.00

Cooling Towers Aminbhavi & Hegde, Dharwad

100.00

3. Plant & Machinery Mill House Walchand Nagar

Industries Ltd, PO. Sadashiva/ 05-06/7789/ dt. 22.02.06

1,383.00

Boiling House a. Centrifugal Walchand Nagar

Industries Ltd, PO.Sadashiva/05-06/ 10068/dt. 20.03.06

155.60

b. Crystallizer Shantaram Machineries Pvt. Ltd

Sadashiva/05-06/ 11297 dt. 14.04.06

189.25

c. Juice Sulphiter, Evaporator Set, Vaccum Pan

Lunar Engineers Sadashiva/05-06/ 10593/dt. 21.03.06

175.00

Turbine Turbine Shin Nippon

Machinery Co., Ltd., Japan

Sadshiva/ SNM/ 1822/ dt. 24.10.05

655.50

Cooling Towers Industrial Cooling Towers, Dharwad

Sadashiva/ 06-07/ dtd. 12.10.06

93.40

Automation Honeywell Automation I. Ltd

Sadashiva/ Automa-tion/ dt. 06.05.06

180.01

Electrical Dhanashree Enterprises

Sadashiva/ Power Cable/ 3044 dtd. 25.11.06

27.94

4 Balance of Equipments, Taxes, Freight, etc.

3001.8

5 Contingency @ 2.25% of Project Cost (Common for Sugar & Co-gen)

268.00

6 Preliminary & Preoperative Expenses. (Common for Sugar & Co-gen)

313.00

7 Sugarcane Development Exp 100.00 Estimated Total 7,752.50 15 MW Co-generation Unit Rs. In Lacs Serial No.

Particulars of Expenditure Name & Address of Supplier

No. & date of quotation

Estimated Amount

1. Total 191 acres of Land and its development for Sugar Unit and Power Plant (Common)

2. Civil Work **

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Main Factory Building & Machinery Foundations

Pratibha Constructions Engineers & Contractors Pvt. Ltd, Kolhapur.

600.00

Miscellaneous Work Shri.Durga Constructions, Dandeli

100.00

Cooling Towers Aminbhavi & Hegde, Dharwad

100.00

3. Plant & Machinery Boiler Walchand Nagar

Industries Ltd, POSadashiva Boiler/ 3890/ dt. 24.10.05

1,277.00

Turbine Ancillaries Shin Thermo Dynamics Engg. Pvt. Ltd.

Sadashiva/ STDE/ 3825/ dt. 24.10.05

400.00

Cooling Towers Industrial Cooling Towers, Dharwad

Sadashiva/ 06-07/ dated. 12.10.06

140.10

Automation Honeywell Automation I. Ltd

Sadashiva/ Automation/ dt. 06.05.06

180.01

Electrical Zen Projects Constructions Pvt Ltd

Sadashiva/ Switch-yard/ dt. 06.12.2006

308.94

Dhanashree Enterprises

Sadashiva/ Power Cable/ 3044 dated. 25.11.06

27.93

4 Balance of Equipments, Taxes, Freight, etc.

1,286.49

5 Computerization Management Estimate 15.00 Estimated Total 4,435.47 ** Land and Civil Work estimates are for both sugar unit and power plant. Land The requirement of land for the project has been estimated at 200 acres keeping in view the need for future expansions also. The project, in addition to the sugar factory, cogeneration plant, godown for storage of sugar, space for sugarcane, bagasse etc envisages administrative building, housing colony, shopping area, guest house etc. The company has purchased 54 acres of land. Since the land available is agricultural land and there are restrictions on ownership of agricultural land by companies, 136 acres of land purchased in the name of the promoters belonging to the Patil family. The process of conversion of the land for commercial use and transfer in the name of the company is presently on. Thus total of 191 acres will be available for the project. Details of Parties from whom Land has been purchased and purchase price Sr No

Name Area in Acre

Amount Rs. Address

1 K.B. Gandodi 6 1,314,570 Nainegalli, Tal, Dist-Bagalkot

2 Y.H. Halvar 14.57 3,032,855 Nainegalli, Tal, Dist-Bagalkot

3 B.S. Goudra 4.15 909,550 Nainegalli, Tal, Dist-Bagalkot

4 S.B. Goudra 10 2,190,500 Nainegalli, Tal, Dist-Bagalkot

5 Sita Bai S. Lamani 4.7 1,004,220 Nainegalli, Tal, Dist-Bagalkot

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6 S.Y. Goudra 14.58 3,032,825 Nainegalli, Tal, Dist-Bagalkot

7 Prashantagouda G.Patil 2.25 427,500

Goudaroni, Ron, Tal, Dist-Gadag 8 Abhay Iranagouda patil 2.3 437,000

Goudaroni, Ron, Tal, Dist-Gadag 9 Prashantagouda G. Patil 2 360,000


Goudaroni, Ron, Tal, Dist-Gadag 11 Rajendragouda R. Patil 6.18 1,204,125

Goudaroni, Ron, Tal, Dist-Gadag 12 Rajendragouda R. Patil 6.45 1,256,000

Goudaroni, Ron, Tal, Dist-Gadag 13 Prashantagouda G.

Patil 18.7 3,740,000

Goudaroni, Ron, Tal, Dist-Gadag 14 Abhay Iranagouda Patil 4.35 826,500








Goudaroni, Ron, Tal, Dist-Gadag 22 Sandeep B. Patil 6.1 711,000

Goudaroni, Ron, Tal, Dist-Gadag 23 Sandeep B. Patil 12.98 2,405,000

Goudaroni, Ron, Tal, Dist-Gadag 24 Prashantagodua G. Patil 5.85 1,111,500


Goudaroni, Ron, Tal, Dist-Gadag 26 Chandrashekar

V.Yelamali 0.85 84,000

S V Nagar, No 26 sector 63A, Navanagar Bagalkot

27 Prashantagouda G. Patil 3.5 665,000 Goudaroni, Ron, Tal, Dist-Gadag

28 Prashantagouda G. Patil 1.5 292,500 Goudaroni, Ron, Tal, Dist-Gadag

29 S.V. Nadagouda 8.28 1,572,500 Goudaroni, Ron, Tal, Dist-Gadag

30 S.V. Nadagouda 5.5 687,500 Goudaroni, Ron, Tal, Dist-Gadag

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31 S.V. Nadagouda 4 760,000 Goudaroni, Ron, Tal, Dist-Gadag

32 Chandrashekar V.Yelamali

4.41 3,280,715

S V Nagar, No 26 sector 63A, Navanagar Bagalkot




Grand Total 191.00 36989435.00 Summary Sr No

Item of Expenditure Amount (Rs).

1 Stamp Duty & Registration Charges 29,77,717.00 2 Conversion Charges 10,10,417.00 3. Bank Charges etc. 36,600.00 4. Land Price Paid 369,89,435.00 Total Land Value 410,14,169.00 All the Land is in the name of the Company. Out of total land 54 acres of land has already been converted in NA and for 105 acres of land acquired in the name of the company, the NA process is on and is expected to be completed in couple of months. The land acquired by the Company is free from all the encumbrances and has a clear title. Company has mortgaged these land to secure the loan taken from State Bank of India, State Bank of Mysore and State Bank of Indore. Connectivity for Transportation The project is coming up on land adjunct to National Highway No.13 and therefore transportation from and to the factory from within the district or outside is facilitated. Raw Material Availability: The project will require approx 6.40 Lakh tons of sugar cane for utilizing full capacity for 180 days. The company has estimated that approx 1 Lakh ton sugarcane is already available within the command area of 15 KMs and an additional 3500 acres of land has already been brought under sugarcane cultivation which will provide another 1.5 Lakh tons of cane. We envisage coverage of another 10000 acres of land within the command area within the next 1-2 years on account of the setting up of the mill. The soils of the nearby area of the proposed site are black, well drained & hence, most suitable for growing sugarcane. The factory is located very near to the Almatti Dam on River Krishna and the command area around the factory lies in between River Krishna and River Malaprabha. Approx 3500 acres of land have already been brought under sugarcane cultivation and the area has very good potential for sugarcane cultivation due to the nearby sources of water in plenty and irrigation facilities available from the canals of Almatti Dam. We do not foresee any difficulty in sourcing the required quantity of sugarcane as the crushing of sugarcane stabilizes and factory achieves ability to operate to the full installed capacity within 2 years of commencement of crushing.

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Utilities: Water: The total requirement of water for the sugar plant of 3500 TCD is estimated at 25 Lakhs liters/ day. The company proposes to meet the water supply requirements from Krishna River and will be drawn through a 10” dia pipeline. For the construction purposes the company has already laid a 4” pipeline and water is being drawn through this pipeline from River Krishna. Power: Conventionally the power requirement is met through captive generation. The total power requirement of sugar plant of 3500 TCD is estimated at 5 MW, which company proposes to meet through 1 turbo alternator of 15 MW. The surplus power of 9.22 MW is proposed to be sold to the Tata Power Trading Company Ltd. In order to meet the emergency power requirement during season i.e. on cleaning days & mill breakdowns as well as off- season requirements 1 DG Set of 1250 KVA is proposed to be provided. Bagasse Handling System

Bagasse from the mill house is fed to the Bagasse elevators. Bagasse from the elevator is carried through belt conveyor to the distribution carrier, this shall be transported to feed conveyor through a storage hopper, which in turn, feeds the other chain slat conveyor to feed the boiler. In case of shortage of bagasse due to problems in mill, reclaimed bagasse shall flow through conveyor to take care of the deficit. For stacking purpose, bagasse shall be directed towards stacking conveyor for generating bagasse pile by means of traveling wing tripper. This pile may be further compacted by dozers to increase storage capacity. For reclaiming the stored bagasse from the open yard, Bagasse shall be dozed to any of the reclaim hoppers on ground, which in turn shall be carried by underground off-take conveyor to over ground. Conveyor shall then transport this reclaimed bagasse to through flap gate to feed the boilers. Procured bagasse from other sugar factories shall be manually stored in the adjacent bagasse pile area under shed. Reclaiming of this bagasse shall be through the reclaim hoppers & the underground conveyor common to the main bagasse reclaim system.

Manpower The necessary technical and skilled manpower will be recruited from nearby areas. Sufficient unskilled manpower is available in the districts of Bagalkot and Bijapur and we do not envisage any problem in recruiting the required number of personnel. Products and Services Sadashiva Sugars Ltd. shall manufactures the following:- Sugar a) White Crystal Sugar b) Raw Sugar Power Generation Cogeneration of power utilizing bagasse and other biological waste. Sale of molasses Molasses generated by the unit shall be sold to distilleries. Nature of the Products: Sugar is consumed by public at large as well as by food processing industries and sale of sugar is regulated by the Government of India. Surplus power generated, i.e. after captive consumption, is proposed to be sold through the Tata Power Trading Company Limited

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Deployment of Funds so far As per the certificate dated October 22, 2008 from M/s. Santhappa & Co., Chartered Accountants the details of funds deployed in the project up to 30.09.2008.is tabulated below:-

Rs. In Lakh Sr. No. Particulars Certificate22.10.08 1 Civil Work 1,688.99 2 Purchase of Land 420.18 3 Purchase of Machinery & Equipments 9,403.08 Total 11,512.25 Other Expenses in connection with the project 4 Interest on Term Loans 1,443.17 5 Consultanry, Survey, Site Expenses & Others 799.68 6 Margin for Letter of Credit (Current Account with Banks) 469.41 7 Advance net of other Liabilities 492.12 Total Other Expenses in connection with the Project 3,204.38 Grand Total 14,716.63 Sources of Funds 1 Loan Funds from State Bank of India, State Bank of Mysore

& State Bank of Indore 9,131.69

2 Promoters’ Contribution 5,584.94 Total 14,716.63 Schedule and Actual status of Implementation:

Particulars Scheduled Completion on Status of completion Mill House Civil September, 2007 Completed on January, 2008 Mechanical September, 2007 Completed on February, 2008 Electrical September, 2007 Completed on March, 2008 Instrumentation October, 2007 To be commissioned Boiling House Civil September, 2007 Completed on January, 2008 Mechanical September, 2007 Completed on February, 2008 Electrical September, 2007 Completed on March, 2008 Instrumentation/ Automation October, 2007 To be commissioned Boiler Civil January, 2007 Completed on January, 2007 Mechanical September, 2007 Completed on February, 2008 Electrical September, 2007 Completed on March, 2008 Instrumentation October, 2007 Completed on March, 2008 Turbine House Civil September, 2007 Completed on January, 2008 Mechanical September, 2007 Completed on February, 2008 Electrical September, 2007 Completed on March, 2008 Instrumentation October, 2007 Completed on March, 2008 Electrical Evacuation Civil September, 2007 Completed on January, 2008 Mechanical September, 2007 Completed on February, 2008 Electrical January, 2008 Completed on June 2008 Instrumentation October, 2007 Completed on March, 2008

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Government/Statutory and other Approvals for the Project All initial approvals have already been received to enable implementation of the project except the following:- Conversion of additional agricultural land for commercial use and its transfer in the name of the company is pending. Part of the land for the project has been purchased in the name of original promoters of Sadashiva Sugars Ltd. Pending Govt. Approvals

M/s. Sadashiva Sugars Ltd., is yet to receive following pending approvals from the Government :



If the Company doesn’t get these approvals from the Government, Company cannot start its operations and this may affect on the implementation of the Project. The Company has already approached the Governmental Authorities for the approvals and whatever steps are required for getting these approvals have already been taken by the Company.

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BASIC TERMS OF THE ISSUE Basis for the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders of our Company whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in dematerialized form and on the Register of Members of our Company in respect of the Equity Shares held in physical form at the close of business hours on the Record Date, i.e., 29th September, 2008, fixed in consultation with the Designated Stock Exchange, i.e. Bombay Stock Echnage Limited.

Principal Terms and Conditions of the I ssue

Face value

Each Equity Share shall have the face value of Rs. 1.

Issue Price

Each Equity Share is being offered at a price of Rs.8 (including a premium of Rs.7). TERMS OF PAYMENT

Nominal Value per Share Premium per Share Total On Application & Allotment

1.00 7.00 8.00

Total 1.00 7.00 8.00 Payment should be made in by Cash/ Cheques / demand draft / drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub member of the Bankers’ to the Issue clearing house located at the centre where the application is accepted. A separate Cheques/ draft must accompany each application form. Outstation Cheques/ drafts will not be accepted and application(s) accompanied by such Cheques/ drafts will be rejected. Additional Equity Shares You are eligible to apply for additional equity shares in addition to the number of Equity shares to which you are entitled, provided you apply for all the Equity Shares offered to you without renouncing them, in whole or in part, in favor of any other person(s). The renouncees applying for all the equity shares renounced in their favor may also apply for additional equity shares. The company would endeavour to make allotment of additional equity shares in such lots. The allotment of the additional Equity Shares in above cases shall be at the absolute discretion of the Board of Directors of the company and in event of oversubscription, it will be considered on equitable basis with reference to the Equity Shares held on the Record Date and in consultation with The Bombay Stock Exchange and in case of Non-Resident, it will also be subject to the approval of Reserve Bank of India or such other requisite authority as may be necessary. Rights Entitlement Ratio

The Equity Shares are being offered on rights basis to the existing Equity Shareholders of our Company in the ratio of 1 Equity Shares for every 4 Equity Shares held as on the Record Date.

Fractional Entitlements

The shareholders are entitled to one equity share for every 4 shares held. In case of any shareholding other than in multiples of 4, the fractional entitlements arising therein, would be rounded off to the highest integer for determining the respective rights entitlement. The Equity Shares needed for such shares will be first adjusted from the unsubscribed portion of the Issue, if any, and should there be further requirement, from the Promoter and Promoter Group’s entitlement at the time of allotment.

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Joint-Holders

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint-tenants with benefits of survivorship subject to provisions contained in the Articles of Association of our Company.

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BASIS OF ISSUE PRICE

Qualitative Factors: • Promoters with adequate experience in the sugar industry. • Plant located on the bank of Krishna River, having abundant raw material potential. • Manufacturing of Sugar, Power generation, IMFL- Diversified product mix. • Assured quality standards ensured under ISI certification. • Utilizes non-conventional fuel for Power generation thereby reducing use of fossil fuels and resultant emissions of green house gases. • There is no dilution of equity by the promoters of the company. The present holding of the promoters is 43.67% which will be maintained by subscribing fully to their share in this Right Issue. Quantitative Factors:

1) Earnings per share (EPS) for the last 3 years:

Year EPS(Rs) Weight 2005-06 (FY ended on 30 September 2006) 0.22 1 2006-07 (FY ended on 31 March 2007)* 0.20 2 2007-08 (FY ending on 31 March, 2008) 1.60 3 Weighted Average 0.90 6

*Financial Year was changed from 30th September to 31 March during 2006-07 hence FY 2006-07 was of 6 months only As per the auditor certificate of The Ugar Sugar Works Limited dated 08.09.2008 the Accounting Standard 20 have been followed by the company in computation of EPS.

2) Price/Earnings Ratio (P/E) in relation to Issue price of Rs. 8 per share:

a. Based on 12 months ended 31.03.2008 5 b. Based on Weighted Average EPS 9 Industry P/E:

Highest Lowest Average

50.50 09.20 30.70

Source: Capital Market, Vol. XXIII/08, June 16-29, 2008.

3) Return on Net Worth:

Year % Weight 2005-06 (FY ended on 30 September 2006) 4.45 1 2006-07 (FY ended on 31 March 2007)* 11.78 2 2007-08 (FY ending on 31 March, 2008) 22.87 3 Period ended on 30.09.2008 (0.48) 4 Weighted Average 9.47 10

4) Net Asset Value (NAV)

Year Amount in Rs. a. 2005-06 (FY ended on 30 September 2006) 7.11

48

b. 2006-07 (FY ended on 31 March 2007)* 7.64 c. 2007-08 (FY ending on 31 March, 2008) 7.15 d. Period ended on 30.09.2008 8.99

Comparison of Accounting Ratios with Peers: FY-06 The closest comparables to our Company in the industry are Jeypore Sugars Company, Rajshree Sugars & Chemicals and Rana Sugars Limited. Comparable ratios for these companies are given below: Face

Value EPS P/E RNOW % Book value per

share Net Sales

The Ugar Sugar Works Limited 1.00 0.88 14.20 12.57 7.00 403.44 Jeypore Sugars Company 10.00 70.89 10.80 60.99 116.22 239.20 Rajshree Sugars & Chemicals 10.00 13.13 5.88 33.89 38.74 256.01 Rana Sugars Limited 10.00 3.80 6.74 14.78 25.68 113.64

*Source: Dalal Street- Small Cap 400 -2007 1. The face value of shares of Ugar Sugar Works Ltd. is Re. 1 and all other companies is Rs. 10 per share. 2. Financial ratio worked out considering the capital issued till date. Taking into account the above Qualitative and Quantitative factors, the Issue Price of Rs 8/- per share is considered justified. The face value of the Equity Shares is Re 1 per share and the Issue Price is 8 times the face value. Information as required by Government of India, Ministry of Finance, circular No. F2/5/SE/76 dated

February 5, 1977 as amended vide their Circular of even number dated March 8, 1977 is given below:

1.Working results of our Company are updated up-to 30th September, 2008 and shall be further updated in the Final Letter of Offer if necessary. 2. Save as stated elsewhere in the Letter of Offer there are no material changes and commitments, which are likely to affect the financial position of our Company since September 30, 2008 (i.e. the last date up to which the audited information is incorporated in this Letter of Offer)

3. Weekend Prices of the Equity Shares of our Company for the last four weeks on the BSE are as follows:

Week ended on Closing Price (Rs.) 3rd October, 2008 15.60 10th October, 2008 12.90 17th October, 2008 12.35 24th October, 2008 11.00

Source: BSE 4. Closing price of the Equity Shares of our Company as on 24th October, 2008 was Rs.11.00 per Equity Share on the Bombay Stock Exchange. 5. Highest and Lowest prices of the Equity Shares of the company on the Bombay Stock Exchange during the above period was as shown below:

Week Ended On High Price Rs. Low Price Rs. 3rd October, 2008 15.90 14.50 10th October, 2008 13.50 12.55 17th October, 2008 13.65 12.20 24th October, 2008 12.00 10.90

49

TAX BENEFITS The Board of Directors, The Ugar Sugar Works Limited, Sangli

Sub: Statement of Possible General Tax Benefits available to the Company and its Shareholders Dear Sirs, We hereby certify that the enclosed statement states the possible special (and major) as well as general tax benefits available to the Company under the Income Tax Act, 1961, presently in force in India and to the shareholders of the Company under the Income tax Act, 1961, Wealth Tax Act, 1957 and the Gift Tax Act, 1958, presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the statute. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon utilizing such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill. The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue. We do not express any opinion or provide any assurance as to whether :

• the Company or its shareholders will continue to obtain these benefits in future ; or • the conditions prescribed for availing the benefits have been / would be met with.

The contents of the enclosed statement are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. For M/s P.G.Bhagwat Chartered Accountants M.K.Shevade Partner Membership No. 18651 Place : Pune Dated : 24th October, 2008

50

STATEMENT OF POSSIBLE DIRECT TAX BENEFITS AVAILABLE TO THE UGAR SUGAR WORKS LIMITED (“THE COMPANY”) AND ITS SHAREHOLDERS:

UNDER THE INCOME TAX ACT, 1961

As per the current provisions of the Income Tax Act, 1961 (hereinafter referred to as “IT Act”) and the existing laws for the time being in force, the following benefits are available to the Company and to its shareholders. The tax benefits available to the Company and its Shareholders are as under as per the tax law presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfil.

TO THE COMPANY Special major tax benefits being availed by the Company are as follows:

The Company is claiming and is eligible for tax holiday as per the provisions of section 80IA of the Income Tax Act, 1961, in respect of its income from co-generation unit(s) and electricity for a period of 10 years.

General tax benefits available to the Company are as follows:

1. In terms of section 10(34) of the Act, any income by way of dividends referred to in Section 115-O (i.e. dividends declared, distributed or paid on or after 1st April, 2003 by domestic companies) received on the shares of any company is exempted from the tax.

2. By virtue of section 10(38) of the IT Act, the long term capital gains on sale of shares where the transaction of sale is entered into on a recognized stock exchange in India and is chargeable to Securities Transaction Tax shall be exempt from tax.

3. Under Section 48 of the Act, if the investments in shares are sold other than through a recognized stock exchange after being held for not less than twelve months, the gains (in cases not covered under section 10(38) of the Act), if any, will be treated as long-term capital gains and the gains shall be calculated by deducting from the gross consideration, the indexed cost of acquisition.

4. Under Section 54EC of the Act and subject to the conditions and to the extent specified therein, long-

term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term capital asset will be exempt from capital gains tax if the capital gains are invested in certain notified bonds within a period of 6 months after the date of such transfer for a period of at least 3 years. However, if the assessee transfers or converts the notified bonds into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would be chargeable to tax as long-term capital gains in the year in which the bonds are transferred or converted into money.

5. Under section 112 of the Act, long-term capital gains, (i.e. if the shares are held for a period exceeding

12 months) (in cases not covered under section 10(38) of the Act), arising on transfer of investment in shares, shall be taxed at the rate of 20% (plus applicable surcharge and cess) after indexation as provided in the second proviso to section 48, or at the rate of 10%(plus applicable surcharge and cess) without indexation at the option of the Company.

6. Under section 111A of the Act and other relevant provisions of the Act, short-term capital gains (ie. if the shares are held for a period not exceeding 12 months), arising on transfer of investment in shares listed on a recognized stock exchange, shall be taxed at a rate of 10% (plus applicable surcharge and cess) in cases where securities transaction tax has been paid.

7. Under section 32 of the Act, the Company is entitled to claim depreciation on tangible and intangible

assets as explained in the said section.

8. Subject to compliance of certain conditions laid down in section 32(iia) of the Act, the Company is entitled to additional depreciation on new plant and machinery used in production.

51

9. Under section 35D of the Act, the Company will be entitled to a deduction equal to 1/5th of the

expenditure of the nature specified in the said section, including the expenditure on the proposed issue and also for the purpose of preparation of project appraisal report by way of amortization over a period of five years, subject to the stipulated limits.

10. The Company will be eligible for tax holiday as per the provisions of section 80 IA of the Income Tax

Act, 1961, in respect of its income from power co-generation unit(s) and electricity for a period of 10 years. The Company will also be eligible to claim deduction under section 80JJA in respect of its income from generation of power using bio-degradable waste for a period of 5 years.

11. The company can carry forward the excess of tax paid under MAT (Section 115 JB) over and above

the normal tax payable on its Total Income. The same can be carried forward and set-off against normal tax payable in subsequent five years, subject to the stipulated limits.

TO THE SHAREHOLDERS OF THE COMPANY

Resident Shareholders :

1. In terms of section 10(32) of the Income-tax Act, any income of minor children, included in the total income of the parent under section 64(1A) of the IT Act will be exempt from tax to the extent of Rs.1500 per minor child.

2. In terms of section 10(34) of the Act, any income by way of dividends referred to in section

115-O received on the shares of the company is exempt from tax.

3. By virtue of section 10(38) of the IT Act, the long term capital gains on sale of shares where the transaction of sale is entered into on a recognized stock exchange in India and is chargeable to Securities Transaction Tax shall be exempt from tax.

4. In terms of section 88E of the Act, the securities transaction tax paid by the shareholder in

respect of the securities transactions entered into in the course of his business would be eligible for rebate from the amount of income-tax on the income chargeable under the head “Profit and gains of business or professions” arising from taxable securities transactions. As such, no deduction in respect of amount paid on account of securities transaction tax will be allowed in computing the income chargeable to tax as capital gains.

5. Under Section 48 of the Act, if the company’s shares are sold after being held for not less

than twelve months, the gains (in cases not covered under section 10(38) of the Act), if any, will be treated as long term capital gains and the gains shall be calculated by deducting from the gross consideration, the indexed cost of acquisition.

6. Under section 54EC of the Act and subject to the conditions and to the extent specified

therein, long-term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of investment in shares will be exempt from capital gains tax, if the capital gains are invested in certain notified bonds within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gain in the year in which the bonds are transferred or converted into money.

7. Under section 54F of the Act, long-term capital gains (in cases not covered under section 10(38) of the Act) arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the Company will be exempt from capital gain tax subject to certain conditions, if the net consideration from such shares are used for purchases of residential house property within a period of one year before and two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.

8. Under section 112 of the Act, long-term capital gains, (i.e. if the shares are held for a period

exceeding 12 months) (in cases not covered under section 10(38) of the Act), arising on

52

transfer of investment in shares, shall be taxed at the rate of 20% (plus applicable surcharge and cess) after indexation as provided in the second proviso to section 48, or at the rate of 10%(plus applicable surcharge and cess) without indexation at the option of the Company.

9. Under section 111A of the Act and other relevant provisions of the Act, short-term capital

gains (i.e., if the shares are held for a period not exceeding 12 months), arising on transfer of shares listed on a recognized stock exchange, shall be taxed at a rate of 10% (plus applicable surcharge and cess) in cases where securities transaction tax has been paid.

Additional Benefits Available to Non-Resident Indian :

1. Under section 115-I of the Act, the non-resident Indian shareholder has an option to be governed

by the provisions of Chapter XIIA of the Income Tax Act, 1961 viz. “Special Provisions Relating to Certain Incomes of Non-Residents” which are as follows:

a. Under section 115E of the Act, where shares in the company are acquired or subscribed

to in convertible Foreign Exchange by a Non-Resident Indian, capital gains arising to the non-resident on transfer of shares held for a period exceeding, 12 months shall (in cases not covered under section 10(38) of the Act) be concessionally taxed at the flat rate of 10% (plus applicable surcharge and cess) (without indexation benefit but without protection against foreign exchange fluctuation).

b. Under provisions of section 115F of the Act, long-term capital gains (in cases not

covered under section 10(38) of the Act) arising to a non-resident Indian from the transfer of shares of the company subscribed to in convertible Foreign Exchange shall be exempt from Income tax, if the net consideration is reinvested in specified assets within six months of the date of transfer. If only part of the net consideration is so reinvested the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition.

c. Under provisions of section 115G of the Act, Non-Resident Indians are not required to

file a return of income under section 139(1) of the Act, if their only income is income from forex asset investments or long term capital gains in respect of those assets or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

d. Under section 115H of the Act, where the Non-Resident Indian becomes assessable as a

resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year under section 139 of the Act to the effect that the provisions of the Chapter XIIA shall continue to apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

2. Provisions of the Act vis-à-vis provisions of the tax treaty : In terms of Section 90(2) of the Act,

the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to non-resident.

Mutual Funds :

In terms of section 10(23D) of the Act, all Mutual Funds set up by Public Sector Banks or Public Financial Institutions or Mutual Funds registered under the Securities and Exchange Board of India Act / regulation there under or Mutual Funds authorized by the Reserve Bank of India, subject to the conditions specified, are eligible for exemption from income tax on all their income, including income from investment in the shares of the company.

Benefits to Shareholders of the Company under the Wealth Tax Act, 1957 :

Shares of company held by the shareholder will not be treated as an asset within the meaning of Section 2(ea) of Wealth Tax Act, 1957. Hence shares are not liable to Wealth Tax.

53

Benefits to Shareholders of the Company under the Gift Tax Act, 1958 :

Gift made after 1st October, 1998 is not liable for any gift tax, and hence, gift of shares of the company would not be liable for any gift tax.

Note :

1. All the above benefits are as per the current tax law as amended by the Finance Act, 2008.

2. The stated benefits will be available only to the sole / first named holder in case the shares are held by joint holder.

3. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall

be further subject to any benefits available under the Double Taxation Avoidance Agreements, if any, between India and the Country in which the non-resident has fiscal domicile.

4. In view of the individual nature of tax consequences, each investor is advised to consult his /

her own tax advisor with respect to specific tax consequences of his / her participation in the scheme.

54

INDUSTRY OVERVIEW

Global Scenario Sugar is produced in more than 100 countries through out the world using either sugarcane (70 to 75%) or Beet. India and Brazil are the two major sugar producing countries in the world besides Australia, Thailand, China, Mexico and few European countries. The developed countries subsidize export of sugar in order to keep realization high in the domestic markets. The current WTO guidelines require that subsidies provided by the developed countries on sugar exports need be lower. The WTO had ordered European Union to discontinue dumping of subsidized sugar in the global markets within a given time period. The current sugar production worldwide is also on the higher side as in the domestic market. Since the price of oil is touching US$ 100 a barrel, Brazil which has a ready infrastructure may switch over to production of Ethanol from cane juice resulting in the International market picking up a little in the next year.

World Sugar Production Million Tons

2006-07 2005-06 Production 162.62 152.08

Consumption 153.51 149.86

Surplus / (Deficit) 9.12 2.22

Import demand 44.44 46.68

Export availability 47.49 46.69 Source: International Sugar Orgn quarterly market outlook, May 2007 The sugar industry in India is amongst the few industries that have successfully contributed to the rural economy of the country. It has done so by commercially utilizing the rural resources to meet the large domestic demand for sugar and by generating surplus energy to meet the increasing energy needs of India. In addition to this, the industry has also become the mainstay of the alcohol industry. The sector supports over 50 million farmers and their families, and delivers value addition at the farm side . The sector also has a significant standing in the global sugar space. The Indian domestic sugar market is one of the largest markets in the world, in volume terms. India is also the second largest sugar producing geography. India remains a key growth driver for world sugar, growing above the Asian and world consumption growth average. Globally, in most of the key geographies like Brazil and Thailand, regulations have a significant influence on the sugar sector. Perishable nature of cane, small farm landholdings and the need to influence domestic prices; all have been the drivers for regulations. In India, too, sugar is highly regulated. Since 1993, the regulatory environment has considerably eased, but sugar still continues to be an essential commodity under the Essential Commodity Act. There are regulations across the entire value chain land demarcation, sugarcane price, sugarcane procurement, sugar production and sale of sugar by mills in domestic and international markets. However, fundamental changes in the consumer profile and the demonstrated ability of the sector to continuously ensure availability of sugar for domestic consumption has diluted the need for sugar to be considered as an essential commodity. According to a recently conducted nation wide survey, nearly 75 percent of the total non-levy sugar is consumed by industrial, small business and high-income household segments. Further, even for a low-income household, 10 percent increase in sugar price would result in less than 1 percent increase in the monthly food expense. While the sector grows in stature and continues to play a key role in the economy, it is expected to face some significant challenges. There is lack of alignment between sugarcane and sugar prices. As a result, it leads to cane payment arrears and induces cyclicality. The arrears typically result in the eventual need for government support packages, while the pronounced cyclicality destabilizes the sector revenues. The average sugarcane yields have also, at best, stagnated, and the average recovery is amongst the lowest in comparison with key sugar producing nations. Large sugar inventory exposure

55

and sugar price volatility also results in high sugar price risk for the sector. In the past ten years, on an average basis, even the large listed sugar firms have struggled to generate Return on Invested Capital (ROIC) over and above their cost of capital. This is primarily due to high mandated fixed cane prices and volatile sugar prices. Present Scenario Currently the sugar industry is passing through a phase of surplus production and there is an expected surplus of 7.8 million MT of sugar. This has been largely due to the remunerative sugar cane prices that are prevalent for the last two years as well as the inability of the sugar industry to export sugar when the world prices were viable last year. As a result, the sugar stocks in India are at an all time high which has depressed the domestic sugar prices making it difficult for the mills to pay the farmers. A host of factors, including a coincidental surplus in the international market, has intensified the seriousness of the situation.

Sugar Cane & Sugar Production Trend

050

100150200250300350400

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

Year

Prod

uctio

n in

Lac

s of

Ton

s

Sugar

Sugar Cane

The figures for 2007-08 are projections. The year refers to Sugar Year i.e. October to September. Source: Indian Industry Monthly Review – December 2007 CMIE The sugar sector is impacted by induced cyclicality, since high sugar and sugarcane prices lead to increase in production at the cost of other crops. The resulting low prices for sugar impact the ability of mills to pay the farmers, thus leading to creation of arrears. High arrears lead to a significant fall in cane cultivation in the next year, leading to high sugar prices and increased attractiveness of cane. Domestic demand opportunity India accounts for approx 14% of world sugar consumption and in 2007, the domestic sugar consumption is estimated to be 20 million MT. It is expected that the drivers for consumption i.e. the GDP growth and population growth would continue to grow at current rates. Based on the past ten years' growth in consumption and estimates from various independent sources, it is expected that in 2017, the domestic sugar consumption would be approximately 28.5 million MT. Given the high cost of imports and the strategic importance of food security, India would need to target its production in excess of domestic consumption.

56

Projected Domestic Consumption of Sugar

0

100

200

300

400

Year 2007-2017

In Lak

cs of T

ons

Given the past trend in production cyclicality, sugar equivalent to 1.5 months of consumption i.e. an additional 3.5 million MT of sugar would need to be produced by 2017. Price of Sugar in the Domestic & International Markets 2006-07

Sugar Prices per Metric Ton declined on an average by approx 20% in thedomestic and 26% in the international markets during 2006-07. Source: Indian Sugar Mills Assn www.isma.com Exports International trade is of strategic importance to India as it can help maintain stability in the domestic market, despite the cyclicality in production. If there is a sugar surplus either due to excess production or due to greater economic attractiveness of cane for ethanol and cogeneration in the future, exports could be used if the surplus cannot be managed in the domestic market. Acceptability as a credible exporter will provide the Indian sector an alternate set of markets for diverting surplus production. Similarly, in case of deficits, raw sugar imports could help bridge the supply gap.

Rs. Per Ton

0

5000

10000

15000

20000

25000

Domestic International

Nov-06Nov-07

57

India has the potential to export to major Indian Ocean markets, due to freight competitiveness with respect to key competitors, Brazil and Thailand. Due to the increasing emergence of destination refineries, key markets are importing greater share of raw sugar, and India's competitiveness for raw exports is relatively lower as of today. Currently, India's competitiveness is higher in markets, where share of white sugar imports as percentage of cumulative imports is higher. Going forward, India would need to build the capability to produce raw sugar and refined sugar of international quality standards, in order to leverage the export opportunity. The target markets are estimated to import 10 million MT of sugar by 2017. India would be able to leverage this opportunity through productivity improvements and alignment of cane and sugar prices in the domestic market. Productivity Increase in sugar production would be primarily through productivity improvements and increase in the crushing capacity of existing mills. The average sugar recovery rate has ranged between 10.20% and 10.50% during the past 7 years and the sector has the potential to improve sugarcane yields as well as improve the sugar recovery rate. The area under cane would also need to increase and this would be possible by better utilization of existing cane demarcated areas. This would also ensure minimal impact on other crops. Sugarcane is a water intensive crop and is dependent to a large extent on monsoons. Adoption of advanced techniques like drip irrigation would help achieve sustainable growth for the sector. Encouraging efficiency of the mills, quality improvements in cultivation practices and strengthening of relationship between the farmers and mills will all require greater intervention of the policy makers. Larger investments in research and development of seed varieties would be required for improving farm productivity. By-products Indian Made Liquors - Industry Structure and developments: The total Indian liquor market is estimated at around 750 million litres The products consist of Whisky, Rum, Brandy, Gin and Vodka. The country liquor market is a regional market with small manufacturers spread across various States and is estimated to be larger than the above market of Indian made liquors. The prominent liquor manufacturers have a nation wide presence with a network of distributors and retail merchants. The whisky segment which is approx 60% of the market composition is classified into Scotch, Super Premium, Premium, Prestige/Deluxe, Regular, Medium and Cheap segments. Regular whisky is the single largest segment in the whisky market, comprising approximately 40% of the whisky market. This segment is also the most competitive with nearly 30 brands competing in the segment. With increase in the price at the consumer level due to higher taxation, there is a downward shift towards cheaper products in key whisky and rum segment. The major volume growth in the whisky segment is coming in from the cheap segment. The cheap whisky segment has been growing at a faster rate as compared to the overall market. Prestige/Deluxe segment has recorded impressive growth over the past 3 years and the growth rate is likely to remain strong in future. The low per-capita consumption in India, the high volume in the unorganized cheap segment of the spirits business with its likely transition into the organized sector, the changing consumer perception of alcohol and the progressive regulatory changes are the key drivers to the growth of this industry. Ethanol Fuel ethanol and surplus power production through cogeneration are the other by-products' related opportunities. Globally energy security and environmental concerns are driving the adoption of fuel ethanol across countries. Leading countries including Brazil, U.S., Europe, Australia, Canada and Japan have established fuel ethanol programmes. In the future, global fuel ethanol demand is likely to grow exponentially. Global ethanol exports, currently at 6.5 billion litres are expected to increase to 50 to 200 billion litres by 2020. Power It is estimated that by 2017, there will be a total exportable power potential of approximately 9,700 MW. This can fulfil almost 6 percent of the additional power requirement of 128 GW by 2017. The sector can also generate 48 million carbon credits through cogeneration.

58

Regulatory Issues There are arguments in favour of and against complete deregulation. However deregulation may expose the farmers, millers and consumers to significant risks including risk of sugarcane off take, sugarcane availability and sugar availability, respectively. Sugar is regulated at the central and state levels. Hence, it is also subject to conflicts that arise from diverse perspectives at the two governance levels. Some of these conflicts relate to announcement of the Statutory Minimum Price (SMP) and State Advised Price (SAP), incentive schemes, molasses control and cogeneration (MNES Act). Sugarcane is covered under the Essential Commodities Act due to its perishable nature and the need for regulation on cane supply and pricing. Given the large number of farmers with small landholdings involved in farming cane, sugarcane needs to be regulated. Cane is also increasingly being viewed as a strategic crop due to the emergence of ethanol and cogeneration. Since cane is produced primarily in nine states but cane based products are consumed across the country, it needs to be regulated in a unified manner. Both central government as well as the state government regulate and legislate cane pricing, sometimes causing avoidable aberrations through conflicting laws. A consensus between central and state governments on cane pricing is therefore an essential prerequisite for healthy development of the industry.

59

BUSINESS OVERVIEW Background & History We, The Ugar Sugar Works Ltd. (USWL) is one of the pioneers in sugar production in the state of Karnataka. The Company was incorporated on 11th September 1939, under the patronage of his late Highness The Rajasahab of Sangli. In the year 1940 the Late Highness invited Dr. S.R.Shirgaokar, maternal uncle of late Mr. V.S.Shirgaokar – (the first Chairman & Managing Director of Ugar Sugar Works) for setting up a sugar plant. Late Mr.V.S.Shirgaokar under the guidance of late Dr. S.R.Shirgaokar, set up the sugar factory at Ugarkhurd – a fertile village on the banks of River Krishna, with a capacity of 500 TCD which started crushing on 21 April 1942. Subsequently Late Mr. Suresh Shirgaokar, younger brother of late Mr. V.S.Shirgaokar, who was popularly known as ‘Babu Kaka’ took over as Chairman & Managing Director. The management of Ugar Sugar Works Ltd was carried out under the administration of M/s. Shirgaokar Brothers – a partnership firm – as Managing Agents till 31 December 1969. Under the administration of the Managing Agents, crushing capacity of the factory was raised to 2000 TCD from time to time till 31st December 1969. Subsequently the management was assumed by the present promoters directly. M/s. Ugar Sugar Works Ltd. presently has an integrated 10000 TCD Sugar plant with distillery and Indian Made Liquor section and a 45 MW Co-generation plant located at Ugarkhurd, Distt: Belgaum, Karnataka State. Further 3500 TCD capacity is being added alongwith a 15 MW cogeneration plant at Malli Village, Jewaragi Taluka, Gulbarga District, Karnataka State In addition. we are presently implementing 3500 TCD capacity sugar project with 15 MW cogeneration plant jointly with Sadashiva Sugars Ltd at Nagral Village, Taluk & District Bagalkot, Karnataka State, part funding of which is proposed through the present rights issue. Crushing Capacity Additions by The Ugar Sugar Works Ltd.

Addition of Crushing

Capacity in Tons per Day (TCD)

Cummulative Capacity

TCD

Year Plants and their Locations

800 800 1955-56

400 1200 1960-61

800 2000 1969-70

3000 5000 1988-89

1500 6500 1994-95

1000 7500 1997-98

2500 10000 2002-03

The Ugar Sugar Works Ltd. Ugarkhurd Distt: Belgaum Karnataka State

3500 13500 2007-08 The Project

has been completed

and trail runs are on

The Ugar Sugar Works Ltd , Malli Village, Jewaragi Taluka, Gulbarga District, Karnataka State

3500 Joint Venture for the purpose of

which the present Right Issue is

made

2007-08 The Project

has been completed

and trail runs are on

Sadashiva Sugars Ltd, Nainegalli,

Nagral Village, Taluk & District Bagalkot, Karnataka State

60

Diversification/Forward Integration into Distillery and Cogeneration of Power

In the year 1963 we diversified into distillery to utilize the molasses generated by the sugar factory. The distillery at present has a capacity of 75000 Litres Per Day (30000 LPD batch type & 45000 LPD continuous type). Out of this we have the facility to produce 20000 LPD Ethanol and 15000 LPD Extra Neutral Alcohol with blending and bottling of 9 different Indian Made Liquor varieties. We are producing high quality and premium brands such as Vatted Malt, Old Castle Whisky etc. The brands of the company are well accepted in the market.

Upto the year 1996-97 we were generating power for captive consumption only utilizing part of the bagasse generated by the sugar factory. During 1997-98 we set up a cogeneration plant with a capacity to produce 28 MW energy. This has since been increased to 44 MW during 2003-04. As on date we export 25 MW power and the balance is captively consumed.

We have also set up facility for generation of 1 MW power through heat engines run on bio methane gas originating from chemical digesters. Alternatively this gas can be used as a fuel in package boiler to produce steam. Methane gas generated by biodegradation of filter cake, which is one of the by-products of the Sugar factory, is used for domestic consumption and the gas is supplied to 170 residential quarters adjacent to the factory. The sugar factory has also been provided with full fledged effluent treatment plant. The plant includes Chemical digesters, concentration and spray drying of spent wash and mixed lagoons for anaerobic and aerobic treatment of sugar factory effluents and distillery spent-wash etc.

A summary of the various capacities of our factory at Ugarkhurd, Belgaum Distt, Karnataka are provided in the following table:

Product Installed Capacity Production 2007-08

Production 2006-07 (6 months)*

Production 2005-06

Production 2004-05

Sugar 10000 TCD** 2.21 Lakh Tons 1.94 Lakhs Tons 2.19 Lakhs Tons 1.16 Lakhs TonsSugar Ships 600 MT per year 0.00 0.00 0.00 0.00 Rectified Spirit 243.69 LBL per

year@ 139.61 LBL 69.86 LBL 121.72 LBL 93.07 LBL

Denatured Spirit 24.00 -do- 29.32 –do- 4.16 -do- 14.17 -do- 9.21 -do- Potable Alcohol 81.00 -do- 67.64 –do- 28.44 -do- 53.26 -do- 44.79 -do- Arrack 96.00 -do- 12.95 –do- 9.39 -do- 25.57 -do- 62.54 -do- Electricity 10.56 Lakhs KW

per day 1821.93 Lakh KW

862.62 Lakhs KW 1342.14 Lakhs KW

929.15 Lakhs KW

*The financial year was changed from September to March and therefore data is only for part of the crushing season. **The installed capacity indicated is Sugar cane crushing capacity per day. Utilization of capacity with reference to crushing of sugar cane is provided on page No. 61 of this Letter of Offer @ LBL = Lakhs Bulk Litres Main Objects of the Company: According to the Memorandum of Association the Objects for which the Company was established are :-

(1) To produce, manufacture or turn out sugar from sugarcane or jaggery or to produce, manufacture or turn out jaggery from sugarcane or such other material produce or crop cultivated or caused to be cultivated or purchased by the Company and as may be found capable of producing sugar or jaggery.

(2) To purchase, take on lease, or otherwise acquire for the purposes of the Company, any estate, lands,

buildings, easements or other interests in real property and to sell, let on lease, or otherwise dispose of or grant rights over any real Property belonging to the Company throughout the Indian Union.

(3) To cultivate or give for cultivation land, and to do all such incidental things as may be deemed

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necessary, for growing, planting and producing sugarcane or agricultural produce of any and every description, type, quality, and brands as shall be found capable of producing sugar and jaggery therefrom and to cultivate any other profitable crops or any experimental crop other than sugarcane on the lands held by the Company and to manufacture finished goods out of the said crops.

Changes in the Objects Clause of Memorandum of Association since Incorporation:

Date of Change Purpose July 04, 1994 Addition of clauses 27 to 37 in Objects Clause to enable diversification into

other businesses including cogeneration of power. Changes in the authorized capital are detailed in the Share Capital History provided on page No. 23 of this Letter of Offer. Products and Services The Ugar Sugar Works Ltd. manufactures the following:- Sugar a) White Crystal Sugar b) Raw Sugar Distillery a) Rectified Spirit b) Extra Neutral Alcohol c) Ethanol d) Indian Made Liquors Power Generation Cogeneration of power utilizing bagasse and other biological waste. Sugar Production Our Sugar Mill has an installed capacity of 10000 TCD and depending on the availability of sugar cane have been able to utilize it during the season. The quantitative details of sugar cane crushed and sugar produced during the past five years are tabulated below:

Year Capacity available in Metric Tons

Cane Crushed In Metric Tons

*Utilization of Capacity %

Sugar Produced In Metric Tons

Sugar Recovery Rate %

2003 18,00,000 14,67,798 81.54 172,449 11.75 2004 18,00,000 8,37,383 46.52 87,643 10.47 2005 18,00,000 10,43,480 57.97 116,318 11.15 2006 24,75,000 18,76,166 75.80 218,760 11.66 2007 26,18,000 22,01,023 84.07 248,902 11.31 2008 19,75,000 19,49,390 98.07 221,144 11.58

*The installed capacity is taken at 18,00,000 Metric Tons equivalent to 180 days x 10,000 MT for 2003 2004 and 2005 and 13750 x 180 for 2006 including the capacity of units at Tasgaon and Phalton run on lease. The accounting year of the company has been changed from 30 September to 31 March from 2007, though the figures included for 2007 are for the full 2006-07 crushing period of 187 days which commenced on 27.11.2006 and ended on June 01, 2007 including the leased units with a crushing capacity of 4000 TCD. The crushing typically starts with a smaller quantity and may reach full capacity within 10-15 days from the date of commencement of crushing. Similarly as the season draws towards the last 15 days of the crushing season the arrivals of sugarcane taper off. Therefore the mills are able to crush full capacity only for approx 5 months and therefore we may say that the capacity is utilized to the full extent depending solely on the availability of cane.

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While the average sugar recovery rate for the industry has ranged between 10.30% to 10.60% during the past 5 years we have consistently been able to show better recovery rates. This has been possible due to better quality cane availability enabled by us through our Research & Development efforts. Sugar Manufacturing Units on Lease Anticipating an upward movement in sugar prices. we took two sugar units (a) New Phalton Sugar Works Ltd, Sakharwadi, Taluk Phalton, District Satara, Maharashtra with a crushing capacity of 1250 TCD; and (b) Tasgaon Taluka Sahkari Sakhar Karkhana, Turchi, Tasgaon Taluka, District Sangli, Maharashtra with a crushing capacity of 2750 TCD on lease during the year 2005-06. These units had only sugar producing facilities and the by-products such as molasses and bagasse had to be sold. Prices of sugar declined sharply during 2005-06 and 2006-07 and we incurred total losses to the tune of Rs. 30.95 crores upto September 2007. The Phalton unit has been handed back to the lessor w.e.f. November 01, 2007. In the case of the Tasgaon unit, the Maharashtra State Cooperative Bank has taken over possession of the assets of the unit under the SARFESI Act w.e.f. 30th August 2007. Thus we have stopped operating both these units. The sugar prices saw a decline of 20% in the domestic market and 26% in the international market during November 2006 to November 2007. The sugar industry in general suffered losses from the Sugar segment because of the decline in sugar prices while the cane prices remained unchanged. Our sugar segment suffered losses during the financial years ended 30th September 2006 and 31 March 2007 and the six months period ended 30th September 2007. Sugar Ship Project We have set up a 100% Export Oriented Unit for manufacturing sugar cubes in the shape of ships which are called Sugar Ships for export to Germany as per a Contract entered into by us with M/s.Fragies Verwaltung Gmbh, Haffenstrasse I – 25980 Rantum/Sylt, Germany. The MOU provides for 100% buyback, by M/s. Fragies, of the sugar ships manufactured by us, at a cost plus pricing arrangement. The entire plant and machinery for the project has been recommended by M/s. Fragies to be purchased from and has since been supplied by M/s. Kloeckner Haensel Processing Gmbh, D-30103, Hannover, Germany. The project has been completed at a total cost of Rs. 27 crore and trial runs have been commenced. Though according to the agreement with the machinery supplier trial run was to be undertaken for a maximum period of 3 weeks, trial runs have been continuing for the past several months. Presently we are outsourcing refined sugar and other inputs which go into the manufacturing of sugar ships. The unit has the capacity to produce 45 lakhs boxes, each box containing 250 gms totaling 1125 Metric Tons per annum. Export obligation: The Company has an export obligation of Rs. 20,70,41,208 in respect of Turbine imported from Japan for using at Jewargi Unit of the Company against EPCG License No. 0730004954 dated 04.12.2006. Similarly Company has to meet an export obligation of 45 Lakh boxes of 270gms (0.92 Euros per box of sugar ship) Sugar ships per annum for a period of 5 years against the 100% EOU. If the Company fails to meet this obligation, the Company will have to pay the duty saved with interest and penalty, approximately Rs. 2.58 crores against EPCG and Rs. 5 crores against EOU. The company has 8 years time from the installation of this machinery i.e. January, 2008 for fulfillment of this export obligation and Company do not see any problem in meeting this Export obligation. Further, in respect of 100% EOU, the Company is exploring the possibilities of export to Asia pacific to meet the shortfall of the export obligation of export to Germany. Sugar Manufacturing Process Sugarcane is harvested and clean cane is loaded in the vehicles and brought to the factory. The gross weight is taken and cane is unloaded on the feeder table with the help of electric crane. The tare weight of the vehicle is taken to arrive at the weight of the cane. Cane is fed to cane carrier from the feeder table. The preparatory devices viz. Kicker, cutter, fibrizer etc., are installed on the carrier for the preparation of cane. The prepared cane is taken to Mills by second carrier where juice is extracted using compound imbibitions process and hot water is applied for maximum extraction before last mill.

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Mixed juice is strained and sent for processing. Water for imbibition’s and mixed juice both are weighed in automatic weighing scale & by mass flow meter respectively. Bagasse (residue of cane after juice extraction) is used as fuel in the boiler and surplus bagasse saved in the form of bales.

Mixed juice is clarified by sulphitation process by heating at 700C in a juice heater, phosphoric acid, sulphur dioxide gas & milk of Lime are used as clarificants. These are thoroughly mixed in juice sulphiter. Then the sulphited juice is heated to 1050C in another juice heater. This juice is passed on to continuous clarifier through flash tank for settling. The settled mud is filtered with the help of vacuum filter where filtrates are separated and sent back to process. Hot condensate water is used to wash the cake & recover maximum sugar from the cake. The washed filter cake with minimum sugar content is sent out as bye product. Decanted clear juice from clarifier is taken to Evaporators (multiple effect). The concentration is increased to syrup consistency. The heat required for heating and evaporation is used from exhaust steam and the bled vapours from evaporators. Exhaust steam is obtained from prime mover turbine of power generation. The syrup from evaporators is sulphited to pH of 5.0 – 5.2 & it is used in vacuum pan boiling to produce ‘A’ Massecuite. The necessary seed crystals are taken in the pan and boiled with syrup / melt at about 600C. This gives ‘A’ massecuite. ‘A’ Massecuite from the pan is discharged into crystallizer. Then the sugar crystals are separated from the surrounding film of mother liquor in centrifugal machine. It is also washed by superheated water wash. The liquor is called as ‘A’ Heavy molasses and the white crystal sugar is dropped on the hopper from centrifugal machine. The sugar is conveyed on hoppers graded & bagged. The crystal sugar gets dried & cooled while conveying on hoppers. ‘A’ heavy molasses is subjected to second boiling to get ‘B’ Massecuite there by B- sugar is used as Seed and / or excess it melted and melt is used in ‘A’ boiling. B-Heavy molasses is subjected to third boiling to get C- Massecuite and there by C- sugar and final molasses. C- sugar is magmized and double cured. The mother liquor separated is called C-Light molasses. It is used in C boiling. C-double cured sugar is melted and melt is used in A boiling.

Final molasses is weighed and stored in steel tanks to be used by the distillery.

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SUGAR MANUFACTURING PROCESS – FLOW CHART

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Sale of Sugar Sugar sales are governed by sugar control order of Central Government & the releases are given to the Sugar Factory in proportion to their production / stock of season with the factory. Factory will follow these rules for sugar sale & abide by the rules. Sugar is sold to Government nominees & or wholesale dealers registered with the Government. Government of India permits sale of 90% of the production in the open market as per releases permitted by the government and the remaining 10% is sold as levy sugar to be distributed by the Government through the Public Distribution System. Sugar permitted to be sold in the open market can also be exported either White or Raw, depending upon the local conditions i.e. the capacity to store sugar and the market conditions. Distillery

We are utilizing the molasses generated by the sugar factory to produce potable alcohol, Ethanol etc in the distillery. The distillery at present has a capacity of 75000 Litres Per Day (30000 LPD batch type & 45000 LPD continuous type). Out of this we have the facility to produce 20000 LPD Ethanol and 15000 LPD Extra Neutral Alcohol with blending and bottling of 9 different Indian Made Liquor varieties. We are producing high quality and premium brands such as Vatted Malt, Old Castle Whisky etc. The brands of the company are well accepted in the market.

Distillation Process

We currently have two distilleries and Indian Made Liquor (IML) units in our premises at Ugar Khurd. The first one is an old distillery of capacity 30,000 LPD, while the second one is a newly constructed distillery from Praj Industries, Pune having a capacity of 45,000 LPD. The Praj distillery runs on the continuous fermentation technology. The whole unit of distillation process is having material of construction in copper, which gives a very good quality of spirit. This plant is having a high level of computerisation and automation.

Continuous Fermentation

We have adopted & realtered 30,000 Litres continuous fermentation by removing the old batch type Fermentation Process. The Technology adopted continuous Fermentation (Ugar High Yield Fermentation Technology). The Specialty of Fermentation is continuous and final alcohol percentage in the process is 8.5% to 9.5% high yield. The fermentation foam is separated by a mechanical process.

The continuous fermentation system called “Hiferm GR” consists of three main fermenters where-in the alcoholic fermentation takes place. The wash is then taken for distillation from the fermentation system, which is incorporated with the molasses weighing system, molasses broth mixer and air blower.

The fermentation system is incorporated with yeast vessels of capacities 0.130 m3, 0.692 m3 and 4.452 m3. The vessels are used to propagate special type of yeast strain. During the process, required doses of nutrients and oxygen are supplied through the filtered air. The temperature is maintained by circulation through the plate type heat exchanger.

When the desired number of yeast cells are developed, the whole biomass is transferred to main fermenter, where alcoholic fermentation takes place. Fermenter No. 1 is connected to continuous molasses diluter. In the molasses diluter proper dilution takes place which is continuously fed to fermenter No. 1. The overflow of fermenter No. 1 is taken to fermenter No. 2 and the overflow of fermenter No. 2 is taken to fermenter No. 3 where almost all the fermentable sugars are exhausted and fermentation reaction is ceased. This wash is ready for distillation. Thus the fermented wash from fermenter NO. 3 is continuously taken to a continuous steam distillation unit known as “ECOFINE-P”.

The distillation process consists of an Analyser column 1695-mm dia, a Degassifying column 1250-mm dia, Aldehyde column 560 mm dia, Rectifying column 1085 mm dia, and exhaust column 1085 mm dia with proper number of trays. It is also incorporated with Beer heater, principal condenser and vent condenser of capacity 25.4

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mm O.D for affecting partial condensation and maintaining the reflux ratio for enrichment of alcoholic liquid to 95% v/v. The distillation process is a conventional continuous one.

The fermented wash is fed continuously at the top of analyzer column and the steam is continuously injected at the bottom of the same column, and hence there will be very good contact between the vapours and liquid at each trays of the analyzer column resulting in the enrichment of alcoholic vapours which are fed to the rectifying column. The Aldehyde column serves to separate aldehydes which are separately stored. The rectifying column consists of 44 Nos. of trays which are responsible to enrich the alcoholic liquid (ethyl alcohol) to 95% V/V by way of reflux and partial condensation from Beer heater and condensers. Exhaust column is meant to exhaust traces of alcohol from the spent lease. Ethyl alcohol of 95% V/V accumulates at the top of the rectifying column which is continuously tapped and passed through cooler, tester and stored.

Ethanol

The Ethanol, being manufactured by the sugar industry in Brazil and other countries has been successfully mixed upto a certain percentage with petrol. This is a relatively new area of business for the sugar industry in India.

We started production of Ethanol-Bio Fuel in March 2003. The Ethanol plant has been commissioned by Messrs. Associated Engineers. Gujarat and the plant has a capacity of producing upto 20,000 LPD. The Ethanol production is based on the Azeotropic Distillers method in which Benzene is used as a entariner. The Ethanol plant is having two columns. One is a dehydration column which is having 48 plates and 1200mm diameter, rectified spirit is main raw material for ethanol . Ethanol of purity 99.6% is tapped from the bottom plates of the same column . The possible losses of Benzene & Rectified Spirit during the distillation column are recovered through the recovery column and are again fed to the dehydration column .

The Ethanol of purity 99.6% thus produced, is stored in to the air tight receivers. We have started issuing of ethanol i.e. Bio Fuel to the Petroleum Companies like IOCL, BPCL etc., for 5% blending with petrol.

Rectified Spirit

Rectified Spirit is produced from cane molasses. The molasses is diluted & fermentation is done by using yeast as a catalyst. After fermentation, the Rectified Spirit is produced by means of fractional distillation in a copper column Finally, the Rectified Spirit is collected & stored in M.S tanks. Rectified Spirit is used in the preparation of Medicines, Syrups and Perfumes.

It is also used for the preparation of extra neutral alcohol, absolute alcohol, ethyl actitate and acetic acid. The Ugar Sugar Works Distillery division is producing Rectified Spirit of ISI grade, first and middle grade alcohol. The licensed capacity of Rectified Spirit is 75,000 Litres per day.

Denatured Spirit

Any spirit i.e Rectified spirit, ethanol, or Middle grade alcohol which is mixed with the prescribed denaturant is called Denatured Spirit.

Sale of the products from Distillery

Rectified Spirit and Extra Neutral Alcohol (ENA) is sold as per requirement of the market and the market fluctuates a lot due to the cyclic nature of the sugar industry. Bulk of the sale is in Karnataka State and the balance in the neighboring states. Ethanol is sold to the oil companies namely Indian Oil Corporation, Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. by participating in the tender process. IML is mainly sold in the state of Karnataka through Karnataka State Beverages Corporation Ltd. (KSBCL), a Corporation of the Govt. of Karnataka. As a policy matter all the liquor is sold in Karnataka has to be sold through the Corporation. This has increased our sales due to improving the process of selling and transparency in transaction. The IML is also sold outside the state but the quantum is quite low due to the export duty on liquor sold outside the state of Karnataka. Hence most of the factories have started bottling units in different states. Accordingly, we have also started bottling in the states of Maharashtra and Kerala.

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Cogeneration: The Company commissioned a 28 MW power Cogeneration Plant in the year 1998 to generate power using bagasse which is a by product of the sugar factory. During 2003-04 with the expansion of the crushing capacity of the sugar mill to 10000 TCD, the capacity of the power plant was also enhanced to 44 MW. The Company also entered into Power Purchase Agreement with the Govt. of Karnataka for supply of excess power to the grid. Until the Electricity Act 2003 came into being the Company was supplying power to the Karnataka Power Transmission Co.Ltd. (KPTCL) as per the Power Purchase Agreement (PPA). However, after the introduction of the Open Access Scheme through the Elecricity Act 2003 the Company entered into an agreement with the Tata Power Trading Co. Ltd. to supply excess power to them. We are presently exporting 25 MW of power to the Tata Power Trading Company Ltd. The steam flow at MCR conditions under different conditions (season, off season) of operation high-pressure steam from the superheater of the boiler enters the HP stage of the steam turbine. One uncontrolled extraction and one controlled extraction will provide process steam requirement. The steam from the first extraction is also used for deaeration & steam at is also used for feed water heating. The remaining steam, after expansion is condensed in a two pass condenser (in two halves) & returned to the boiler.

Bagasse Handling System

Bagasse from the mill house shall be fed to the Bagasse elevators.

Bagasse from the elevator is carried through belt conveyor to the distribution carrier, this shall be transported to feed conveyor through a storage hopper, which in turn, shall feed the other chain slat conveyor to feed the boiler.

In case of shortage of bagasse due to problems in mill, reclaim bagasse shall flow through conveyor to take care of the deficit.

For stacking purpose, bagasse shall be directed towards stacking conveyor for generating bagasse pile by means of traveling wing tripper. This pile may be further compacted by dozers to increase storage capacity.

For reclaiming the stored bagasse from the open yard, Bagasse shall be dozed to any of the reclaim hoppers on ground, which in turn shall be carried by underground off-take conveyor to over ground.

Conveyor shall then transport this reclaimed bagasse to through flap gate to feed the boilers.

Procured bagasse from other sugar factories shall be manually stored in the adjacent bagasse pile area under shed. Reclaiming of this bagasse shall be through the reclaim hoppers & the underground conveyor common to the main bagasse reclaim system.

Carbon Credit We are eligible for Carbon Credit for using biomass as fuel and thus reducing carbon emissions into the atmosphere. Income from trading the carbon credits was Rs. 3509.10 lakhs during 2006-07 and Rs. 3897.50 lakhs during 2005-06. Technology Equipment and Facilities: We continuously endeavour to upgrade the technology and the facilities available as per current industry scenario. Research & Development Work The Company has a reasonably good R & D Wing carrying out research and developmental work for Product improvement, cost reduction, product development, imports substitution etc The Company carries out Research and Development in sugarcane, process modifications in the sugar production, quality liquor and Ethanol production, improvement in Technology, Cogeneration of power and bi-methanation from press mud and zero effluent discharge system.

We are continuing with our efforts to locate more dual – purpose varieties, which could give good cane yields, excellent recoveries and reasonably high fibre content. Co-88025 and Co-94012 (Both are Soma-clones of CoC-671) will replace or supplement CoC-671 (Q63 x Co-775) so as to obtain an average seasonal recovery of 12.50% plus. We are trying to stop the spread of the undesirable variety viz. Co-8011 (Co-740 x Co-6304). We will totally stop receiving Co-7704 (Co-740 x Co-6806) variety during 2007-08 crushing season as it is a good yielder of poor

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quality cane. Co-8011 and Co-7704 will be replaced by Co-86032 (Co-62198 x CoC-671), Co-85019 (Co-7201 x Co-775) and COM-88121 (Co-740 x Co-6806). Co-7508, Co-85019 and Co-89014 show good promise in saline soils. Co-95020 is in the pipeline and the suitable variety for Co-generation plant.

Bio-fertilizers viz. Azotobacter, Acetobacter, Azospirillum, Phosphate Solubilizing Microbial (P.S.B./P.S.M.) inoculants are cost-effective as their application works out to be substantially less expensive vis-à-vis chemical fertilizers and contribute significantly towards enhancing the Productivity of land.

This is the 9th year of conducting Initial Varietal Trials, AVT (Autumn and Spring), MLVT of All India Co-ordinated Research Project (AICRP) to evaluate the performance of Zonal varieties and thus it will give a chance to select suitable varieties. Important trial on “Evolving Multiratooning technology and studies on the Multiratooning Potential of Sugarcane Varieties” is laid under the guidance of Dr. B. Sundara, Principal Scientist, Head, Crop Production, Sugarcane Breeding Institute, Coimbatore. The S.B.I., Coimbatore supplied 5000 clones for screening of White Woolly Sugarcane Aphid. Three most promising Sugarcane White Woolly Aphid resistant clones, viz. SNK44, SNK49 and SNK754 will be multiplied to conduct large scale yield trials across agro-ecologies on Northern Karnataka to know their suitability for commercial cultivation under the guidance of The University of Agricultural Sciences, Dharwad. CoS derivative of 8436 GC (COVC 2003-165) will also be tested for resistant to White Woolly Sugarcane Aphid.

The trials conducted under the guidance of S.B.I., Coimbatore, U.A.S., Dharwad and AICRP on Sugarcane (ICAR, New Delhi) are highly appreciated by the concern authorities. There are 40 odd new sugarcane varieties under trial in our R and D Farm. The U.A.S., Dharwad sanctioned us a project for multiplication of predator, Brown lace wings (Micromus Sp.) in the laboratory to control White Woolly Sugarcane Aphid – WWSA – Ceratovacuna lanigera Zehnt. Short Duration Crops: The work with wheat, soybean and sunflower is reasonably successful as a rotation of crop and useful indications are likely to be obtained this year. Wheat: Our work on wheat is getting along well. Experiments under the guidance of CIMMYT (South America), ICARDA (Middle East), MACS, Pune, U.A.S., Dharwad and ICAR, New Delhi are laid on a big scale and the stand of the crop is excellent. Vinayak (DWR 162) wheat variety identified by our R and D Wing is not only popular in this part of the country but in Indonesia it is also released as Devata. Soyabean: JS-335, PK-1024, PK-1029, DSb-6, MACS-450 and NRC-37 are soybean varieties doing well in our area inspite of incidence of ‘rust’. National Research Centre For Soyabean, Indore sanctioned a second time Rs.40,000/- research grant to us for screening a large number of soyabean varieties against rust and the Company will pursue the effort still further. Sugar Beet: Our R&D trials on sugar beet in Non-saline alkali (Black alkali / Sodic) soils are laid to study sucrose %, tuber yield and impurities such as Potassium, Sodium and amino-nitrogen % in collaboration with Syngenta, KWS (Germany), SES (Belgium), Europe and U.S.A. as supplementary / complimentary / companion crop in sugarcane based industry area. Monogerm seeds viz. Posada (Indus), Dorotea (Cawery), HI0064 (Subhra) LAETITIA, FELICITA, ESPERANZA and CAPITANA genotypes are included in the trials. Jatropha Curcus (Raton Jyot): We have planted large number of seedlings of Jatropha as a rain fed crop in the command area which can be used as a source of bio-diesel and the seedlings are developing satisfactorily. Awards: The Company has over the years won several awards. To highlight a few –

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1) Year 1984-85 National Safety Award for the longest Accident Free Period 2) Year 1984-85 S.V. Parthasarathy Memorial Award for Outstanding Performance from Indian Sugar Technology Association, Chennai 3) Year 1986-87 to 1993-94, 1996-97 S.V. Parthasarathy Memorial Award for Excellence in R&D Work from Indian Sugar Technology Association, Chennai 4) Awards Received for R&D Work Year 1994-95 (a) Deccan Sugar Technologists Association (b) K.S.Kale Memorial Award (c ) Vasant Dada Memorial Prize (d) J.S. Puja Shield e) Year 1995-96 Dr. Haldikar Vigyan Pratishtan Award Regulatory Environment: Sugar Industry is one of the highly regulated industries regulated by several bodies of State and Central Governments at several levels. The Statutory Minimum Price (SMP) of sugarcane is decided by the Central Government on a formula based on factory wise sugar recovery of the previous year. Then the sugar releases are also governed by the Central Govt. and our factory gets a release from the Govt. of India at the beginning of the month and only that quantum of sugar is sold in the open market. Export of sugar is also regulated by the Govt. of India depending on the domestic needs. There is a Wage Board formulated by the Govt. of India to decide upon the wages of sugar factory workers. The State Govt. also has several restrictions on sale and captive consumption of Molasses and Rectified Spirit. The State Govt. also regulates sale and purchase of power through Karnataka Electricity Regulatory Commission (KERC) with regard to export of power generated by Co-generation. Current regulations for the sugar industry Current regulations Impact Cane price determination

Statutory Minimum Price (SMP) by Central Government State Advised Price (SAP) by States SAP being higher than SMP

Sugar mills in states where SAP is applicable stands at a disadvantage as the domestic sugar market is demand supply driven

Command area

No new mill can be set up at a distance of less than 15 km from existing mill

Demand supply imbalance in sugarcane require-ment and sugar capacities can impact sugar mills operations

Monthly release mechanism

Monthly releases given to each mill by the government

Sugar mills impacted in case of over production of sugar on account of piling up of inventory thereby leading to higher carriage cost

Levy quota and levy price

10% of the mills production procured by the government at levy price for distribution through Public Distribution Scheme (PDS)

Sugar mills will necessarily have to sell 10% of sugar production at levy price irrespective of prevailing free market price

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Communication Strategy: The Ugar Sugar Works Ltd. communicates with its shareholders through yearly Balance Sheet and Profit and Loss Account besides any particular circulars of note. The Company also has a website 'www.ugarsugar.com' which is updated on a quarterly basis. Human Resource: The Company has a reasonably good Human Resource Development team led by senior functionaries. The Company has had cordial relations with the workers and problems faced by the workers are discussed, negotiated and resolved. The Company has a very low employee attrition rate. Other Projects under implementation: A. Sugar Manufacturing unit in Jewaragi Taluka, Gulbarga District, Karnataka State Ugar Sugar Works is also implementing another project with 3500 TCD and 15 MW cogeneration unit at Malli village of Jewaragi Taluka, in the Gulbarga District of Karnataka State . The required land admeasuring approx 162000 sq. mtrs has been acquired and various plant and equipment, machinery and cogen plant (including boiler and auxiliaries, steam turbine generator and auxiliaries, electrical evacuation system, water treatment / cooling tower and auxiliaries, fuel and ash handling system, bagasse yards, piping and instrumentation, water storage and distribution system, switchyard, cable trenches and cabling, chimney miscellaneous plant buildings and various offices, etc.) have been installed and the project is expected to start trial runs during the current year I,.e. 2007-08. The trial runs have taken during 2007-08 season. This project site is adjacent to NH – 13 about 0.5 Km on the West side of the High way. The total project cost is estimated at Rs. 120 crore funded by Terms Loans of Rs. 80 crore from Bank of Baroda and Central Bank of India. The remaining amount of Rs. 30 crore has been met by raising Corporate Loan from Axis Bank. The current cost has gone up now to Rs. 140 crore B. Ugar Quality Packaging Private Ltd , MIDC Ratnagiri, Karnataka Ugar Quality Packaging Private Ltd was incorporated on 21 June 2006 and registered as a 100% export oriented unit.. This project has been taken up because of the requirement of specialized packaging requirement for export of Sugar Ships manufactured by Ugar Sugar Works for export to Germany. The project is being implemented in association with Mr. Jitendra Joshi, a packaging expert and who has been operating two packaging units by the name Quality Screen and Quality Service at MIDC, Ratnagiri. Both are sole proprietorships manufacturing specialized packaging material. Mr Joshi is participating in equity to the extent of 40% and will be responsible for running the unit. The project is being implemented at a total cost of Rs. 526 Lakhs the break up of which is as follows: Equity Rs. 80.00 lakhs Preference Rs. 80.00 lakhs Term Loans Rs. 328.00 lakhs Deferred Payment Rs. 36.00 lakhs Equity Participation: Ugar Sugar Works 25% Promoters of Ugar Sugar 25% Employees of Ugar Sugar 10% Mr.Jitendra Joshi, Technocrat 40% The entire preference capital and 25% of equity (Total amount Rs. 100 lakhs) has been contributed by Ugar Sugar Works. Approx 40% of the production will be captively consumed by Ugar Sugar Works and the balance 60% will be sold to other export oriented units.

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Trial production has already been commenced in December 2007 and is expected to commence commercial production by February 2008.

Profitability, Dividend Payments and Future Prospects

We have been consistently a profit making company and have been paying dividends except the last year i.e. 2006-07. The sugar industry in general suffered losses due to unprecedented fall in sugar prices. We are confident that during the current year we will be reporting positive results and with sugar prices improving and the revenues from our new projects flowing in we will again be able to declare dividend from the next financial year onwards. Details of dividend payments during the past five years are provided on page 186 of this document.

Promises vs Performance of earlier issues

Our company came out with a Rights Issue @ one equity share for every four shares held at a price of Rs. 25/- per share including face value of Rs.10 and premium of Rs. 15 per equity share. The issue opened on 24th September 1998 and closed on 24th October 1998 and was fully subscribed. The money was raised for expanding the crushing capacity from 5000 to 7500 Tons per day and commencement of cogeneration of power. The project was successfully implemented utilizing the funds.

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CORPORATE STRUCTURE AND MANGEMENT

Details of Board of Directors: Sr. No.

Name/ Father’s Name/ Designation/ DIN No/ Address/ Qualification

Age Other Directorships

1 Mr. Rajendra V. Shirgaokar. S/o Mr Vinayak Shirgaokar. Chairman & Managing Director, DIN No.: 00542644 Address: Ugarkhurd Talathani, Belagaum 591316 Qualification: B.Sc (Hon) (Chem.Engg London)

73 1. Ugar Consultancy Ltd.** 2. Indian Sugar Exim Corporation Ltd. 3. Shishir Shirgaokar Inv Pvt Ltd 4. Forest Industries (P) Ltd 5. Sitara Tiles Pvt Ltd 6. Suresh Shirgaokar Inv Pvt Ltd 7. S.B. Reshellars Pvt Ltd

2 Mr. Prafulla V. Shirgaokar S/o Mr Vinayak Shirgaokar. Executive Director, DIN No: 00151114 Address: Ugarkhurd Tal-Athani 591316 Qualification:M.Sc

70 1.Ugar Consultancy Ltd.** 2. DM. Shirgaokar Inv Pvt. Ltd 3. Prafulla Shirgaokar Inv Pvt Ltd 4. S.B. Reshellers Pvt. Ltd 5. Shantaram Reshellers Pvt Ltd 6 Prabhakar Shirgaokar Inv P. Ltd 7. Tara Tiles Pvt Ltd 8. Mohan Shirgaokar Inv Pvt Ltd 9. Shantaram Machinary Pvt Ltd 10.Vinayak Shirgaokar Inv Pvt Ltd 11. Ugar Pipe Industries Pvt Ltd 12. Ugar Theaters Pvt Ltd

3 Mr. Shishir.S. Shirgaokar S/o Mr Suresh Shirgaokar. Wholetime Director, DIN No.: 00166189 Address: 12 Kostika House, Pali Rd., Bandra – Mumbai 400050 Qualification:B.Sc

63 1. Ugar Consultancy Ltd.** 2. Kulkarni Power Tools Ltd. 3. Camlin Ltd. 4. Sadashiva Sugars Ltd. 5. SLK Software Services Pvt. Ltd. 6.. Shishir Shirgaokar Inv Pvt Ltd 7. Sangli Fabricators Pvt Ltd 8. Tara Tiles Pvt Ltd 9. Shantaram Machinary Pvt Ltd 10. Indo-Schottle Auto Parts Pvt Ltd 11 Forest Industries (P) Ltd 12. Mohan Shirgaokar Inv Pvt Ltd 13. Prabhakar Shirgaokar Inv P. Ltd 14. Ugar Pipe Industries Pvt Ltd 15. D. M. Shirgaokar Inv Pvt. Ltd

4 Mr. . M. B. Karmarkar S/o Mr Balkrishna Karmarkar. Independent Director, DIN No.: 00151817 Address: Karmarkar Sadan, Khan Bhag, Sangli 416416 Qualification:Bsc. LLB (Spl)

77 NIL

5 Mr. S. N. Inamdar S/o Mr Narhar Inamdar. Independent Director, DIN No.: 00025180 Address: 2-A, Ameya Apartments, Kashinath Dhuru Marg, Dadar, Mumbai - 400 028 Qualification: B.Com LLB (Spl)

63 1. Kirloskar Brothers Ltd. 2. Sudarshan Chemicals Industries Ltd. 3. Kulkarni Power Tools Ltd. 4. Force Motors Ltd. 5. Kirloskar Ferrous Industries Ltd. 6. PIH Finvest Company Ltd. 7. Sakal Papers Ltd. 8. Kirloskar Proprietary Ltd. 9.Finolex Industries Ltd 10.Finolex Infrastructure Ltd.

6 Mr. M. G. Joshi S/o Mr Gopal Joshi. Independent Director,

75 1. Ugar Consultancy Ltd.**

75

DIN No.: 01454125 Address: 3, Vasant Baug, Bibwewadi Pune - 411 037 Qualification: B.Sc ,ANSI, Fellow of Sugar Technologist Association of India

7 Mr. . V. Balsubramanian S/o Mr Venkatachalam. Independent Director, DIN No.: 00026561 Address: 4/1, Hall Road, Richards Town, Bangalore - 560 005 Qualification: Retd. IAS

67 1. International Sericulture Alliance Ltd. 2. Bhagyanagar Solvent Extractions Ltd. 3. Gem Sugar Co. Ltd. 4.Ugar Consultancy Ltd.**

8 Mr. . B. S. Patil S/o Mr Sangangowda Patil Director, DIN No.: 00061959 Address: 149, 10th Main, 5th Cross, Rajmahal Vilas Extension, Bangalore – 560 008 Qualification : Retd. IAS

64 1. M/s. Shetron Ltd. 2. Sadashiva Sugars Ltd. 3. UB (Holdings) Ltd 4. Mangalore Chemicals & Fertilisers Ltd. 5. Suprajit Engg. Ltd. 6. Grover Vineyard Ltd. 7. UB International Trading Ltd. 8. Sanyo BPL Ltd. 9. Scotts Garments Co. Ltd.

9 Mr. B. N. Kalyani S/o Mr Neelkanth Kalyani Independent Director, DIN No.: 00089380 Address: Amit, 221/A, Kalyani Nagar, Yerwada, Pune- 411006 Qualification: M.Tech (MIT, USA).

59 1. Bharat Forge Ltd. 2. Kalyani Steels Ltd. 3. Automotive Axles Ltd. 4. Hikal Ltd. 5. Nandi Infrastructure Corridor Enterprises Ltd. 6. Kalyani Lemmerz Ltd. 7. Kalyani Carpenter Special Steels Ltd. 8. Kalyani Carpenter Metal Centres Ltd. 9. Meritor HVS(India) Ltd. 10. BF Utilities Ltd. 11. Nandi Economic Corridor Ent. Ltd. 12. CDP Bharat Forge Gmbh Germany 13. Bharat Forge America Inc. 14. Bharat Forge Kilsta AB, Sweden 15. Bharat Forge Scottish Stampings Ltd, Scottland. 16. Epicenter Technologies Pvt Ltd 17. UTI Asset Management Company Private Ltd.

10 Mr. D. B. Shah S/o Mr Bhalchandra Shah. Independent Director, DIN No.: 01822411 Address: Ugarbudruk – 591 320, Tal – Athani Dist – Belgaum Qualification :- (Non Degree Holder) Agriculturist

67 NIL

11 Mr. A. B. Kage S/o. Bharamgonda Kage Independent Director, DIN No.: 02237651 Address: P. O. Ugarkhurd Ugarkhurd – 591 316, Tal – Athani Dist – Belgaum Qualification :- (Non Degree Holder) Agriculturist

89 NIL

12 Dr. M. R. Desai S/o. Rachappa Desai Independent Director, DIN No.: 01625500

62 1. Ugar Consultancy Ltd.** 2. Sadashiva Sugars Ltd. 3. Indian Sugar Exim Corporation Ltd.

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Address: P. O. Yadhalli - 587 117, Tal - Bilagi Dist - Bijapur Qualification: MBBS

Note:- **1. The name of the company Ugar Power Generation & Consultancy Services Ltd has been changed to Ugar Consultancy Ltd w.e.f. 31.12.2007. 2. Except Chairman & Managing Director/ Executive Director/Whole-time Director all the Directors are liable to retire by rotation. 3. Except Chairman & Managing Director/ Executive Director/ Wholetime Director and Shri B.S. Patil all other Directors are Independent Directors. BRIEF INFORMATION ABOUT BOARD: 1. R V SHIRGAOKAR - Chairman & Managing Director Shri. Rajendra Vinayak Shirgaokar, aged about 72 years is Bachelor of Science in Chemical Engineering from London University. He is a well known industrialist in sugar industry. He has been serving the organization for the past 41 years. He has been instrumental in developing distillery and IMFL sections in the Company. He is actively involved in setting up new projects and setting up clean development mechanism. He has worked as a President of All India Distillers Association. He is responsible for total administration and production. 2. P V SHIRGAOKAR - Executive Director Shri. Prafulla Vinayak Shirgaokar, aged about 69 years is a Master in Science. He is a well known industrialist in sugar industry and has been serving the organization since past 37 years. He has keen interest in the administration, cane development activities and purchase. He has developed Ugar Niravari scheme which is the largest co-operative irrigation scheme in the country for irrigating the area allotted for cane development by the Company. He has served as President of South Indian Sugar Mills Association. 3. SHISHIR S SHIRGAOKAR - Whole time Director Shri. Shishir Suresh Shirgaokar, aged about 63 years is a Science Graduate from Fergusson College, Pune. He is an eminent industrialist in sugar industry and has been serving the organization since past 37 years. He has primary responsibility of taking care of the financials of the Company and the group. Other areas where he is mainly involved are Banking, New Projects Execution and Inventory Control. 4. A B KAGE Shri. A. B. Kage, aged about 89 years, has joined the Board on 26th March, 1987. He is an agriculturist and a social worker. He has received Vishweshwarayya Award from Government of Karnataka in recognition for his social service to the society. 5. B S PATIL Shri. B. S. Patil (Retd. IAS), aged about 64 years, is on the Board of the Company since 28th March, 2005. He is a retired Chief Secretary, Government of Karnataka. He is a knowledgeable person having vast experience in administration & many other fields. 6. D B SHAH Shri. D. B. Shah, aged about 67 years, has joined the Board on 28th March, 2005. He is an agriculturist and a social worker. 7. S N INAMDAR Shri. S. N. Inamdar, B. Com., LLB. (Spl.), aged 63 years, is on the Board of the Company since 21st March, 1997. He is a leading High Court Advocate and Income Tax Practitioner, having vast experience in his field. 8. V. BALASUBRAMANIAN Shri. V. Balsubramanian, (Retd. IAS), aged 66 years, is on the Board of the Company since 19th September, 1997. He is a retired Principal Secretary, Government of Karnataka. He is a knowledgeable person having vast experience in administration & many other fields.

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9. M G JOSHI Shri. M. G. Joshi, aged 74 years, has joined the Board on 30th December, 1997. Being a Sugar Technologist, he renders technical services to various sugar factories. He retired as Vice President of Walchandnagar Industries Ltd. 10. B N KALYANI Shri. Babasaheb Neelkanth Kalyani, aged 58 years, is on the Board of the Company since 1983. He is an Industrialist, Chairman of the Kalyani Group and Chairman & MD of Bharat Forge Ltd. He is a Mechanical Engineer from BITS, Pilani, Rajasthan & Masters Degree in Engineering from MIT, Boston, USA. He has a vast experience in working of all types of industries. Certainly we can say that he is a versatile personality.

11. M B KARMARKAR Shri. Madhusudan Balkrishna Karmarkar, B.Sc., L.L.B., Advocate, aged 76, is on the Board of the Company since 1st November, 1992. He is associated with various social and educational organizations in Sangli. He has vast

experience in legal matters. 12. Dr. M R DESAI Dr. Mallappa Rachappa Desai, aged 62 is a qualified Doctor, is on the Board of the Company since 16th June 2000.

He is the Chairman of National Co-operative Sugar Federation and also Chairman of Nandi Sugar Factory. He has a rich experience in the working of sugar industry.

COMPENSATION OF MANAGING/EXECUTIVE/WHOLE-TIME DIRECTORS In terms of the approval of the shareholders an Agreemnts Executed with Chairman & Managing Director, Executive Director & Whole-time Director, the managerial remuneration comprising of salaries requisite allowances and commission (within the limits prescribed under the Companies Act, 1956) are paid to them. Incase of inadequacy of profits in any financial year, the company shall pay to Chairman & Managing Director, Executive Director & Whole-time Director minimum remuneration Rs. 2,00,000 per month and perquisites (but excluding commission) is payble to them . In terms of the supplementary agreement dated 24th March, 2007 entered into by company with Mr. R.V. Shirgaokar, Chairman & Managing Director is entitled to a Salary of Rs. 2.15 lacs per month w.e.f 1st April, 2007 in addition to the perquisites and allowances and commissions. In terms of the supplementary agreement dated 24th March, 2007 entered into by company with Mr. P.V. Shirgaokar, Executive Director is entitled to a Salary of Rs. 2.00 lacs per month w.e.f 1st April, 2007 in addition to the perquisites and allowances and commissions. In terms of the supplementary agreement dated 24th March, 2007 entered into by company with Mr. S.S. Shirgaokar, Whole-time Director is entitled to a Salary of Rs. 2.00 lacs per month w.e.f 1st April, 2007 in addition to the perquisites and allowances and commissions. There is no interest of promoters/directors/key managerial personnel other than reimbursement of expenses incurred or normal remuneration or benefits paid to them. None of the directors, associate bodies corporates i.e. group companies, natural persons and companies with which the directors of the issuer associated as directors or promoters, has not been prohibited/restrained from accessing the capital markets for any reason by SEBI or any authority.

CORPORATE GOVERNANCE

The Company has complied with SEBI Guidelines in respect of Corporate Governance specially with respect to broad basing of Board, Constituting the Committees such as shareholding/ investors Grievance Committee etc. and all manadatory requirements of Corporate Governance norms as enumerated in clause 49 of the Listing Agreement with Stock Exchange. The Board has constituted an Audit Committee, Remuneration Committee, Shareholders’ / Investors’ Grievance Committee in accordance with the Listing Agreement Audit Committee: The Audit Committee comprises of five Independent Directors under the Chairmanship of Shri. S. N. Inamdar. All the members of the Audit Committee possess financial management expertise and knowledge. During the period 1st October, 2006 to 31st March, 2008 audit committee meetings were conducted on following dates:.

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1. November 23, 2006, 2. December 23, 2006, 3. January 23, 2007, 4. May 25, 2007 , 5. July 28, 2007, 6. September 28, 2007, 7. October 31, 2007, 8. December 1, 2007, 9. December 29, 2007 and 10. January 31, 2008

The names of the Committee members are as below

Name of the Directors

Status

1. Shri. S. N. Inamdar Chairman 2. Shri. V. Balsubramanian Member 3. Shri. M.G. Joshi Member 4. Shri. M.B. Karmarkar Member 5. Dr. M. R. Desai Member

The Audit Committee is responsible for: 1. Overseeing of the company’s financial reporting process and the disclosure of its financial information to

ensure that the financial statement is correct, sufficient and credible. 2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the

statutory auditor and the fixation of audit fees. 3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. 4. Reviewing, with the management, the annual financial statements before submission to the board for approval,

with particular reference to: a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956 b. Changes, if any, in accounting policies and practices and reasons for the same c. Major accounting entries involving estimates based on the exercise of judgment by management d. Significant adjustments made in the financial statements arising out of audit findings e. Compliance with listing and other legal requirements relating to financial statements f. Disclosure of any related party transactions g. Qualifications in the draft audit report.

5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval 5A. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public

issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer Page 40 of 51 document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

6. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.

7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

8. Discussion with internal auditors any significant findings and follow up there on. 9. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected

fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.

10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

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12. To review the functioning of the Whistle Blower mechanism, in case the same is existing. 13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. Remuneration Committee:

The Remuneration Committee comprises of five Independent Directors under the Chairmanship of Shri. S. N. Inamdar. During the period 1st October, 2006 to 31st March, 2008 remuneration committee meetings were conducted on following dates:

1. December 23, 2006.

Since there were no issues regarding remuneration changes, no meeting of Remuneration Committee was held after 23rd December, 2006 meeting..

The names of the Committee members are as below


Status

1. Shri. S.N. Inamdar Chairman 2. Shri. V. Balsubramanian Member 3. Shri. M.G. Joshi Member 4. Shri. M.B. Karmarkar Member 5. Dr. M.R.Desai Member

Terms of Reference:

The Remuneration Committee is empowered to determine the Company’s policy on specific remuneration packages for Executive Directors including pension and any other compensation related matters and issues within the framework of Company and on certain performance parameters. Remuneration Policy: A meeting of the Remuneration Committee was held on December 23rd, 2006 to consider revision in the remuneration of Executive Directors. The revision in remuneration of Chairman & Managing Director, Executive Director and Whole time Director, as suggested by Remuneration Committee was approved by the shareholders at the 66th Annual General Meeting held on March 24th, 2007. The remuneration of Chairman & Managing Director was increased to Rs. 2,15,000 p.m. and remuneration of Executive Director and Whole time Director was increased to Rs. 2,00,000 p.m. each w.e.f. April 1st ,2007. The Remuneration Committee also revised the salary and designation of Mr. Niraj S. Shirgaokar a relative of Mr. Shishir S. Shirgaokar. Shareholders’ / Investors’ Grievance Committee:

The Shareholders’ / Investors’ Grievance Committee comprises of Three Independent Directors under the Chairmanship of Shri. M.B. Karmarkar During the period 1st October, 2006 to 31st March, 2008 meetings were conducted on following dates:.

Date of meeting:

1. March 24, 2007 and 2. October 31, 2007.

. The names of the Committee members are as below


Status

1. Shri. M. B. Karmarkar Chairman 2. Shri. A. B. Kage Member 3. Shri. M. G. Joshi Member

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Terms of Reference:

To look into all the complaints received from the shareholders regarding transfer and transmission of shares,

To look into all the complaints received from the shareholders regarding non- receipt of Balance Sheet, dividend/ interest/ payments on redemption of preference shares, debentures, bonds or such other instruments which are redeemable.

The Company Secretary has been designated as a Compliance Officer.

During the FY ending 2006-07 and period ended up-to September 30, 2008, fourteen complaints were received from investors which were replied/ resolved to the satisfaction of the investors.

Up-to September 30, 2008 there were no complaints / queries and pending replies. There are no share transfers pending for registration for more than 30 days as on the said date.

DIRECTORS’ SHAREHOLDING: Details of Directors shareholding as on 30th June, 2008:


Number of

shares


number of shares

1 Rajendra V. Shirgaokar 432680 0.48 2 Prafulla V Shirgaokar 376096 0.42 3 Shishir S Shirgaokar 843756 0.94 4 A B Kage 107440 0.12 5 Deepchand B Shah 29840 0.03 6 Mallapa R Desai 26400 0.03 7 B S Patil 5000 0.01 8 S N Inamdar 15000 0.02 9 M G Joshi 16000 0.02

10 V Balsubramanian 11200 0.01 11 B N Kalyani 1267104 1.41 12 M B Karmarkar 15800 0.02

INTEREST OF DIRECTORS/ PROMOTERS All the Directors/ Promoters may be deemed to be interested to the extent of reimbursement of expenses, if any, payable to them under the articles. The Directors/ Promoters may also be deemed to be interested to the extent of the shares, if any, held by them or by the relatives or by firms or companies of which any of them is a partner and a Director/ Member respectively and the shares if any, out of the present Offer that may be subscribed for and allotted to them or their relatives or any Company in which they are Directors / members of firms in which they are partners.

Changes in the Directors in the last three years:

Sr. No Name Appointment/ Secession

Date Appointed as

1 Shri. D. B. Shah Appointment 28/03/2005 Appointed as Additional Director 2 Shri. B. S. Patil Appointment 28/03/2005 Appointed to fill casual vacancy

caused by death of S. S. Shirgaokar Changes in the Auditors in the last three years: There is no change in Auditors in last three years.

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Borrowing Powers The Board of Directors of the Company has complied with the provisions of Section 293(1)(a) &(d) in respect of borrowing powers.The company authorizes the Board Of Directors to borrow money from time to time upto a limit not exceeding Rupees 300 crores in the aggregate, notwithstanding that the money to be borrowed, together with the monies already borrowed (apart from the temporary loans obtained from the Company’s Bankers in the ordinary course of busines) is in excess of the aggregate paid up capital and free reserves of the Company. Key Managerial Personnel: All the persons mentioned under Key Managerial Personnel are in permanent employment of the Company and are on Company roll. There is no any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any person referred to in this head, was selected as a director or member of senior management. Details of Key Managerial Personnel including shareholding are as follows:

S No.

Name Age Dt.of Joining

Designation Qualification Remuneration paid up to 31.03.2008

(Rs.)

Exp in yrs.

No. of Shares Held

1 Mr.Niraj S.Shirgaokar

35 01.08.2005 Vice President B.E.(CS) 13,11,110 16 71496

2 Mr.Chandan S Shirgaokar

30 18.10.2004 Vice President B.Sc,MCM 11,00,023 08 96248

3 Mr.B.G.Kulkarni 52 01.09.1993 Company Secretary

B.A.LLB,FCS 8,88,874 24 Nil

4 Mr.R.V.Desurkar 54 02.01.1984 Finance Manager

B.Com,ACA 10,21,755 32 1600

5 Mr. R.P. Tagare 63 16.01.1969 Manager A& P B.Com,LLB 8,72,240 39 Nil 6 Mr M.R. Naik 50 01.04.1979 Works Manager D.E.C 9,02,940 30 960 7 Mr. P.D. Divekar 54 01.07.1977 Chief Engg. B.E.Mech 7,57,201 31 1024 8 Mr S.V. Kulkarni 60 01.06.1993 Project Manager B.Sc ANSI 4,89,878 36 Nil 9 Mr. C.G.

Pimpalkar 52 09.11.1982 Chief Chemist-

Sugar B.Sc ANSI 5,24,531 31 2768

10 Mr. K. Ravishankar

52 10.09.1979 Cane Manager B. Sc. Botony 3,81,243 31 Nil

11 Mr. J.H. Kulkarni 55 01.11.1982 Manager R&D B.Sc Agri 4,85,696 36 Nil 12 Mr. O. B.

Sirdeshpande 45 20.07.1995 Manager-

Distillery & IMFL

B.Sc. Alcohol Tech.

4,440,508 26 Nil

13 Dr. S. M. Pattanshetti

41 11.09.1997 Manager-Environment

M.Sc Ph.D 3,80,828 19 1000

14 Mr. N. C. Maiti 45 01.02.1997 Manager-Internal Audit

M.Com, LLB, ICWA

5,32,677 21 Nil

Mr. Niraj S. Shirgaokar, Vice President, has a Bachelors Degree in Computer Engineering from the Bombay University. He has worked for Siemens Information Systems, Bombay in the sales function, selling SAP & mySAP.com to customers in India. After Siemens, he was associated with Patni Computer Systems Limited. He worked as a member of the sales team of their San Francisco, California office, selling outsourcing jobs to customers in United States. Mr. Niraj S. Shirgaokar joined The Ugar Sugar Works Limited in 2005. He is currently responsible for the German Collaboration Project- Fragies Sugar Ships (100% EOU). Additionally, he looks after the Information Technology & ISO functions of the organization. He is also spearheading the organizations market facing initiatives. Mr. Chandan S. Shirgaokar, Vice President, his academic qualifications include a Bachelor’s Degree in Science as well as a Master’s Degree in Computer Management. He has seven years of experience in the field of Management. He has worked with the group company of The Ugar Sugar Works Limited- S.B. Reshellers, Kolhapur for three years. He has been working with The Ugar Sugar Works since 2005. His current responsibilities include overall management of the distillery production and sales of IML products.

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Mr. B.G. Kulkarni, Company Secretary, his qualifications include a Bachelor’s Degree in Arts and a Bachelor’s Degree in Law. He is a Fellow Member of The Institute of Company Secretaries of India. He has 23 years of experience and has been working with the Company for the last 14 years. Prior to joining USW Mr. Kulkarni was working with VXL Instruments Ltd, Bangalore. Mr. R.V. Desurkar, Manager Finance, has completed his Bachelor’s Degree in Commerce. He is a Chartered Accountant and is also a Fellow Member of the Institute Of Chartered Accountants Of India. He has a total of 31 years of experience in the field of finance. He has been working with the company for more than 23 years. Prior to working with The Ugar Sugar Works Limited, Mr. Desurkar was working with Miraj Glass Works for a period of three years. Mr. Desurkar is currently handling the financial matters of the organization, which includes all the Greenfield projects also.

Mr. R.P Tagare, Manager- Administration & Personnel, has Bachelor’s Degrees in Arts and in Law. He has been working with the company for the past 38 years looking after Labour Law and Administration. Mr. Tagare is spearheading the Human Resources initiatives of the company.

Mr. M.R. Naik, Works Manager, is a Diploma holder in Industrial Electronics & Engineering. Mr. Naik started his career with The Ugar Sugar Works Limited as a supervisor and was promoted as Works Manager. He is in-charge of the sugar & co-generation sections of the company. Mr. Naik has been working for the company for the past 29 years. He is also serving as a senior consultant for the The Ugar Power Generation & Consultancy Services Pvt. Limited (Now Ugar Consultancy Ltd). Mr. P.D. Divekar, Chief Engineer, B. E. Mechanical with Boiler proficiency. He started his career with and has been working with The Ugar Sugar Works Ltd (USW) for about 30 years. Mr. S.V. Kulkarni, Project manager, is a science graduate having completed B. Sc and Associate of National Sugar Institute (ANSI). Presently he is working as Project Manager FSS in USW. He is working with USW for more than 15 years and earlier to the current assignment, was working as Chief Chemist. Prior to joining Ugar Sugar, he was working with Madhukar Sahkari Sakhar Karkhana, Jalgaon Distt. As Chief Chemist Mr.C.G. Pimpalkar, Chief Chemist Sugar, is a science graduate having completed B. Sc and ANSI. He started his career with Ugar Sugar and presently is working as Chief Chemist in USW. He has been working with USW for more than 30 years. Mr. K. Raviskankar, Cane Manager, He is a science graduate having completed B. Sc in Botony. Presently he is working as Cane Manager in USW. He is working with USW for more than 31 years. He was with Kothari Sugars for 1 year. Mr. J.H. Kulkarni, Manager R& D, He is a science graduate having completed B. Sc in Agriculture. Presently he is working as Manager R & D in USW. He is working with USW for more than 35 years. He was with M/s Chaphalkar Trust before joining USW. Mr. O.B. Sirdeshpande, Manager Distillery and IMFL, He is a science graduate having specialization in B. Sc Alcohol Technology. Presently he is working as Manager Distillery & IMF in USW. He is working with USW for more than 25 years. He was with M/s. Birla Technical Services Ltd., before joining USW. Dr. S.M. Pattanshetti, Manager Environmental , His qualification is M. Sc., Ph. D. Presently he is working as Manager Environment in USW. He is working with USW for more than 18 years. He was with M/s Western Pacques Ltd, Pune before joining USW. Mr. N.C. Maiti, Manager Internal Audit, He possesses various qualifications in different fields. He is Master in Commerce, Graduate in Law and Member of Institute of Cost & Works Accounts. He is with USW since last 10 years He was with M/s. Birla Technical Services Ltd., before joining USW. Changes in the Key Managerial Personnel in the last three years:

Sr.No Name Designation Date Reason 1 G. P. Thorushe Chief Chem. Co-gen 31.05.2007 Retired 2 R. V. Chougule Cane Manager 28.04.2008 Retired

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PROMOTERS Shri. Rajendra Vinayak Shirgaokar, aged about 72 years is Bachelor of Science in Chemical Engineering from London University. He is a well known industrialist in sugar industry. He has been serving the organization since past 41 years. He has developed distillery and IMFL sections in the Company. He is actively involved in setting up new projects and setting up clean development mechanism. He has worked as a President of All India Distilliers Association. He is responsible for total administration and production. Permanent Account Number, Passport Number and Bank Account Number with Bank name of Shri. Rajendra Vinayak Shirgaokar are as under:

Executive Director Shri. Prafulla Vinayak Shirgaokar, aged about 69 years is a Master in Science. He is a well known industrialist in sugar industry and has been serving the organization since past 37 years. He has keen interest in the administration, cane development activities and purchase. He has developed Ugar Niravari scheme which is the largest co-operative irrigation scheme in the country for irrigating the area allotted for cane development by the Company. He has served as President of South Indian Sugar Mills Asscociation. Permanent Account Number, Passport Number and Bank Account Number with Bank name of Shri. Prafulla Vinayak Shirgaokar are as under:

Wholetime Director Shri. Shishir Suresh Shirgaokar, aged about 63 years is a Science Graduate from Fergusson College, Pune. He is an eminent industrialist in sugar industry and has been serving the organization since past 37 years. He has primary responsibility of taking care of the financials of the Company and the group. Other areas where he is mainly involved are Banking, New Projects Execution and Inventory Control. Permanent Account Number, Passport Number and Bank Account Number with Bank name of

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Shri. Shishir Suresh Shirgaokar are as under:

Immediate Relatives of Promoters

Name of Promoter Relation Shareholding (30.06.2008)

%age

Mr. R. V. Shirgaokar 432,680 0.48 (A) Mr. P. V. Shirgaokar * Brother (B) Mrs. S. V. Dalvi* Sister 80,000 0.09 (C ) Mrs. M. R. Dalvi Daughter 224,800 0.25 (D) Mr. S. R. Shirgaokar Son 1,033,440 1.15

Mr. P. V. Shirgaokar 376,096 0.42

(A) Mr. R. V. Shirgaokar* Brother (B) Mrs. S. V. Dalvi* Sister (C) Mrs. S.N. Kumar Daughter 98,080 0.11 (D) Mrs. V. M. Samant ------“------ 44,080 0.05 (E) Mrs. S. P. Shirgaokar Spouse 212,400 0.24

Mr. Shishir S. Shirgaokar 843,756 0.94

(A) Mrs. S. S. Shirgaokar Spouse 86,656 0.10 (B) Mr. N. S. Shirgaokar Son 71,496 0.08 (C) Smt . Puja H. Pusalkar Daughter 12,000 0.01 (D) Mrs. R. R. Khedekar Sister 17,264 0.02 (E) Mrs. C. A. Dalvi Sister 140,448 0.16

* The shareholding of R. V. Shirgaokar, P. V. Shirgaokar & S. V. Dalvi is given in their respective columns

Companies with which Promoters have disassociated in the last three years: The Promoters have not disassociated with any group companies in past three years. Common Pursuits: The Promoters/ Promoter Group Companies have no common pursuits with our company. Declaration: The Promoters, their relatives (as per Companies Act, 1956), issuer, group companies, associate companies are not detained as wilfull defaulters by RBI/ Government Authorities and there are no violations of securities laws committed by them in the past or pending against them except those mentioned under Outstanding Litigations against Promoters.

86

FINANCIAL INFORMATION

Auditors’ Report The Board of Directors, The Ugar Sugar Works Limited, Mahaveernagar, Sangli-416416

Sir,

1. We have examined and found correct the annexed financial information of The Ugar Sugar Works Limited for the financial years ended 30th September, 2004, 30th September, 2005, 30th September, 2006,31st March, 2007 (6 months) and 31st March, 2008, and the six months period ended 30th September, 2008, being the last date to which the accounts of the Company have been made up and audited by us.

2. The said financial information has been drawn up by the Company in accordance with the requirements of paragraph B(1) of Part II of Schedule II to the Companies Act, 1956 and the Securities and Exchange Board of India (Disclosure and Investor Protections) Guidelines, 2000, as amended from time to time and in accordance with the instructions dated 20-11-2007, received from the Company requesting us to carry out work for the purpose of disclosure in the offer document being issued by the Company in connection with its Rights Issue of Equity Shares.

3. We report that:

I. The restated profits of the Company for the financial years ended 30th September, 2004, 2005, 2006, 31st March, 2007 (6 months) and 31st March, 2008, and six months ended 30th September, 2008 are as set out in Annexure I to this report. These profits have been arrived at after charging all expenses including depreciation and after making such adjustments and regroupings, which in our opinion are appropriate and more fully described in the Significant Accounting Policies and Notes on Accounts appearing in Annexure III to this report.

II. The restated assets and liabilities of the Company as at 30th September, 2004, 2005, 2006, 31st March, 2007, 31st March, 2008 and 30th September, 2008, are as set out in Annexure II to this report after making such adjustments and regroupings as in our opinion are appropriate and more fully described in the Significant Accounting Policies and Notes on Accounts appearing in Annexure III to this report.

III. We have also examined the restated cash flow statement relating to the Company for the years ended 30th September, 2004, 2005, 2006, six months ending 31st March, 2007, year ending 31st March, 2008 and six months ended 30th September, 2008, as appearing in Annexure IV to this report.

IV. The rates of dividends paid by the Company in respect of the financial years ended 30th September, 2004, 2005, 2006, 31st March,2007 and 31st March, 2008, are as shown in Annexure V to this report. The Company has not declared any interim dividend for the six months ended 30th September, 2008.

4. We have also examined the following financial information relating to the Company prepared by the Management for the purpose of inclusion in the offer document:

i) Capitalization Statement as at 30th September, 2008 as appearing in Annexure VI to this report.

ii) Statement of Accounting Ratios as appearing in Annexure VII to this report.

iii) Statement of Other Income as appearing in Annexure VIII to this report.

iv) Statement of Investments as appearing in Annexure IX to this report.

v) Statement of Sundry Debtors as appearing in Annexure X to this report.

vi) Statement of Loans and Advances as appearing in Annexure XI to this report.

vii) Statement of Unsecured Loans as appearing in Annexure XII to this report.

viii) Statement of Secured Loans as appearing in Annexure XIII to this report.

ix) Statement of Tax Shelters as appearing in Annexure XIV to this report.

x) Statement of Related Party disclosures as appearing in Annexure XV to this report.

87

xi) Statement of Qualifications appearing in the Auditors’ Reports as given in Annexure XVI to this report.

xii) Changes in Significant Accounting Policies as appearing in Annexure XVII to this report.

This Report is intended solely for your information and for inclusion in the offer document in connection with Rights Issue of the Company and is not to be used, referred to or distributed for any other purpose without our written consent.

Place: Pune

Date 24th October, 2008

For M/s P.G.Bhagwat Chartered Accountants

M.K.Shevade Partner

Membership No. 18651

88

Statement of Profits and Losses, as restated ANNEXURE - I (Rs. in Lakh)



Total 8,860.00 39,460.62 31,194.70 47,713.34 29,822.75 20,133.12 Expenditure: Raw Materials Consumed & Purchase of Trading Goods 2,893.78 24,053.06 23,061.32 35,241.05 19,768.33 11,436.25 Manufacturing, Selling & Administrative Expenses 4,540.44 10,263.10 5,628.64 9,577.55 6,415.24 4,313.57 Interest and Finance Charges 728.35 2,310.44 897.36 1,450.41 1,258.96 1,710.00 Depreciation 625.06 1,398.42 654.40 1,066.90 1,122.64 1,310.41 Amortisation 0.70 2.96 1.49 2.56 0.73 0.37 Total 8,788.33 38,027.98 30,243.21 47,338.47 28,565.90 18,770.60 Net Profit Before Tax and exceptional items

71.67 1,432.64 951.49 374.87 1,256.85 1,362.52



(38.55) 1,472.67 767.22 285.04 1,366.44 975.39

Note: The financial year ended on 31-03-2007 was for a period of six months.

89

Statement of Assets and Liabilities, as restated ANNEXURE - II (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 A. Fixed Assets: a) Gross Block 22,855.51 22,291.99 22,381.78 18,711.66 17,967.52 18,077.85 Less: Depreciation 14,546.65 13,932.84 12,727.72 12,154.26 11,091.43 10,225.84 Net Block 8,308.86 8,359.15 9,654.06 6,557.40 6,876.09 7,852.01 b) Capital Work in Progress 14,585.95 12,882.60 7,108.07 4,167.06 525.11 136.41 Total 22,894.81 21,241.75 16,762.13 10,724.46 7,401.20 7,988.42 B. Intangible Assets 1.02 0.76 3.72 5.13 1.10 0.73 C. Investments (net) 1,837.07 1,859.32 29.13 28.86 28.86 26.61

D. Current Assets, Loans & Advances:

a) Inventories 6,355.88 20,233.66 24,620.54 12,215.40 5,089.53 9,072.92 b) Sundry Debtors 2,808.82 3,592.66 2,067.74 3,947.27 2,368.70 2,600.17 c) Cash & Bank Balances 1,094.78 2,826.38 14,729.19 7,932.49 5,563.96 4,930.55 d) Other Current Assets 3,571.17 2,790.39 1,633.12 1,059.98 1,180.16 1,239.92 e) Loans & Advances 2,115.50 1,204.31 3,734.69 4,315.37 1,806.53 679.79

Total 15,946.15 30,647.40 46,785.28 29,470.51 16,008.88 18,523.35 E. Total Assets (A+B+C+D) 40,679.05 53,749.23 63,580.26 40,228.96 23,440.04 26,539.11 F. Less: Liabilities and Provisions: a) Secured Loans 19,918.67 28,279.11 25,815.10 16,599.22 10,645.05 13,437.87 b) Unsecured Loans 3,425.84 2,937.94 1,533.65 3,574.79 1,339.32 1,941.02


Current Liabilities 7,917.00 14,554.92 28,548.96 12,461.91 3,847.49 4,542.25 Provisions 853.21 1,073.21 391.79 515.28 583.90 547.31

8,770.21 15,628.13 28,940.75 12,977.19 4,431.39 5,089.56

Total Liabilities 32,114.72 46,845.18 56,289.50 33,151.20 16,415.76 20,468.45

G. Net worth before deferred tax liability(E-F)

8,564.33 6,904.05 7,290.76 7,077.76 7,024.28 6,070.66

H. Deferred Tax Liability 476.92 464.74 780.07 676.32 713.91 921.49 I. Adjusted Net worth (G-H) 8,087.41 6,439.31 6,510.69 6,401.44 6,310.37 5,149.17 J. Net Worth Represented by 1. Share Capital 900.00 900.00 900.00 900.00 900.00 562.50 2. Reserves & surplus 7,187.41 5,539.31 5,610.69 5,490.17 5,410.37 4,586.67 K. Misc. Expenditure (to the extent not written off) - - - - - - L. Adjusted Net Worth 8,087.41 6,439.31 6,510.69 6,390.17 6,310.37 5,149.17

90

Significant Accounting Policies Annexure III A. Fixed Assets and Intangible Assets

1.

Fixed Assets are carried at cost of acquisition or construction (inclusive of freight, duties, taxes and expenses related to acquisition and installation and commissioning) less accumulated depreciation.

2. Intangible Assets are recorded at the consideration paid for acquisition.

B. Depreciation and Amortisation.

1.

Depreciation on Fixed Assets is provided on "Written Down Value" Method, as per the provisions of Schedule XIV to the Companies Act, 1956.

2. Computer Software (Intangible Asset) is amortised over a period of three years.

C. Investments

Investments are carried at cost of acquisition. A provision for diminution is made to recognise decline other than temporary, in the value of investments.

D. Valuation of Inventories Category of Inventory Basis of valuation 1.

….. ….. …..

At cost or net realisable value, whichever is less. Cost is generally arrived at on Weighted Average Method.

Stores and Spares, Raw Material (other thanMolasses), Purchased Bagasse, Molasses inprocess, Sugar in Process, Crops in progress,Petroleum Products and Finished Goods

2 Molasses, Own Bagasse and Scrap ….. At net realisable value. E. Research and Development

Revenue Expenditure on Research and Development is charged off as an expense in the year in which incurred and the Capital Expenditure is grouped with fixed assets under appropriate heads and depreciation is provided at the applicable rates.

F. Retirement Benefits

Retirement benefits have been recognized in accordance with AS-15 (revised 2005) and accordingly, a. liability for balance of leave as on the last of the year is fully provided on actuarial basis; b.

liability on account of retirement benefits such as provident fund and superannuation fund are administered through separate funds. Contributions to provident fund and superannuation fund are accounted for at respective specified rates.

c.

gratuity is accounted on the basis of actuarial valuation and funded through a trust, which has taken out a policy with Life Insurance Corporation of India.

G. Revenue Recognition

91

a.

Revenue in respect of insurance / other claims, interest, subsidy, Carbon Emission Reduction Units, etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

b. Sales Value is inclusive of Excise Duty and net of sales tax, where applicable.

H. Foreign Currency Transactions

All foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. The exchange differences on settlement / conversion are adjusted:

1) to cost of fixed assets, till the date such assets are put to use, if foreign currency liability relates to fixed assets, and

2) to Profit and Loss Account, in other cases.

In respect of amount payable in foreign currency covered by forward contracts, the premium is recognised over the period of contract.

I. Subsidies Received

1. Subsidies received towards fixed assets are reduced from gross book value of the concerned fixed assets.

2. Subsidies received relating to revenue expenditure are deducted from related expense.

J. Borrowing Costs

1.

Borrowing costs that are attributable to acquisition, construction or erection of qualifying assets incurred during the period of acquisition or construction, are capitalised as part of the cost of the asset.

2. Other borrowing costs are recognised as expenditure in the period in which they are incurred. K. Taxation

Tax on income for the current period is made in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences between the accounting income and the taxable income for the period. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the prevailing enacted regulations or those that may be subsequently enacted.

• The Company has complied with AS-23 and a separate certificate issued by the Chartered

Accountant is obtained by the company and the same is included in the material Documents. • Reasons for difference in figure due to Restated Financial Results

Reasons for difference in figure due to Restated Financial Results Sl. Particulars in Brief Dr./ Amount Considered Relates to

No. Cr. Rs. Lakh in Prior to 2003-04 2004-05 2005-06 2006-07 2007-08 Accounting 2003-04 Period Rs. Lakh Rs. Lakh Rs. Lakh Rs. Lakh Rs. Lakh Rs. Lakh

1. Short Provision for Taxation

Dr. 120.24 2003-04 120.24 - - - - -

2. Excess Provision for Leave Salary

Cr. 13.08 2003-04 13.08 - - - - -

3. Excess Provision for Cr. 13.85 2003-04 13.85 - - - - -

92

Excise Duty 4. Excess Provision for Cane

Purchase Tax Cr. 50.83 2003-04 50.83 - - - - -

5. Short Provision for Taxation

Dr. 38.55 2004-05 - 38.55 - - - -

6. Shortfall in sale of assets Dr. 54.76 2004-05 54.76 - - - - - 7. Additional Provision for

Cane Price Dr. 292.91 2004-05 292.91 - - - - -

8. Excess Provision for Taxation

Cr. 12.58 2005-06 12.58 - - - - -

9. Excess Provision for CPT Cr. 361.91 2005-06 361.91 - - - - - 10. Excess Provision for

Gratuity Cr. 24.57 2005-06 - - 24.57 - - -

11.

Interest on Excess Realizations on sale of levy sugar

Cr. 12.31 2005-06 12.31 - - - - -

12. Excess Provision for Excise Duty

Cr. 14.54 2005-06 14.54 - - - - -

13. Excess Provision for Cane Price

Cr. 169.95 2005-06 169.95 - - - - -

14.

Reversal of Provision for Transport Subsidy Cr. 99.49 2007-08 - - - 99.49 - -

15. Excess Provision for CPT Cr. 301.49 2007-08 - - - - 301.49 - 16.

Excess Provision for Excise Duty on Stock of Sugar

Cr. 1,005.00 2008-09* - - - - 323.35 681.65

17. Excess Provision for CPT Cr. 145.54 2008-09* - - - - - 145.54 18. Excess Provision for

Gratuity Cr. 52.75 2008-09* - - - - - 52.75

19. Additional Provision for Cane Price

Dr. 1,413.35 2008-09* - - - - - 1,413.35

20.

Effect of increase in cane price on Closing Stock of Sugar (Consequential)

Cr. 922.21 2008-09* - - - - - 922.21

* 2008-09: Comprises of six months (01-04-2008 to 30-09-2008)

Notes forming part of the Accounts: (Rs. in Lakh) As at Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004

1 Contingent Liabilities not provided for:

Claims against the Company not acknowledged as debts

41.00 41.00 41.00 41.00 41.00 38.00

Excise Duty, liability disputed

131.08 132.50 233.99 120.59 - 44.05

Service Tax, liability disputed

30.06 10.21 - - - 0.56

Income Tax, liability disputed

- - - - - 313.99

Duties & Taxes - - 173.06 - - -

2

The Income Tax Assessments of the

93

Company are complete upto the Asst. Year 2006-07. There are no such concessions disallowed by Income Tax Department as on 31.03.2008.

3

Based on available information, presently, there are no amounts payable to parties mentioned in Micro, Small and Medium Enterprises Development Act, 2006.

4

Estimated amount of contracts remaining to be executed on capital account

406.39 314.37 4,620.48 11,086.59 1,871.50 33.69

5

Sundry Debtors in Annexure X include amount due from private limited companies in which directors of the Company are directors/ members

0.51 0.51 0.58 0.13 0.13 0.13

6

Advances to suppliers, etc. in Annexure XI include

(i)

Amount due from private limited companies in which directors of the Company are directors / members.

23.76 17.16 195.43 13.76 16.77 31.02

(ii) Advances on capital account

177.15 491.75 1,336.91 979.63 362.09 13.16

7

Current Liabilities in Annexure II include outstanding dues of Small Scale Industrial Undertakings

NA NA 13.49 24.85 16.03 12.53

8

Amount of borrowing costs capitalised during the period

a. In respect of assets completed

- - 36.26 - - 14.71

b.

In respect of capital work in progress

348.75 651.22 135.10 37.00 - -

9 Fixed Deposits accepted from Directors

13.02 13.57 5.48 - - -

94

10 Remuneration to Directors

Salary 38.10 76.20 12.90 25.80 22.80 13.80 Commission on profit 25.65 51.35 14.76 30.09 42.33 44.90 Retirement benefits 9.97 19.92 1.40 2.81 2.45 3.08 Perquisites 1.48 3.07 2.09 1.78 0.84 1.32 Sitting fee 2.51 6.11 2.52 4.59 3.67 1.86 Total 77.71 156.65 33.67 65.07 72.09 64.96

Notes:

1

As the employee wise break-up of contribution to group gratuity scheme and leave encashment is not ascertainable, the amount related to Chairman & Managing Director, Executive Director & Wholetime Director is not included above.

2 Sitting fee is paid to non executive directors only.

3.

The financial year ended on 31-03-2007 is for a period of six months.

11 Break-up of Deferred Tax

Assets and Liabilities

Deferred Tax Liability Depreciation 862.63 876.92 870.75 744.92 770.94 966.38 Deferred Tax Asset

Provision for Doubtful Debts and Advances

116.94 118.97 90.68 68.60 57.03 44.89

Provisions as per AS - 15 268.77 293.21 - - - -

385.71 412.18 90.68 68.60 57.03 44.89

Net Deferred Tax Liability 476.92 464.74 780.07 676.32 713.91 921.49

Net effect of deferred taxation debited / (credited) to Profit & Loss Account

12.18 (163.68) 103.76 (37.59) (207.59) 240.58

12 Details of Payments to

Auditors

Audit Fees 1.50 3.00 2.87 3.87 2.80 2.50

Tax Audit & other Certifications

0.87 2.50 0.89 1.90 1.42 1.67

Reimbursement of Expenses 0.37 0.43 0.47 0.62 0.74 0.70 Total 2.74 5.93 4.23 6.39 4.96 4.87

13 Earning per Share

Profit attributable to the Equity Shareholders

673.60 1,439.43 176.54 196.82 1,366.44 975.39

Weighted average number 900.00 900.00 900.00 900.00 900.00 56.25

95

of Equity Shares (Lakh Nos.)

1.00 1.00 1.00 1.00 1.00 10.00

Nominal Value of Equity Shares (Rs.)

0.75 1.60 0.20 0.22 1.52 1.08

Basic / Diluted EPS (Rs.) Note:

In 2004-05, the Company split its existing shares of Rs. 10 each into 10 shares of Re.1 each. Further, the Company issued bonus shares in the ratio 3:5. The earning per share for the year ended 30-09-2004 is adjusted for split up of shares and bonus shares.

14 Future Minimum Lease

Rentals in respect of assets (a) Given on operating lease

(i) Receivable within one year 4.28 4.23 4.22 2.11 - -

(ii) Receivable between one year and five years

4.70 6.87 10.39 13.84 - -

(iii) Receivable after five years - - 0.71 1.48 - - (b) Taken on operating lease (i) Payable within one year - - 216.24 202.75 350.00 -

(ii) Payable between one year and

five years - - - 216.24 418.99 - (iii) Payable after five years - - - - - -

15. Subsidies Received a. Subsidies received towards

expenditure, reduced from respective expenditure

(i)

Interest on holding buffer stock of sugar

153.59 450.46 -

- 55.73 247.79

(ii)

State Subsidy for late crushing

- 354.07 - - - -

(iii) Capital Expenditure - - - - - 300.00 b. Subsidies received, credited to

income

(i)

Insurance and storage charges for holding buffer stock of sugar

22.12 68.66 - - 7.66 32.32

(ii)

Transport Subsidy for export sugar

446.11 1,260.36 - - - -

16. Computation of Net Profit as per section 349 read with section 309(5) and 198 of the Companies Act, 1956, for calculation of commission payable to Working

96

Directors: Profit for the year before taxation (as per Audited Accounts) 783.82 1,444.82 326.65 858.66 1,085.61 1,371.93 Add: Provision for doubtful debts - 110.06 131.34 79.50 253.31 59.62 Directors Fees 2.51 6.11 2.52 4.59 3.67 1.86

Remuneration to Working Directors

75.20 150.54 31.15 60.48 68.42 63.10

861.53 1,711.53 491.66 1,003.23 1,411.01 1,496.51

Less: Excess Provision for doubtful debts

and advances 4.25 - - - - -

Capital Gains on sale of fixed assets

2.39 - - - - -

6.64 - - - - - Profit for purposes of Commission 854.89 1,711.53 491.66 1,003.23 1,411.01 1,496.51

Commission @ 1% of Net Profit each, to ---

1. Shri R. V. Shirgaokar 8.55 17.12 4.92 10.03 14.11 14.97 2. Shri P. V. Shirgaokar 8.55 17.12 4.92 10.03 14.11 14.97 3. Shri Shishir S. Shirgaokar 8.55 17.11 4.92 10.03 14.11 14.97

17 Disclosure required as per clause 32 of Listing Agreement

a. Amounts Outstanding at the end of the year / period Ugar Theatres Private Ltd. 7.71 7.71 8.24 8.53 10.92 7.36 Ugar Consultancy Ltd. 1.66 2.51 - 7.07 5.04 5.57 Ugar Quality Packaging Pvt. Ltd. 15.77 18.75 60.00 15.00 - - Sadashiva Sugars Ltd. 537.89 459.96 601.90 225.12 - - b. Maximum Balance outstanding during the year / period Ugar Theatres Private Ltd. 7.71 8.85 8.53 11.01 11.83 7.48 Ugar Consultancy Ltd. 8.66 6.37 9.74 10.22 10.63 5.62 Ugar Quality Packaging Pvt. Ltd. 20.75 105.00 60.00 15.00 - - Sadashiva Sugars Ltd. 537.89 2,208.50 601.90 225.12 - - c. Investments in Equity Shares Ugar Theatres Private Ltd. 2.24 2.24 2.24 Ugar Consultancy Ltd. 2.43 2.43 2.43 Ugar Quality Packaging Pvt. Ltd. 6.25 6.25 - - - - Sadashiva Sugars Ltd. 1,748.54 1,748.54 - - - - d. Investments in Preference Shares Ugar Theatres Private Ltd. - - - - - - Ugar Consultancy Ltd. - - - - - Ugar Quality Packaging Pvt. Ltd. 75.00 75.00 - - - - Sadashiva Sugars Ltd. - - - - - -

18 Segment Reporting

I Primary report under Business Segments

97

Revenue External Sales Sugar 17,389.51 31,026.71 13,778.30 32,415.19 26,291.91 19,313.81 Electricity 1,413.98 5,184.14 2,095.84 2,526.52 1,863.07 1,393.83 Industrial & Potable Alcohol 1,962.48 5,102.75 2,534.30 5,437.13 5,298.53 2,341.73 Total 20,765.97 41,313.60 18,408.44 40,378.84 3,453.51 23,049.37 Inter Segment Sales Sugar 257.02 2,061.53 1,621.92 2,612.41 2,418.15 1,564.86 Electricity 1,022.95 2,875.58 2,146.45 3,542.51 3,123.03 2,525.38 Total 1,279.97 4,937.11 3,768.37 6,154.92 5,541.18 4,090.24 Total Revenue Sugar 17,646.53 33,088.24 15,400.22 35,027.60 28,710.06 20,878.67 Electricity 2,436.93 8,059.72 4,242.29 6,069.03 4,986.10 3,919.21 Industrial & Potable Alcohol 1,962.48 5,102.75 2,534.30 5,437.13 5,298.53 2,341.73 Total 22,045.94 46,250.71 22,176.81 46,533.76 38,994.69 27,139.61 Segment Results (Gross) Sugar (127.84) (2,745.88) (774.19) (208.74) 1,760.01 2,312.39 Electricity 600.99 3,858.19 1,481.70 1,532.24 902.63 525.55 Industrial & Potable Alcohol 182.30 1,609.62 509.35 461.96 162.55 581.62 Total 655.45 2,721.93 1,216.86 1,785.46 2,825.19 3,419.56 Unallocated Corporate Expenses 509.09 807.65 421.57 889.68 696.56 616.42 Operating Profit 146.36 1,914.28 795.29 895.78 2,128.63 2,803.14

18 Segment Reporting Interest and Finance Charges 728.35 2,310.44 897.36 1,450.41 1,258.96 1,710.00 Other Income 653.66 1,828.80 1,053.56 830.01 387.18 269.38 Profit from ordinary activities 71.67 1,432.64 951.49 275.38 1,256.85 1,362.52 Extra-ordinary items - - - - - Profit before tax 71.67 1,432.64 951.49 275.38 1,256.85 1,362.52 Segment Assets Sugar 17,043.30 31,203.46 46,103.83 27,108.59 15,415.50 19,613.49 Electricity 2,472.19 3,097.25 3,528.60 4,381.77 3,232.41 3,706.37 Industrial & Potable Alcohol 2,636.65 2,505.39 2,699.37 2,943.63 2,454.34 1,418.14 Total 22,152.14 36,806.10 52,331.80 34,433.99 21,102.25 24,738.00

Add: Unallocated Corporate Assets

18,526.92 16,943.13 11,107.16 5,696.44 2,337.79 1,855.87

40,679.06 53,749.23 63,438.96 40,130.43 23,440.04 26,593.87

Segment Liabilities Sugar 6,213.34 11,479.88 26,218.91 12,976.37 2,229.86 3,495.08 Electricity 212.62 331.66 207.96 186.24 325.30 197.94

98

Industrial & Potable Alcohol 694.09 678.58 625.24 875.01 909.91 491.51 Total 7,120.05 12,490.12 27,052.11 14,037.62 3,465.07 4,184.53

Add: Unallocated Corporate Liabilities

24,994.66 32,457.82 28,802.93 18,907.29 14,060.51 16,257.95

32,114.71 44,947.94 55,855.04 32,944.91 17,525.58 20,442.48 Capital Expenditure Sugar 233.41 110.51 652.79 2,935.74 413.05 111.34 Electricity 20.68 - 91.04 142.77 56.46 0.26 Industrial & Potable Alcohol 114.71 210.06 354.79 63.83 53.28 18.35 Total 368.80 320.57 1,098.62 3,142.34 522.79 129.95 Depreciation Sugar 383.08 879.93 410.43 447.96 428.85 528.99 Electricity 163.75 386.16 215.95 463.82 537.14 608.33 Industrial & Potable Alcohol 41.20 53.08 28.02 52.84 22.43 23.59 Total 588.03 1,319.17 654.40 964.62 988.42 1,160.91

18 Segment Reporting

Non-cash expenses other than depreciation

Sugar - 17.55 0.07 - - 45.36 Electricity - - - - 54.76 - Industrial & Potable Alcohol - - - - 0.11 0.12 Total - 17.55 0.07 - 54.87 45.48

II The Company does not have any Secondary Business Segments Significant Accounting Policies relating to Segment Reporting a. Business Segments are determined on the basis of the goods manufactured and in accordance with Accounting

Standard 17. b.

Inter-segment transfers are recorded at cost except for own generated Bagasse and Molasses, cost of which is unascertainable and which are recorded at prevalent purchase price.

c. Segment report is prepared in conformity with accounting policies adopted for preparing and presenting financial

statements.

19

There are no amounts outstanding in respect of unpaid dividend/fixed deposits for more than seven years to be transferred to Investor Education and Protection Fund.

20 Figures relating to Profit and Loss Account for the financial year ending 31-03-2007 and period ending 30-09-

2008 are for . six months and for other years they are for twelve

months. 21 We confirm that all notes to accounts, significant accounting policies and auditors qualification have

been incorporated.

99

Notes forming part of the Accounts: 22. Additional Information as required under paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies

Act, 1956. (Rs. in Lakh) As at Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 a Details of each class of goods

manufactured, sold and stocks (as certified by the Management)

i) Licensed Capacities Sugar (TCD) ** ** ** ** 10,000 10,000 Sugar Ships (Qtls/year) 11,250 11,250 11,250 Nil Nil Nil Rectified Spirit (BL/year) *** *** *** *** *** *** Denatured Spirit (BL/year) 9,600,000 9,600,000 2,400,000 2,400,000 7,200,000 7,200,000 Potable Alcohol (BL/year) *** *** *** *** *** *** Arrack (BL/year) *** *** *** *** *** *** Electricity (KW/day) 1,056,000 1,056,000 1,056,000 1,056,000 1,056,000 1,056,000 ** Licence under the Industries (Development & Regulation) Act, 1951 is not required. *** Licence from Licensing Authority, State Excise obtained but quantity to be produced is not restricted. ii) Installed Capacities Sugar (TCD) 10,000 10,000 14,050 14,050 10,000 10,000 Sugar Ships (Qtls/year) 6,000 6,000 6,000 - - - Rectified Spirit (BL/year) 24,369,000 24,369,000 24,369,000 24,369,000 24,369,000 24,369,000 Denatured Spirit (BL/year) 9,600,000 9,600,000 2,400,000 2,400,000 7,200,000 7,200,000 Potable Alcohol (BL/year) 8,100,000 8,100,000 8,100,000 8,100,000 8,100,000 8,100,000 Arrack (BL/year) - - 9,600,000 9,600,000 9,600,000 9,600,000 Electricity (KW/day) 1,056,000 1,056,000 1,056,000 1,056,000 1,056,000 1,056,000 iii) Production (Quantity) Sugar (Lakh Qtls) * 1.76 22.11 19.40 21.88 11.63 8.76 Sugar Ships (Lakh Qtls) - - - - - - Rectified Spirit (Lakh BL) 50.29 139.61 69.86 121.72 93.07 92.68 Denatured Spirit (Lakh BL) 20.52 29.32 4.16 14.17 9.21 27.28 Potable Alcohol (Lakh BL) 24.13 67.64 28.44 53.26 44.79 15.89 Arrack (Lakh BL) - 12.95 9.39 25.57 62.54 5.54 Electricity (Lakh KW) 291.81 1,821.93 862.62 1,342.14 929.15 763.08 * includes production from remelted sugar of earlier seasons as given below: Sugar (Lakh Qtls) 0.07 0.37 0.21 0.44 0.17 0.38 iv) Opening Stock Goods manufactured Sugar Lakh Qtls 13.94 17.36 6.45 2.24 5.63 10.59 Rs. Lakh 16,723.36 22,080.29 10,315.58 3,605.71 8,066.45 11,617.77 Sugar Ships Lakh Qtls - - - - - - Rs Lakh 36.16 1.51 - - - -

100

Rectified Spirit Lakh BL

3.74

13.91

1.86

6.56

4.22

8.52 Rs Lakh 31.09 183.38 40.38 187.76 70.38 149.47 Potable Alcohol Lakh BL 1.33 1.91 1.52 1.33 1.29 1.04 Rs Lakh 19.16 121.14 124.20 60.23 52.29 50.22 Arrack Lakh BL - 0.36 0.81 3.09 4.48 - Rs Lakh - 3.37 8.81 39.57 24.96 - Molasses Lakh MT 0.31 0.39 0.15 0.04 0.03 0.07 Rs Lakh 904.84 594.87 363.36 199.19 39.05 91.10 Goods traded : Potable Alcohol Lakh BL 0.05 0.08 0.14 0.17 0.03 0.05 Rs Lakh 8.02 10.26 20.59 28.36 2.08 6.34 Petroleum Product Rs Lakh 31.54 44.13 37.46 32.11 23.42 18.01 Total Value (Rs. Lakh) 17,754.17 23,038.95 10,910.38 4,152.93 8,278.63 11,932.91 v) Closing Stock Goods manufactured Sugar Lakh Qtls 3.17 13.94 17.36 6.45 2.24 5.63 Rs. Lakh 4,296.86 17,645.57 22,080.29 10,315.58 3,605.71 8,066.45 Sugar Ships Lakh Qtls - - - - - - Rs Lakh 19.59 36.16 1.51 - - - Rectified Spirit Lakh BL 2.75 3.74 13.91 1.86 6.56 4.22 Rs Lakh 58.25 31.09 183.38 40.38 187.76 70.38 Potable Alcohol Lakh BL 3.05 1.33 1.91 1.52 1.33 1.29 Rs Lakh 167.55 19.16 121.14 124.20 60.23 52.29 Arrack Lakh BL - - 0.36 0.81 3.09 4.48 Rs Lakh - - 3.37 8.81 39.57 24.96 Molasses Lakh MT 0.11 0.31 0.39 0.15 0.04 0.03 Rs Lakh 650.28 904.84 594.87 363.36 199.19 39.05 Goods traded : Potable Alcohol Lakh BL - 0.05 0.08 0.14 0.17 0.03 Rs Lakh - 8.02 10.26 20.59 28.36 2.08 Petroleum Product Rs Lakh 36.64 31.54 44.13 37.46 32.11 23.42 Total Value (Rs. Lakh) 5,229.17 18,676.38 23,038.95 10,910.38 4,152.93 8,278.63 vi) Turnover Sugar Lakh Qtls 12.45 25.16 8.29 17.23 14.86 13.34 Rs. Lakh 17,860.84 30,029.79 12,613.23 30,030.20 24,459.46 18,626.80 Sugar Ships Lakh Qtls - - - - - - Rs Lakh 12.99 82.48 24.77 - - - Rectified Spirit Lakh BL 30.71 138.36 53.49 111.94 81.39 69.62 Rs Lakh 652.42 1,718.97 1,389.84 2,942.24 2,404.83 1,505.32 Denatured Spirit Lakh BL 20.52 29.32 4.16 14.16 9.19 27.21 Rs Lakh 448.08 600.53 113.68 366.73 323.94 628.16 Potable Alcohol Lakh BL 22.09 67.60 28.08 53.96 44.95 16.35 Rs Lakh 3,585.89 9,464.16 4,832.49 8,723.39 6,734.60 2,187.95 Arrack Lakh BL - 13.29 9.71 27.45 63.32 1.05 Rs Lakh - 148.72 125.82 417.38 1,058.65 23.84

Electricity Lakh KW

203.50

1,049.76

476.54

716.11

509.35

399.05

101

Rs Lakh 1,413.98 5,184.14 2,095.84 2,526.51 1,863.07 1,393.83 Bye products Rs Lakh 1,036.47 1,131.48 980.42 2,096.27 1,687.88 581.23 Petroleum Product Rs Lakh 560.34 1,809.61 1,165.08 2,297.38 1,681.76 1,444.94 Total Value (Rs. Lakh) 25,571.01 50,169.88 23,341.17 49,400.10 40,214.19 26,392.07 Captive Consumption Rectified Spirit Lakh BL 20.48 11.12 4.17 14.14 9.16 27.25 Electricity Lakh KW 88.31 772.16 386.08 626.03 419.80 364.03 vii) a. Raw Material Consumed Sugar Cane (net) Lakh MT 1.49 19.49 16.68 18.76 10.46 8.37 Rs.Lakh 1,600.07 21,237.00 20,860.63 30,464.94 15,270.29 9,337.34 Molasses Lakh MT 0.20 0.55 0.28 0.49 0.38 0.38 Rs Lakh 518.69 593.09 613.29 1,402.74 1,390.41 437.07 Malt Lakh MT - - - - - - Rs Lakh 4.71 6.95 - 4.49 1.04 0.93 Rectified Spirit Lakh BL 10.94 35.70 16.48 34.05 44.65 9.34 Rs Lakh 206.53 319.11 361.62 869.30 1,274.76 156.91 Others Rs Lakh 9.13 86.48 6.52 7.74 6.76 3.97 2,339.13 22,242.63 21,842.06 32,749.21 17,943.26 9,936.22 b. Purchase of Trading Goods Potable Alcohol Lakh BL - 0.35 0.44 1.55 0.99 0.89 Rs Lakh - 57.66 64.43 226.90 165.49 76.55 Petroleum Product - - Rs Lakh 554.65 1,761.84 1,154.83 2,264.94 1,659.58 1,423.48 Total 2,893.78 24,062.13 23,061.32 35,241.05 19,768.33 11,436.25 viii) Value of Raw Material

Consumed Imported/ Indigenous

Imported Rs Lakh - - 0.02 0.02 0.04 - % age - - Negligible Negligible Negligible - Indigenous Rs Lakh 2,339.13 22,242.63 21,842.04 32,749.19 18,236.13 9,936.22

% age 100% 100% Nearly

100% Nearly

100% Nearly

100% 100%

ix) CIF Value of Imports, Earning

in foreign Exchange FOB value of export and Expenditure in foreign currency:

CIF value of Imports Machinery Spares 3.64 0.74 - - - - Machinery Purchase - - 673.11 1,755.72 - -

102

Earning in foreign Exchange: Sale of CER Units - - 350.91 389.75 - - FOB value of export 12.99 1,477.37 24.77 - - -

Expenditure in foreign currency:

Subscription - 0.06 - 6.82 0.16 0.52 Travelling 2.17 1.98 2.84 3.03 3.37 0.18 Repair Services - - - - - 3.56 Freight Charges - - - - 9.23 Interest on Loan 39.87 80.17 35.25 16.85 - - Supervision Charges - - 0.42 - Repayment of Term Loan 260.48 241.04

23 Discontinued Operations (Disclosure as per Accounting Standard - 24)

The Company has discontinued sugar manufacturing activity at leased units at Tasgaon and Phaltan from the crushing season 2007-08. The decision to discontinue the lease operations was taken on 29-09-2007. Final settlement is in progress. The following statement shows the position of liabilities and assets and of revenue and expenses of continuing and discontinued operations:

Particulars Continuing Operations Discontinued Operations relating to Total Tasgaon Unit Phaltan Unit

2008-09 2007-08 2008-09 2007-08 2008-

09 2007-08 2008-09 2007-08

Rs. Lakh Rs. Lakh Rs.

Lakh Rs. Lakh Rs.

Lakh Rs. Lakh Rs. Lakh Rs. Lakh Liabilities & Assets Fixed Assets 22,770.23 21,112.61 25.95 25.95 99.65 103.95 22,895.83 21,242.51 Investments 1,837.07 1,859.32 - - - - 1,837.07 1,859.32

Current Assets, Loans

and Advances 15,691.61 30,395.28 62.27 60.04 192.27 192.08 15,946.15 30,647.40

Current Liabilities and

Provisions 8,709.88 15,509.26 15.43 76.08 44.90 42.79 8,770.21 15,628.13 Revenue & Expenses Turnover (Net of Excise) 20,761.42 35,410.97 3.64 4,166.20 0.91 2,418.07 20,765.97 41,995.24

Adjustment of Stocks

(12,555.89) 1,854.82 (3.64) (4,147.83) (0.10) (2,060.45) (12,559.63) (4,353.46)

Other Income 642.00 1,645.10 9.93 83.95 1.73 89.79 653.66

1,818.84 Total Revenue 8,847.53 38,910.89 9.93 102.32 2.54 447.41 8,860.00 39,460.62 Operating Expenses 8,055.89 33,853.87 1.38 1,006.79 2.71 856.88 8,059.98 35,717.54 Pre-tax Profits /

103

(Loss)

from Operating Activities

791.64 5,057.02 8.55 (904.47) (0.17) (409.47) 800.02 3,743.08

Interest & Finance Charges

728.19 1,816.32 0.16 315.17 - 178.95 728.35 2,310.44

Profit / (Loss) before tax

63.45 3,240.70 8.39 (1,219.64) (0.17) (588.42) 71.67 1,432.64

Income Tax Expense

110.18 (41.13) 0.03 0.50 0.01 0.60 110.22 (40.03)

Profit / (Loss) after tax

(46.73) 3,281.83 8.36 (1,220.14) (0.18) (589.02) (38.55) 1,472.67

Notes forming part of the Accounts: ANNEXURE - III (Rs. in Lakh) 24 Disclosure with respect to AS-15

The Company has implemented Revised Accounting Standard - 15 on Employee Benefits and made the provisions accordingly. The disclosure as per revised AS-15 are produced below: Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined retirement plan (Gratuity Plan) covering all staff, workers and officers. The Gratuity Plan provides for, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the Company. The Company provides the gratuity benefit through annual contributions to a Gratuity Trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan, the settlement obligation remains with the Gratuity Trust. LIC administers the plan and determines the contribution premium required to be paid by the Trust. The Company has also obtained an independent actuarial valuation of the Trust's Assets and Liabilities, and accordingly, the difference has been provided by the Company. The gratuity liability has been paid by the Company in case of employees, who left during the current period.

2008-09 2007-08 (6 Months) (Rs. Lakh) (Rs. Lakh) Defined Contribution Plan: Contribution to Defined Contribution Plan, recognised and charged off for for the year as under: (Rs. Lakh) Employer's contribution to Provident Fund 46.70 111.53 Employer's contribution to Superannuation Fund 16.89 49.61 Employer's contribution to Pension Scheme 38.24 113.35 Defined Benefit Plan: Gratuity Gratuity (Funded) (Funded)

The Employees' Gratuity Fund Scheme managed by Life Insurance Corporation of India is a defined benefit plan.

I. Assumptions as at:

Mortality LIC (1994-96) Ult.

Interest / Discount Rate 8.50% 8.00% Rate of increase in compensation 6.00% 6.00%

Rate of return (expected) on plan

assets 9.30% 9.25%

104

Expected average remaining service 16.40 15.46 II. Changes in present value of obligations (PVO): PVO at the beginning of the period 1,132.68 1,037.84 Interest Cost 45.09 82.63 Current Service Cost 43.72 58.67 Benefits Paid (10.74) (9.86) Actuarial (gain) / loss on obligation (110.26) (36.60) PVO at the end of the period 1,098.69 1,132.68 III. Change in fair value of plan assets Fair Value of Plan Assets at the beginning of the period 634.58 555.16 Expected Return on Plan Assets 20.26 51.15 Contributions 0.00 37.66 Benefit Paid (10.74) (9.86) Actuarial gain / (loss) on plan assets 0.25 0.47 Fair Value of Plan Assets at the end of the period 653.35 634.58 Defined Benefit Plan (contd): 2008-09 2007-08 (6 Months) (Rs. Lakh) (Rs. Lakh) Gratuity Gratuity (Funded) (Funded) IV. Fair Value of Plan Assets Fair Value of Plan Assets at the beginning of the period 634.58 555.16 Actual Return on Plan Assets 29.51 51.62 Contributions 0.00 37.66 Benefit Paid (10.74) (9.86) Fair Value of Plan Assets at the end of the period 653.35 634.58 Funded Status (445.34) (498.09) Excess of actual over estimated return on Plan Assets 0.25 0.47 V. Actuarial Gain / (Loss) Recognized Actuarial Gain / (Loss) for the period (Obligation) 112.06 36.60 Actuarial Gain / (Loss) for the period (Plan Assets) 0.25 0.47 Total Gain / (Loss) recognized for the period 112.31 37.07 Actuarial Gain / (Loss) recognized for the period 112.31 37.07 Unrecognized Gain / (Loss) at the end of the period 0.00 0.00 VI. Amounts to be recognized in the balance sheet and statement of profit and loss PVO at the end of the period 1,098.69 1,132.68 Fair Value of Plan Assets at the end of the period 653.35 634.58 Funded Status (445.34) (498.09) Unrecognized Actuarial Gain / (Loss) 0.00 0.00 Net Asset / (Liability) recognized in the balance sheet (445.34) (498.09)

VII. Expense recognized in the statement of profit & loss

Current Service Cost 43.72 58.67 Interest Cost 45.09 82.63 Expected Return on Plan Assets (29.26) (51.15)

Net Actuarial (Gain) / Loss recognized for the period

(112.31)

(37.07)

105

Expense recognized in the statement of profit and loss (52.76) 53.08 VIII. Movements in the Liability recognized in Balance Sheet Opening Net Liability 498.09 482.68 Expenses as above (52.76) 53.08 Contribution Paid 0.00 (37.66) Closing Net Liability 445.34 498.09

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The above information is certified by the actuary.

106

Statement of Cash Flow, as restated ANNEXURE - IV (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax and extra-ordinary items 71.67 1,432.64 951.49 374.87 1,256.85 1,362.52 Adjustments for: Depreciation 625.06 1,398.42 654.40 1,066.90 1,122.64 1,310.41 Amortisation of Intangible Assets 0.70 2.96 1.49 2.56 0.73 0.37 Assets written off - 17.55 0.07 - 54.87 45.48 Profit on sale of assets (4.09) (2.05) (11.11) 0.59 (7.01) (58.47) Interest & Finance charges 728.35 2,310.44 897.36 1,450.41 1,258.96 1,710.00 Investment income (16.52) (95.18) (130.45) (232.88) (79.54) (16.64)

Total 1,333.50 3,632.14 1,411.76 2,287.58 2,350.65 2,991.15 Operating Profit Before Working Capital Changes 1,405.17 5,064.78 2,363.25 2,662.45 3,607.50 4,353.67

Decrease / (Increase) in trade & other receivables

(1,201.84) (1,806.38) 2,504.63 (2,340.35) (481.70) (870.76)

Decrease / (Increase) in inventories 13,877.78 4,386.87 (12,405.13) (7,125.86) 3,983.38 3,530.44 (Decrease) / Increase in trade payables (4,618.58) (15,229.13) 14,686.54 8,473.80 (605.63) (916.03) Cash Generated From Operations 9,462.53 (7,583.86) 7,149.29 1,670.04 6,503.55 6,097.32 Direct taxes paid (31.83) (86.04) (123.60) (226.80) (126.98) 62.31 Cash Flow Before Extra-Ordinary Items 9,430.70 (7,669.90) 7,025.69 1,443.24 6,376.57 6,159.63 Extra-ordinary items - - - - - - Net Cash Form Operating Activities (A) 9,430.70 (7,669.90) 7,025.69 1,443.24 6,376.57 6,159.63

B CASH FLOW FROM INVESTING ACTIVITIES

Purchase of assets (2,209.19) (4,207.66) (6,051.23) (4,733.95) (959.55) (362.73) Proceeds from sale of assets 13.81 41.41 12.60 0.74 24.58 4.40 Purchase/sale of investments 22.25 (1,830.19) (0.28) - (2.24) - Advance against subscription of shares (77.93) 745.45 (191.87) (1,032.27) - -

Interest & dividend received

39.23

124.01

92.84

228.86

74.65 12.21

Capital Subsidy received - - - - - 300.00 Net Cash Form Investing Activities (B) (2,211.83) (5,126.98) (6,137.94) (5,536.62) (862.56) (46.12)

C CASH FLOW FROM FINANCINING ACTIVITIES

Interest Paid (1,071.86) (2,977.87) (1,057.42) (1,526.02) (1,301.67) (1,784.97) Proceeds from issuance of share capital - - - - - -

Proceeds from borrowings (7,872.55) 3,868.31 7,174.74 8,189.64 (3,394.52)

(1,328.35)

Dividend paid (6.06) 3.63 (208.37) (201.71) (184.41)

(2.69) Net Cash Form Financing Activities (C) (8,950.47) 894.07 5,908.95 6,461.91 (4,880.60) (3,116.01)

107

Net Increase/(Decrease) in cash & cash equivalents

(1,731.60) (11,902.81) 6,796.70 2,368.53 633.41 2,997.50

Opening cash and cash equivalents 2,826.38 14,729.19 7,932.49 5,563.96 4,930.55 1,933.05 Closing cash and cash equivalents 1,094.78 2,826.38 14,729.19 7,932.49 5,563.96 4,930.55 Notes to Cashflow Statement

1. Cashflow Statement has been prepared under indirect method as set out in Accounting Standard 3 issued by ICAI.

2. Purchase of fixed assets includes movement in capital work in progress.

3. Direct taxes paid are treated as arising from Operating Activities and are not bifurcated between Investing and Financing Activities.

4. Cash and cash equivalents are Cash and Bank Balances as per Schedule I in the Balance Sheet.

5. Cash Flow Statement in respect of continuing operations and discontinued operations is separately furnished as required by AS-24.

Note: Reasons for the increase in levels of inventories: Sale of sugar is controlled by the Government and is based on monthly release orders for each mill. As such when the mills are able to operate to their full capacities, sugar stocks increase leading to higher inventories as well as higher borrowings. The company has also been implementing a 3500 TCD sugar mill 15 MW cogen plant at Jewarigi details of which are provided on page No.72 of Letter of Offer. Stock of sugar increased from 644755 Qtls to 1736097 Qtls during the period.

Statement of Dividend Paid ANNEXURE - V (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 On Equity Shares: No of Equity Shares 90,000,000 90,000,000 90,000,000 90,000,000 90,000,000 5,625,000 Rate % NA 20% - 20% 20% 30% Amount of Dividend NA 180.00 - 180.00 180.00 168.75 Dividend Tax NA 30.59 - 25.24 25.24 22.06 Total Pay Out NA 210.59 - 205.24 205.24 190.81 Notes: In 2004-05, the Company split its existing shares of Rs. 10 each into 10 shares of Re. 1 each, further the Company issued bonus shares in the ratio 3:5.

108

ANNEXURE - VI (Rs. in Lakh) Statement of Capitalisation Pre-issue Post Issue as at 30-09-2008 1. Secured Loans 19,918.67 19,918.67 2. Unsecured Loans 3,425.84 1,753.52 3. Total Debts 23,344.51 21,672.19 4. Less: Short term debt 12,561.81 10,889.49 5. Total Long term debt 10,782.70 10,782.70 Shareholders Funds 6. Share Capital 900.00 1,125.00 7. Promoters Contribution towards equity share capital - 8. Reserves & Surplus 7,187.41 8,762.41 9. Total Shareholders Funds 8,087.41 9,887.41 Long Term Debt to Equity Ratio (5/9) 1.33 1.09 Total Debt to Equity (3/9) 2.89 2.19 * The Post Issue position is shown only considering the increase in Share Capital, Share Premium and repayment of Demand Loan to Bank of India which are proposed to have been utilized for the objects for which the rights issue is proposed., the other regular business transactions are not taken into account.

109

Statement of Accounting Ratios (on restated profits) ANNEXURE - VII (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Profit before Tax and exceptional

items 71.67 1,432.64 951.49 374.87 1,256.85 1,362.52

Less: Current Tax & Fringe Benefit

Tax 98.04 123.65 80.51 127.42 98.00 146.55

(i) Profit after current tax & FBT (26.37) 1,308.99 870.98 247.45 1,158.85 1,215.97 Less: Deferred Tax 12.18 (163.68) 103.76 (37.59) (207.59) 240.58 (ii) Profit after Deferred Tax (38.55) 1,472.67 767.22 285.04 1,366.44 975.39 (iii) Profit after Current Tax & FBT but

before

depreciation and write off 599.39 2,727.92 1,526.94 1,316.91 2,337.09 2,572.23 (iv) Weighted average number of Equity

Shares 900.00 900.00 900.00 900.00 900.00 562.50

EPS Basic / Diluted (Rs. per share)

After Current Tax [(i)÷(iv)] (0.03) 1.45 0.97 0.27 1.29 1.35 After Deferred Tax [(ii)÷(iv)] (0.04) 1.64 0.85 0.32 1.52 1.08 Cash EPS (iii)÷(iv) 0.67 3.03 1.70 1.46 2.60 2.86

Net Worth /NAV/ Return on Net Worth:

Profit after tax and exceptional items

(38.55) 1,472.67 767.22 285.04 1,366.44 975.39

Net Worth before Deferred tax 8,564.33 6,904.05 7,290.76 7,077.76 7,024.28 6,070.66 Return on Net Worth (% age) -0.45% 21.33% 10.52% 4.03% 19.45% 16.07%

Net Asset Value per Share (NAV) (Rs.)

9.52 7.67 8.10 7.86 7.80 6.75

Net Worth after Deferred Tax (Adjusted Net Worth)

8,087.41 6,439.31 6,510.69 6,390.17 6,310.37 5,149.17

Return on Net Worth (% age) -0.48% 22.87% 11.78% 4.46% 21.65% 18.94%

Net Asset Value per Share (NAV) (Rs.)

8.99 7.15 7.23 7.10 7.01 5.72

Notes: 1. In 2004-05, the Company split its existing shares of Rs. 10 each into 10 shares of Re.1 each. Further, the

Company issued bonus shares in the ratio 3:5. The earning per share and net asset value per share for the year 2003-04 is adjusted for split up of shares and bonus shares.

2. Book value per share as on 30.09.2008 was Rs. 8.98/- 3. The company has complied with AS-20 in calculation of EPS and CA certificate in this regard is obtained.

110

Statement of Other Incomes, as restated ANNEXURE -

VIII (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 A. items of Recurring Nature 1 Dividend on Non-trade Investments 0.97 1.00 0.28 0.24 0.24 0.24

2 Interest on Loans, Bank Deposits and Others

34.26 149.53 169.49 232.64 131.88 118.31

3 Machinery/Bullock Cart Hire Charges

5.83 10.88 15.90 11.22 2.58 5.47

4 Profit on sale of IML and others - - - - - - 5 Transport Subsidy on Export Sugar 446.11 1,260.36 - - - - 6 State Subsidy on Export Sugar - - - - - - 7 Sale of CER Units (Carbon Trading) - - 350.91 389.75 - - 8 Foreign Currency Fluctuations - - 18.69 - - - 9 Miscellaneous Receipts 112.93 210.07 157.87 181.62 224.28 93.15

B. Items of Non-Recurring Nature 1 Insurance Claims Received 8.88 0.77 2.18 3.70 0.02 0.99 2 Profit on sale of fixed assets 4.09 2.05 11.11 - 7.01 3.71

3 Excess Provisions & Unclaimed Credit

Balances written back 18.11 115.52 315.30 106.73 5.46 15.19

4 Insurance and Storage for holding buffer

stock of sugar 22.12 68.66 - - 7.66 32.32 5 Refund of Sales Tax / Excise Duty 0.36 - 11.83 3.60 8.02 -

653.66 1,818.84 1,053.56 929.50 387.15 269.38 Investments ANNEXURE - IX

(At Cost, Fully Paid, Long Term, Non-trade) (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Quoted, Government Units of UTI Mutual Fund 2.23 24.48 24.08 23.81 23.81 23.81 Unquoted, Other than Government Shares in other companies 1,838.51 1,838.51 8.72 8.72 8.72 6.47 1,840.74 1,862.99 32.80 32.53 32.53 30.28 Less: Provision for diminution in the value

of investments 3.67 3.67 3.67 3.67 3.67 3.67 1,837.07 1,859.32 29.13 28.86 28.86 26.61 Aggregate Market Value of Quoted Investments

3.24 26.23 25.58 26.11 26.36 25.96

111

Statement of Sundry Debtors (Unsecured) ANNEXURE -

X (Age-wise Analysis) (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Outstanding for more than six months Considered Good 154.37 144.63 632.42 1,585.96 347.13 454.09 Considered Doubtful 417.30 418.35 337.37 236.46 288.87 54.41 Others Considered Good 2,654.45 3,448.03 1,435.32 2,361.31 2,021.57 2,146.08 Considered Doubtful - - 65.76 109.31 22.69 -

Total 3,226.12 4,011.01 2,470.87 4,293.04 2,680.26 2,654.58

Less: Provision for Doubtful Debts 417.30 418.35 403.13 345.77 311.56 54.41 Total Sundry Debtors (Good) 2,808.82 3,592.66 2,067.74 3,947.27 2,368.70 2,600.17

Statement of Loans & Advances (Unsecured), as restated ANNEXURE - XI (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Advances to Cultivators & Contractors Considered Good 1,199.58 370.65 846.39 1,998.66 1,301.82 557.03 Considered Doubtful 265.82 268.93 183.67 110.45 65.99 69.28 Advances to Suppliers of Machinery / Stores, etc.

Considered Good 396.78 320.62 1,548.27 1,245.81 504.71 122.76 Considered Doubtful 8.54 8.69 2.48 1.71 0.88 1.43

Total 1,870.72 968.89 2,580.81 3,356.63 1,873.40 750.50 Less: Provision for Doubtful Advances 274.36 277.62 186.15 112.16 66.87 70.71 Total Loans & Advances (Good) 1,596.36 691.27 2,394.66 3,244.47 1,806.53 679.79 Advance paid for/ against subscription to shares

519.14 478.71 1,224.16 1,032.28 - -

Advance Payment of Taxes including FBT

267.76 235.93 329.12 203.87 121.40 38.73

Less: Deducted from Provision for Tax as pre contra 267.76 201.60 213.25 165.25 121.40 38.73 - 34.33 115.87 38.62 - -

112

Details pertaining to Advance paid/against subscription of shares –

a) To whom advance has been given

b) Whether shares are allotted c) Terms of issue

d) In case of shares allotted how does it impact the financials statements

The advances against subscription of shares have been paid to Rs. Lakh Sadashiva Sugars Ltd. 1,250.31 Ugar Quality Packaging Pvt. Ltd. 100.00 Total 1350.31

The shares are yet to be allotted as on date.

The shares will be issued at par ranking pari-passu with the existing shares Both the above companies are setting up manufacturing facilities and do not have any carried forward losses etc. Additionally both the above companies are not subsidiaries of the Issuer Company and as such the financial statements of the Issuer Company will not be affected except that the subscription to shares will be shown as investments

Statement of Unsecured Loans ANNEXURE - XII (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Fixed Deposits From Promoter Directors 13.02 13.02 5.98 5.98 5.48 - From Relatives of Promoter Directors 12.44 22.63 15.68 17.10 16.68 11.99 From Enterprises over which

Promoter Directors and their relatives are able to exercise influence - 1.30 1.30 1.30 1.30 1.30

Others 1,000.36 874.11 1,260.67 1,300.39 1,252.08 1,359.99 Unsecured Loans from Banks /Others 2,073.91 1,576.44 - 2,000.00 - 503.96 Loan from Government of Karnataka in the form of Deferment of Cane Purchase Tax 326.11 450.44 250.02 250.02 63.78 63.78 3,425.84 2,937.94 1,533.65 3,574.79 1,339.32 1,941.02

Maturity period and interest rate of Fixed Deposits outstanding as 30-09-2008: Fixed Deposits have been taken at varied rate of interest of 10.5% p.a.and 11% p.a. for senior citizen from 29-08-2008. Unclaimed Fixed Deposits as on 30.09.2008 was Rs.4.85 Lakh.

113

Note: 1. There is no default in repayment of Fixed Deposit Companies Act (Acceptance of Deposit Rules) as the Company is complying with all rules of the Act. 2. Loan from Bank of India:

Lender Nature of Loan

Amount of Loan

Rate of Interest

O/s as on 30.09.2008

Repayment Schedule

Terms & Condition

Security

Bank of India Unsecured Demand

Loan

1,500 lakh

10.50% 2073.91 lakh Payable on Demand

No specific

terms

Personal Guarantee of

Executive Directors

3. Loan from Government of Karnataka in the form of deferment of Cane Purchase Tax: Terms & Conditions: This loan is granted on the basis of cane crushed above 12 lakh MT during the one crushing season and as an incentive for expansion in crushing capacity from 7500TCD to 10,000 TCD. Interest Rate: It is a interest free loan Repayment schedule: 20 equal installments starting from April, 2009. Security: No security

Statement of Secured Loans ANNEXURE -

XIII (Rs. in Lakh)


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 a. Term Loans The IFCI Ltd - - - - - 105.76 Bank of Baroda 4,380.80 4,017.98 2,505.92 - - 1,820.28 Union Bank of India - - - - - 604.86 Central Bank of India 2,019.80 2,031.00 3,054.28 - - 619.69 STM & TDB 161.20 192.62 52.26 58.48 82.12 83.77 Ashok Leyland Finance Ltd - - - - 2.91 5.84 Rabo India Finance Pvt Ltd - - 1,200.00 1,400.00 1,800.00 - Axis Bank Ltd 2,246.15 2,907.69 4,000.00 3,600.00 1,800.00 - Rabo International, Singapore 1,077.76 1,268.60 1,388.88 1,407.54 - - Sugar Development Fund 570.88 570.88 - - - - 10,456.59 10,988.77 12,201.34 6,466.02 3,685.03 3,240.20 b. Working Capital Loans ICICI Bank Ltd. 34.19 157.44 279.52 92.32 70.96 89.50 Central Bank of India 2,487.84 7,389.22 9,322.00 4,797.77 4,608.01 5,152.37 Bank of Baroda 932.00 2,717.29 1,722.28 3,969.85 1,707.77 4,064.85 Union Bank of India 109.75 594.55 252.62 1,273.26 573.27 876.00 United Western Bank Ltd.. - - - - 0.01 0.60 Sangli Urban Co-op Bank - - - - - 14.35 Bank of India 2,898.30 3,631.84 - - - - HDFC Bank Ltd - - 2,037.34 - - - IDBI LTD. 3,000.00 2,800.00 - - - - Total 9,462.08 17,290.34 13,613.76 10,133.20 6,960.02 10,197.67 19,918.67 28,279.11 25,815.10 16,599.22 10,645.05 13,437.87

114

Secured Loans – 30-09-2006 and 31-03-2007 – reasons for increase Comparing the figures, there has been an increase of Rs. 9,215.88

lakh. The increase has been in the following loan accounts: Loan Accounts: Amount as on

31-03-2007 Rs. Lakh

Amount as on 30-09-2006

Rs. lakh

Increase

Rs. lakh

Decrease

Rs. Lakh Working capital loan against hypothecation of stores and spares

279.52

92.32

187.20

--

Working capital loan against pledge of stock of sugar

11,296.90

10,040.88

1,256.02

--

Working capital loan against FD Receipt 2,037.34 0.00 2,037.34 -- Corporate Loan from Axis Bank Ltd. 3,000.00 2,400.00 600.00 -- Axis Bank Ltd 1,000.00 1200.00 -- (200.00) Rabo India Finance 1200.00 1400.00 -- (200.00) Rabo International 1388.88 1407.54 -- (18.66) Sugar Technology mission & board 52.26 58.48 -- (6.22) Term Loan for Jewargi Project from Bank of Baroda

2,505.92

0.00

2,505.92

Term Loan for Jewargi Project from Central Bank of India

3,054.28

0.00

3,054.28

Total 25815.10 16599.22 9,640.76 (424.88) The net increase in secured loans is Rs. 9215.88 Lakh The Secured loan during the year ended 31.03.2007 has gone up because of the Term Loan taken from Bank of Baroda & Central Bank of India for Jewargi Project & also the working capital finance has gone up due to increased crushing and increase in holding of stock of sugar for the period ended 31.03.07

115

Details of Term Loans as on 30th September, 2008. (Rs. in Lakh)

Sr No

Name of the Lender Sanctioned

Amount Rs.in Lakh

Date of Sanction

Balance 30.09.2008

Rs. in Lakh

Rate of Interest %

Repayment Schedule

Pre-payment Clause

1 Bank of Baroda 4500 13.04.2006 4,381

No specific clause

9.5% p.a for first two years,

thereafter 2% below

BPLR. Payable monthly

21 equal quarterly

installments of Rs. 204.6

Lakh

2 Central Bank of India 3500 01.06.2006 2,020

No specific clause

2% below BPLR

66 equal monthly

installments of Rs 53

Lakh

3 112 13.06.2003 11

Sugar Technology Mission & Technology Development Board No specific

clause

5% pa payable at

yearly basis

5 yearly instalments of Rs 11.20 lakh each-

STM

No specific clause

5% pa payable at half yearly

basis

9 half yearly instalments of Rs 6.23 lakh each-

TDB

4

Industrial Development Bank 0f India Ltd. 3000 05.03.2008

3,000

No specific clause

12% p.a., which is

eligible for subvention

upto 12% by SDF and Central

Government.

Initial two years

moratorium- thereafter, 24

monthly instalments of Rs. 1.25

Cr. each

5 Axis Bank Ltd 2000 29.12.2004 400

No specific clause

Up to November,

2005 8% p.a payable monthly. After that

benchmark rate + 160 bps p a.

20 equal quaterly

installment of Rs. 100 Lakh

per installement.

116

6 Axis Bank Ltd 3000 17.07.2006

1,846

13 equal quarterly

installment of Rs.231 Lakh

each.

PLR-3.75% i.e 9.25% p.a

p.m at present for

the first year. 5 year G-Sec+ 175

bps p.a thereafter.

Company to have a call option and the bank to have a put

option at the end of 24

months from the date of

first disbursement after giving one month

notice.

7 1334 03.02.2006 1,078

Rabo International, Singapore

(€24lakh)

12 equal quarterly

installments of € 2,00,000

Within 15 days prior irrevocable

written notice to the

lender.

1.5% p.a above six months

EURIBOR for the

relevant interest period.

8 571 02.02.1998 571

Sugar Development Fund

No specific clause

4% p.a.

Repayment of principal and interest

to commence after the

expiry of 1 year from the

date of disbursement.

8 180 06.06.2007 150

Technology Development Board

5% p.a payable half

yearly.

No specific clause

9 equal half yearly

instalments of Rs 20 lakh

each

117

Details of Details of Working Capital Facilities as on 30th September, 2008. (Rs. in Lakh)

Sr No Name of the Bank Nature of Loan

Limit Sanctioned Rs in Lakh

Loan Outstanding

as on 31-03-2008

Rate of Interest

1 Central Bank of India

- 11%

ICICI Bank Ltd.

Cash Credit (Hypothecation)

34.19 11%

2 Central Bank of India

27,200.00

2,487.84 BPLR

Bank of India 2,898.30 9%

Bank of Baroda 932.00 11%

Union Bank of India

Cash Credit (Pledge)

109.75 11%

3 Bank of India Unsecured Demand

Loan

1,500.00

1,672.33 10.50%

Total

28,700.00

8,134.41

1. Securities for above loans: a) For Term Loan: The Loans from Rabo India Finance Pvt. Ltd. (which has been pre-paid) and UTI Bank are secured by first 'pari passu' charge on all movable and immovable fixed assets, excluding ETP Plant and exclusive first charge on receivables generated from sale of power.The Loans from Central Bank of India and Bank of Baroda are secured by hypothecation over machinery and spares of Jewargi Plant. The Loan from Rabo International is secured by hypothecation of plant & machinery acquired for manufacturing sugar ships. The loan from Sugar Technology Mission and Technology Developement Board is secured by hypothecation of Effluent Treatment Plant.Loan from Sugar Development Fund issecured by second charge on all the Plant and Machinery. Loan from Industrial Development Bank of India is secured by subsequent charge on all Plant and Machinery situated at Ugarkhurd.. b) For Working Capital Loan:

Cash Credit (Hypothecation): Secured by hypothecation of stock of raw material, stores,consumables, stock in process, finished goods, book debts, both present and future.

Cash Credit (Pledge) : Secured by pledge of stock of Sugar

2. There are no re-schedulement / pre-payment schedules in respect of loans outstanding as on 30-09-2008.

3. There is no amount in default in respect of principal and interest as on 30-09-2008. No penalty was levied/paid in respect of defaults/pre-payments.

118

Statement of Tax Shelters ANNEXURE - XIV (Rs. in Lakh)

Particulars 31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004

AY 2008-09 AY 2007-08 AY 2006-07 AY 2005-

06 AY 2004-

05 Tax Rate

(including Surcharge & Education Cess)

33.99% 33.66% 33.66% 36.60% 35.88%

Profit as per Profit & Loss Account

617.88 (2,410.90) 1,875.24 1,862.78 532.46

Tax at Notional Rate 210.02 (811.51) 631.20 681.78 191.09 Adjustments: Permanent Difference 31.36 13.43 (2,458.23) (1,688.12) (219.82) Export Profit - - - - - Timing Difference:

Difference between Tax depreciation

and Book depreciation 461.20 1,107.45 447.75 0.97 (160.29) Other adjustments (66.26) 1,290.03 135.25 683.51 (152.47) Net adjustments 426.30 2,410.91 (1,875.23) (1,003.64) (532.58) Tax saving thereon 144.90 811.51 (631.20) (367.33) (191.09) Total Taxation 65.12 - - 314.45 -

Tax on Brought Forward Unabsorbed

Depreciation, adjusted 371.63 - - (270.29) (213.31) Total Normal Tax Payable - - - 44.16 -

Taxable Income as per MAT (i.e Book Profit)

596.14 - 1,873.47 1,861.07 532.40

Tax Payable as per MAT (including Sc & Ed)

67.54 - 157.66 145.93 40.93

Tax as per Income Tax Return 67.54 - 157.66 145.93 40.93

Important Notes: The Company follows April-March year for purposes of income tax, hence, the above figures are furnished on the basis of Returns of Income filed for years ended on 31st March each year upto 31-03-2008. 30th September not being the year end for the purposes of Income Tax Act, tax shelter for the period ending 30th September, 2008 is not furnished.

119

Statement of transactions with related parties ANNEXURE - XV (Rs. in Lakh)

A. Directors in Wholetime Employment (KMPs) and transactions with them: Shri R. V. Shirgaokar - Chairman & Managing Director; Shri P. V. Shirgaokar - Executive Director and Shri S. S.

Shirgaokar - Wholetime Director


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Remuneration Paid 75.20 150.54 31.14 60.48 68.42 63.10 Purchase of Sugarcane 0.97 2.88 4.04 5.88 2.81 2.48 Purchase of Plant & Machinery - - - - - - Purchase of Other Items - - - - - - Sales - Others / Consultancy - - - - - - Deposit Received - 13.02 5.48 5.98 - - Deposit Paid / Refunded - 5.98 - 5.98 - - Interest Paid 0.65 0.74 0.22 0.12 - - Dividend Received - - - - - - Dividend Paid 3.31 - 3.22 3.08 2.09 - Consultancy / Repairs / Others - - - - - - Rent Received - - - - - - Warehousing Charges Paid - - - - - - Outstanding Balances

Payable 87.50 61.83 30.94 33.08 10.59 1.14 Receivable - - - 2.98 - - Advance against Capital Orders - - - - - -

B. Relatives of KMPs and transactions with them: Smt. Vinita M Samant, Smt. Savita S Shirgaokar, Shri. Niraj S Shirgaokar, Smt. Chitra A Dalvi, Smt.

Madhavi R. Dalvi, Shri. Sachin R Shirgaokar, Smt. Smita P Shirgaokar, Smt. Shilpa N. Kumar, Smt. Sindhu V. Dalvi, Smt. Rekha R. Khedekar, Smt. Puja H. Pusalkar, Late Smt. Tarabai S. Shirgaokar


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Remuneration Paid 5.42 12.03 7.52 4.72 0.91 2.57 Purchase of Sugarcane 0.21 1.29 0.77 - - 0.13 Purchase of Plant & Machinery - - - - - - Purchase of Other Items - - - - - - Sales - Others / Consultancy - - - - - - Deposit Received 12.44 22.63 10.54 30.89 14.79 18.88 Deposit Paid / Refunded 11.84 17.87 4.02 26.96 13.42 5.13 Interest Paid 1.15 1.51 0.26 2.48 2.23 2.36 Dividend Received - - - - - - Dividend Paid 3.85 - 3.58 8.46 5.46 - Consultancy / Repairs / Others - - - - - - Rent Received - - - - - - Warehousing Charges Paid - - - - - - Outstanding Balances

Payable 24.28 0.38 4.24 - - - Receivable 0.61 1.17 0.50 - 0.01 - Advance against Capital Orders - - - - -

120

C. Associate Companies and transactions with them: Ugar Consultancy Ltd., Ugar Theatres Pvt. Ltd., Ugar Quality Packaging Pvt. Ltd., Sadashiva Sugars Ltd.


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Remuneration Paid - - - - - - Purchase of Sugarcane - - - - - - Purchase of Plant & Machinery - - 1.78 - 0.23 4.31 Purchase of Other Items 4.98 - - - - - Sales - Others / Consultancy 0.95 2.11 0.30 0.58 0.21 - Deposit Received - - - - - - Deposit/ Advances Paid / Refunded 74.95 478.71 - - - - Interest Paid - - - - - - Dividend Received 0.97 0.61 - 0.24 0.24 - Dividend Paid - - - - - -

Consultancy / Repairs / Others 15.82 30.87

15.95 17.49 5.31 4.87

Rent Received 0.07 0.07

0.03 0.06 0.06 -

Warehousing Charges Paid - 1.18

0.33 0.60 0.80 0.06

Outstanding Balances - Payable 1.66 2.84 4.30 - - - Receivable 561.37 486.41 8.24 15.66 15.97 5.57 Advance against Capital Orders - - - - - -

D. Enterprises over which KMPs or relatives of KMPs are able to exercise significant influence and transactions with

Them

S. B. Reshellers Pvt. Ltd., Shantaram Machineries Pvt. Ltd., Sangli Fabricators Pvt. Ltd., Tara Tiles Pvt. Ltd., Ugar Pipe Industries Pvt. Ltd., Tara Flooring Pvt. Ltd., Vinayak Shirgaokar Investments Pvt. Ltd., Suresh Shirgaokar Investments Pvt. Ltd., D. M. Shirgaokar Investments Pvt. Ltd., Sanjeev Shirgaokar

Investments Pvt. Ltd., Prafulla Shirgaokar Investments Pvt. Ltd., Mohan Shirgaokar Investments Pvt. Ltd., Shishir Shirgaokar Investments Pvt. Ltd., Prabhakar Shirgaokar Investments Pvt. Ltd., M/s Shirgaokar

Brothers


Particulars 30/09/2008 31/03/2008 31/03/2007 30/09/2006 30/09/2005 30/09/2004 Remuneration Paid - - - - - - Purchase of Sugarcane - - - - - - Purchase of Plant & Machinery 40.55 718.29 1,124.48 94.57 - - Purchase of Other Items - - 3.26 19.83 94.22 26.71 Sales - Others / Consultancy 16.48 25.80 29.91 23.05 13.51 28.50 Deposit Received - 1.30 1.30 1.30 1.30 1.30 Deposit Paid / Refunded - 1.30 - 1.30 1.30 0.80 Interrest Paid 0.06 0.10 0.05 0.08 0.11 0.22 Dividend Received - - - - - - Dividend Paid 54.11 - 54.12 54.08 30.67 - Consultancy / Repairs / Others 54.40 43.08 24.62 76.98 - -

121

Rent Received - - - 0.70 - - Warehousing Charges Paid - - - - 1.61 - Labour Charges paid - - - - 0.09 - Outstanding Balances

Payable 15.49 9.33 1.89 81.99 27.45 53.25

Receivable - 9.45

18.92 404.68 5.84 23.65

Advance against Capital Orders 10.42 - 168.27 399.45 - - Payable against Capital Orders - 31.42 - - - -

Statement of Qualification in Auditors' Report ANNEXURE - XVI

There are no qualifications in Auditor's Reports for the financial years ended 30th September, 2003, 2004, 2005, 2006 and 31st March, 2007

Remarks in Annexure to Auditors’ Report, Point No. (i)(b): for the year ending 31th March, 2008

Fixed Assets have been physically verified during the year. However, reconciliation of the same with book records is not yet completed.

Management Explanation: We have conducted physical verification of Fixed Assets and have also taken necessary steps to pass the appropriate entries in respect of assets those were not found in existence. Now, we are in process of reconciliation of the assets with the books of accounts. Considering the volume, we feel that it will take some more time but we will be able to complete the work by end of June, 2008. Remarks in Annexure to Auditors’ Report, Point No. (xvii): for the year ending 31th March, 2008 According to information and explanation given to us, and overall examination of the Balance sheet we report that funds raised on short term basis have been used for long term purposes to the tune of Rs. 1,717 lakh out of which Rs. 1,576 lakh has been taken as short term loan which the Company intends to repay on issue of Right shares. Management Explanation: In order to meet the urgent long term requirement for completing the Sugar projects in time we have utilized short term funds for long term purpose. The short term loan of Rs. 15 crore taken from Bank of India used for long term purpose will be repaid out of the proceeds of Right Issue.

Changes in Significant Accounting Policies ANNEXURE - XVII There are no changes in Significant Accounting policies during the past five years and year ended on 30-09-2008 except as and when Accounting Standards issued by the Institute of Chartered Accountants of India or Companies (Accounting Standards) Rules ,2006 were made applicable.

Date: 24/10/2008 Place: Pune

For M/s P. G. Bhagwat, Chartered Accountant

M. K. Shevade Partner

Membership. No: 18651

122

DETAILS OF GROUP COMPANIES 1] SANJIV SHIRGAOKAR INVESTMENTS PVT. LTD. Sanjiv Shirgaokar Investments Private Limited was incorporated on 24 th August, 1989. The Company was incorporated to carry out the business of an investment company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, bonds, notes, obligations and securities issued or guaranteed by any company, wherever incorporated or carrying on business and debentures, bonds, notes, obligations and securities issued or guaranteed by any government sovereign, ruler, commissioner, public body or authority. The Registered Office of the Company is situated at Vinayak Apartment, Flat No. 10, 2 nd

Floor, Nagraj Colony, Sangli, Maharashtra-416 415. 1. The Present Directors of the Company are as under:

Name Designation Mr. Sachin Rajendra Shirgaokar Director Mr. Chandan Sanjeev Shirgaokar Director Mr. Sohan Sanjeev Shirgaokar Director Smt. Radhika Sanjeev Shirgaokar Director

2. Shareholding Pattern as on 31.03.2008

EQUITY SHAREHOLDERS

Sr. No Name of Shareholder No. of Shares

Shares as a %age of total number of

shares 1 Smt. Radhika Sanjeev Shirgaokar & 2831 40.49 Mr. Chandan Sanjeev Shirgaokar. 2 Smt. Radhika Sanjeev Shirgaokar & 3070 43.91 Mr. Sohan Sanjeev Shirgaokar. 3 Mr. Chandan Sanjeev Shirgaokar & Smt. Radhika Sanjeev Shirgaokar. 530 7.58 4 Mr. Sohan Sanjeev Shirgaokar & Smt. Radhika Sanjeev Shirgaokar. 291 4.16 5 Shri Chandan Sanjeev Shirgaokar. ( Karta of Sanjeev Suresh Shirgaokar 270 3.86

H.U.F.) & Shri Sohan Sanjeev Shirgaokar TOTAL 6992 100.00

3. Brief Financial Results of the Company is as under:

As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 6,99,200 6,99,200 6,99,200 6,99,200 6,99,200 9,64,300 Reserves and Surplus 24,66,697 25,64,385 17,47,381 15,73,444 14,42,364 14,17,670 Total Income 93,017 10,20,109 3,82,418 3,07,304 1,01,197 2,03,765 Profit/(Loss) after Tax

(97,687) 8,17,005 1,73,937 2,50,671 24,693 1,31,262

Earnings per Share(Rs)

(14) 117 25 36 04 17

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985.

123

2] SHISHIR SHIRGAOKAR INVESTMENTS PVT. LTD.

Shishir Shirgaokar Investments Private Limited was incorporated on 13 th September, 1989. The Company was incorporated to carry out the business of an investment company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, bonds, notes, obligations and securities issued or guaranteed by any company, wherever incorporated or carrying on business and debentures, bonds, notes, obligations and securities issued or guaranteed by any government sovereign, ruler, commissioner, public body or authority. The Registered Office of the Company is situated at Vinayak Apartment, Flat No. 10, 2 nd


Name Designation Mr. Rajendra Vinayak Shirgaokar Director Mr. Shishir Suresh Shirgaokar Director Mr. Sanat Kumar Shirgaokar Director Mrs. Savita Shishir Shirgaokar Director Mrs. Asawari Niraj Shirgaokar Director


EQUITY SHAREHOLDERS



shares 1 Shri Shishir Suresh Shirgaokar. 1 0.01 2 Mrs. Savita Shishir Shirgaokar. 1091 8.45 3 Shri Niraj Shishir Shirgaokar. 879 6.80 4 Shri Shishir Suresh Shirgaokar & Mrs. Savita Shishir Shirgaokar. 1420 10.99 5 Mrs. Savita Shishir Shirgaokar & Shri Shishir Suresh Shirgaokar. 4205 32.55 6 Shri Niraj Shishir Shirgaokar & Shri Shishir Suresh Shirgaokar. 455 3.52 7 Shri Shishir Suresh Shirgaokar.( H.U.F. ) 415 3.21 8 Suresh Shirgaokar Investments Pvt. Ltd. 1210 9.37 9 Prabhakar Shirgaokar Investments Pvt. Ltd. 1030 7.97

10 Prafulla Shirgaokar Investments Pvt. Ltd. 230 1.78 11 Shri Niraj Shishir Shirgaokar &

Mrs. Asawari Niraj Shirgaokar. 565 4.37 12 Mrs. Asawari Niraj Shirgaokar & Shri Niraj Shishir Shirgaokar. 200 1.55

13 Miss Puja Shishir Shirgaokar & Shri Shishir Suresh Shirgaokar. 250 1.94

14 Shri Shishir Suresh Shirgaokar. 966 7.48 ( Trustee of Niraj Shishir Shirgaokar Trust. )

TOTAL 12917 100.00 PREFERENCE SHAREHOLDERS



shares 1 Shri Shishir Suresh Shirgaokar & 3200 58.18

Mrs. Savita Shishir Shirgaokar. 2 Shri Shishir Suresh Shirgaokar. 2300 41.82 ( Trustee of Niraj Shishir Shirgaokar Trust. )

TOTAL 5500 100.00

124

3. Brief Financial Results of the Company is as under: As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 18,41,700 18,41,700 18,41,700 18,41,700 18,41,700 12,48,000 Reserves and Surplus 34,38,102 35,61,384 27,01,425 25,21,200 23,04,611 21,93,586 Total Income 1,59,931 11,59,548 4,84,688 4,09,404 2,45,061 3,42,843 Profit/(Loss) after Tax (1,23,281) 8,59,959 1,80,225 3,30,047 1,11,025 2,41,148 Earnings per Share(Rs) (11) 65 12 24 7 21

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 3] PRAFULLA SHIRGAOKAR INVESTMENTS PVT. LTD. Prafulla Shirgaokar Investments Private Limited was incorporated on 3 rd September, 1991. The Company was incorporated to carry out the business of an investment company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, bonds, notes, obligations and securities issued or guaranteed by any company, wherever incorporated or carrying on business and debentures, bonds, notes, obligations and securities issued or guaranteed by any government sovereign, ruler, commissioner, public body or authority. The Registered Office of the Company is situated at Vinayak Apartment, Flat No. 10, 2 nd


Name Designation Mr. Prafulla Vinayak Shirgaokar Director Mr. Sohan Sanjeev Shirgaokar Director Smt. Smita Prafulla Shirgaokar Director


EQUITY SHAREHOLDERS



shares 1 Shri Prafulla Vinayak Shirgaokar. 101 1.09 2 Shri Rajendra Vinayak Shirgaokar. 1 0.01 3 Mrs. Smita Prafulla Shirgaokar. 793 8.54 4 Shri Prafulla Vinayak Shirgaokar. ( H.U.F. ) 1864 20.07 5 Shri Prafulla Vinayak Shirgaokar & Mrs. Smita Prafulla Shirgaokar. 2998 32.28 6 Mrs. Smita Prafulla Shirgaokar & Shri Prafulla Vinayak Shirgaokar. 3531 38.02




shares 1 Shri Prafulla Vinayak Shirgaokar. 1485 18.75 ( H.U.F. ) 2 Shri Prafulla Vinayak Shirgaokar & Mrs. Smita Prafulla Shirgaokar. 5088 64.24 3 Mrs. Smita Prafulla Shirgaokar & Shri Prafulla Vinayak Shirgaokar. 1347 17.01 TOTAL 7920 100.00

125


As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 17,20,800 17,20,800 17,20,800 17,20,800 17,20,800 10,90,100 Reserves and Surplus 29,63,274 30,21,905 22,91,035 20,70,477 19,02,065 18,06,085 Total Income 1,33,197 9,22,209 4,32,041 3,58,316 2,12,967 3,00,794 Profit/(Loss) after Tax (58,630) 7,30,870 2,20,558 2,89,261 95,980 2,12,423 Earnings per Share(Rs)

(10) 75 20 28 7 22

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 4] MOHAN SHIRGAOKAR INVESTMENTS PVT. LTD. Mohan Shirgaokar Investments Private Limited was incorporated on 16 th June, 1993. The Company was incorporated to carry out the business of an investment company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, bonds, notes, obligations and securities issued or guaranteed by any company, wherever incorporated or carrying on business and debentures, bonds, notes, obligations and securities issued or guaranteed by any government sovereign, ruler, commissioner, public body or authority. The Registered Office of the Company is situated at Vinayak Apartment, Flat No. 10, 2 nd


Name Designation Mr. Prafulla Vinayak Shirgaokar Director Mr. Shishir Suresh Shirgaokar Director Mr. Sanat Kumar Shirgaokar Director Smt. Kalpana Mohan Shirgaokar Director Mrs. Tarini Sanat Shirgaokar Director


EQUITY SHAREHOLDERS



shares 1 Smt. Kalpna Mohan Shirgaokar & 19167 60.80

Shri. Sanat Kumar Shirgaokar & Mrs. Tarini Sanat Shirgaokar. 2 Smt. Kalpna Mohan Shirgaokar & 12312 39.05 Mrs. Tarini Sanat Shirgaokar &

Shri. Sanat Kumar Shirgaokar 3 Shri. Sanat Kumar Shirgaokar & 48 0.15 Mrs. Tarini Sanat Shirgaokar

TOTAL 31527 100.00

PREFERENCE SHAREHOLDERS



shares 1 Smt. Kalpna Mohan Shirgaokar & Shri. Sanat Kumar Shirgaokar & 8196 71.27

Mrs. Tarini Sanat Shirgaokar. 2 Smt. Kalpna Mohan Shirgaokar & Mrs. Tarini Sanat Shirgaokar & 3304 28.73

Shri. Sanat Kumar Shirgaokar

126

TOTAL 11500 100.00 3. Brief Financial Results of the Company is as under:

As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 43,02,700 43,02,700 43,02,700 43,02,700 43,02,700 27,28,500 Reserves and Surplus

85,60,343 83,90,380 65,38,955 58,73,689 52,92,339 49,06,259

Total Income 5,45,112 21,89,387 10,23,509 9,48,470 7,25,361 8,29,084 Profit/(Loss) after Tax

1,69,963 18,51,426 6,65,266 7,05,699 3,86,079 5,38,313


4 57 20 21 11 21

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 5] D.M. SHIRGAOKAR INVESTMENTS PVT. LTD. D.M. Shirgaokar Investments Private Limited was incorporated on 9 th November, 1987. The Company was incorporated to carry out the business of an investment company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, bonds, notes, obligations and securities issued or guaranteed by any company, wherever incorporated or carrying on business and debentures, bonds, notes, obligations and securities issued or guaranteed by any government sovereign, ruler, commissioner, public body or authority. The Registered Office of the Company is situated at Vinayak Apartment, Flat No. 10, 2 nd


Name Designation Mr. Prafulla Vinayak Shirgaokar Director Mr. Shishir Suresh Shirgaokar Director Mr. Sanat Kumar Shirgaokar Director


EQUITY SHAREHOLDERS

Sr. Name of Shareholder No. of


shares No. Shares 1 M/s. S. B. Reshellers Pvt. Ltd. 427 2.17 2 Vinayak Shirgaokar Investments Pvt. Ltd. 2750 13.98 3 Suresh Shirgaokar Investments Pvt. Ltd. 2750 13.98 4 Prabhakar Shirgaokar Investments 2750 13.98 5 Mohan Shirgaokar Investments Pvt. Ltd 2750 13.98 6 Prafulla Shirgaokar Investments Pvt. Ltd. 2750 13.98 7 Shishir Shirgaokar Investments Pvt. Ltd. 2750 13.98 8 Sanjiv Shirgaokar Investments 2750 13.98 TOTAL 19677 100.00

The Directors of the Company does not hold any shares in the company 3. Brief Financial Results of the Company is as under:

As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 19,67,700 19,67,700 19,67,700 19,67,700 19,67,700 21,41,700 Reserves and Surplus 65,46,409 64,77,765 41,81,604 37,75,742 35,70,900 33,35,111 Total Income 2,26,600 24,32,359 5,61,847 5,87,428 4,94,762 5,66,421 Profit/(Loss) after Tax 68,644 22,96,161 4,05,862 4,29,209 2,35,790 3,57,567 Earnings per Share(Rs)

3 117 21 22 12 18

127

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 6] VINAYAK SHIRGAOKAR INVESTMENTS PVT. LTD. Vinayak Shirgaokar Investments Private Limited was incorporated on 10 th November, 1987. The Company was incorporated to carry out the business of an investment company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, bonds, notes, obligations and securities issued or guaranteed by any company, wherever incorporated or carrying on business and debentures, bonds, notes, obligations and securities issued or guaranteed by any government sovereign, ruler, commissioner, public body or authority. The Registered Office of the Company is situated at Vinayak Apartment, Flat No. 10, 2 nd


Name Designation Mr. Prafulla Vinayak Shirgaokar Director Mr. Sachin Rajendra Shirgaokar Director Mr. Chandan Sanjeev Shirgaokar Director Smt. Laxmi Sachin Shirgaokar Director


EQUITY SHAREHOLDERS

Sr. No

Name of Shareholder Number of shares


shares 1 Mrs. Laxmi Sachin Shirgaokar. 1991 8.40 2 Mrs. Laxmi Sachin Shirgaokar & Shri Sachin Rajendra Shirgaokar. 5819 24.55 3 Shri Sachin Rajendra Shirgaokar & Mrs. Laxmi Sachin Shirgaokar. 9122 38.49 4 Shri Prafulla Vinayak Shirgaokar & Mrs. Smita Prafulla Shirgaokar. 300 1.27 5 Mrs. Smita Prafulla Shirgaokar & Shri Prafulla Vinayak Shirgaokar. 385 1.62 6 Vinayak Sitaram Shirgaokar ( H.U.F.) 4268 18.01 7 Mr. Sachin Rajendra Shirgaokar ( Trustee of Sachin Rajendra Shirgaokar 1815 7.66 Trust.)


Sr. No



shares 1 Rajendra Vinayak Shirgaokar ( H.U.F.) 50 0.65 2 Vinayak Sitaram Shirgaokar ( H.U.F.) 1064 13.83 3 Shri Sachin Rajendra Shirgaokar & Mrs. Laxmi Sachin Shirgaokar 662 8.61 4 Mrs. Laxmi Sachin Shirgaokar & Shri Sachin Rajendra Shirgaokar. 2816 36.61 5 Mr. Sachin Rajendra Shirgaokar ( Trustee of Sachin Rajendra Shirgaokar 3100 40.30

Trust.) TOTAL 7692 100.00

128


As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 31,39,200 31,39,200 31,39,200 31,39,200 31,39,200 25,74,100 Reserves and Surplus 1,12,38,351 109,37,639 83,42,785 76,51,096 70,93,923 66,72,793 Total Income 6,52,814 29,20,960 10,47,985 9,18,792 7,70,640 8,99,233 Profit/(Loss) after Tax 3,00,712 25,94,853 6,91,689 6,73,328 4,21,129 5,66,716 Earnings per Share(Rs)

11 108 28 27 16 24

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 7] SURESH SHIRGAOKAR INVESTMENTS PVT. LTD. Suresh Shirgaokar Investments Private Limited was incorporated on 10 th November, 1987. The Company was incorporated to carry out the business of an investment company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, bonds, notes, obligations and securities issued or guaranteed by any company, wherever incorporated or carrying on business and debentures, bonds, notes, obligations and securities issued or guaranteed by any government sovereign, ruler, commissioner, public body or authority. The Registered Office of the Company is situated at Vinayak Apartment, Flat No. 10, 2 nd


Name Designation Mr. Rajendra Vinayak Shirgaokar Director Mr. Sanat Kumar Shirgaokar Director


EQUITY SHAREHOLDERS

Sr. No



shares 1 Shri Shishir Suresh Shirgaokar & 590 3.78

Shri Niraj Shishir Shirgaokar 2 Smt. Radhika Sanjeev Shirgaokar & 590 3.78 Shri Chandan Sanjeev Shirgaokar

Shri Sohan Sanjeev Shirgaokar 3 Shri Shishir Suresh Shirgaokar. ( Karta of Shishir Suresh Shirgaokar 3531 22.63 H.U.F.) & Shri Niraj Shishir Shirgaokar 4 Shri Chandan Sanjeev Shirgaokar. ( Karta of Sanjeev Suresh Shirgaokar 3531 22.63 H.U.F.) & Shri Sohan Sanjeev Shirgaokar 5 Shishir Shirgaokar Investments Pvt. Ltd. 3682 23.59 6 Sanjiv Shirgaokar Investments Pvt. Ltd. 3682 23.59

TOTAL 15606 100.00


Sr. No



shares 1 Shri Shishir Suresh Shirgaokar. ( Karta of Shishir Suresh Shirgaokar 1373 21.75

129

H.U.F.) & Shri Niraj Shishir Shirgaokar 2 Shri Chandan Sanjeev Shirgaokar. ( Karta of Sanjeev Suresh Shirgaokar 1373 21.75 H.U.F.) & Shri Sohan Sanjeev Shirgaokar 3 Shishir Shirgaokar Investments Pvt. Ltd. 1783 28.25 4 Sanjiv Shirgaokar Investments Pvt. Ltd. 1783 28.25 TOTAL 6312 100.00

The Directors of the Company does not hold any shares in the company 3. Brief Financial Results of the Company is as under: As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 21,91,800 21,91,800 21,91,800 21,91,800 21,91,800 18,20,500 Reserves and Surplus 59,14,071 58,07,560 43,46,657 40,63,842 38,66,115 36,18,245 Total Income 2,73,543 16,11,296 5,08,510 4,62,724 4,89,843 5,27,653 Profit/(Loss) after Tax 1,06,511 14,60,904 2,82,814 3,15,490 2,47,870 3,33,292 Earnings per Share(Rs) 5 92 17 19 14 21 There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 8] PRABHAKAR SHIRGAOKAR INVESTMENTS PVT. LTD. Prabhakar Shirgaokar Investments Private Limited was incorporated on 18th January, 1988. The Company was incorporated to carry out the business of an investment company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, bonds, notes, obligations and securities issued or guaranteed by any company, wherever incorporated or carrying on business and debentures, bonds, notes, obligations and securities issued or guaranteed by any government sovereign, ruler, commissioner, public body or authority. The Registered Office of the Company is situated at Vinayak Apartment, Flat No. 10, 2 nd


Name Designation Mr. Prafulla Vinayak Shirgaokar Director Mr. Shishir Suresh Shirgaokar Director Mr. Sanat Kumar Shirgaokar Director Mr. Kunda Kumar Shirgaokar Director


EQUITY SHAREHOLDERS Sr. Name of Shareholder No. of

No. Shares


shares 1 Mrs. Kunda Kumar Shirgaokar. 2156 19.15 2 Shri Sanat Kumar Shirgaokar. 1098 9.75 3 Mrs. Tarini Sanat Shirgaokar. 997 8.85 4 Mrs. Kunda Kumar Shirgaokar & Shri. Sanat Kumar Shirgaokar & 5424 48.17

Mrs. Tarini Sanat Shirgaokar. 5 Sanat Kumar Shirgaokar ( Karta of Kumar Prabhakar Shirgaokar H.U.F) & 1585 14.08 Mrs. Tarini Sanat Shirgaokar.

TOTAL 11260 100.00

130

3. Brief Financial Results of the Company is as under: As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 11,26,000 11,26,000 11,26,000 11,26,000 11,26,000 11,26,000 Reserves and Surplus 72,68,263 72,94,150 54,49,076 49,84,400 45,92,423 45,29,177 Total Income 1,69,687 20,39,958 6,78,125 5,80,267 1,86,093 3,40,041 Profit/(Loss) after Tax (25,886) 18,45,074 4,64,675 5,07,530 63,246 2,51,955 Earnings per Share(Rs) (2) 164 41 45 6 22

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 9] UGAR PIPE INDUSTRIES PVT. LTD. Ugar Pipe Industries Private Limited was incorporate on September 13 th, 1989 with its Registered Office at Vinayak Apartment, Flat No.1, 2 nd Floor, Nagraj Colony, SANGLI, Maharashtra-416 415. The objects of the company are to carry on the business as manufacturers, producers, traders, exporters of all types of pipes, poles, fittings and all other articles, made out of all types and kinds of cement. 1. The Present Directors of the Company are as under:

Name Designation Mr. Prafulla Vinayak Shirgaokar Director Mr. Shishir Suresh Shirgaokar Director Mr. Chandan S Shirgaokar Director

2. Shareholding pattern as on 31st March, 2008

Equity Shareholders Sr. No.

Name of the shareholder

Number of shares


shares

1 D. M. Shirgaokar Investments Pvt. Ltd 100 20.00 2 Smt. Kalpana Mohan Shirgaokar & 50 10.00

Shri. Sanat K. Shirgaokar Smt. Tarini Sanat Shirgaokar

3 Smt. Laxmi Sachin Shirgaokar 60 12.00 4 Smt. Kunda Kumar Shirgaokar 30 6.00 5 Smt. Savita Shishir Shirgaokar 60 12.00 6 Smt. Smita Prafulla Shirgaokar 60 12.00 7 Smt. Radhika Sanjeev Shirgaokar 100 20.00 8 Smt. Tarini Sanat Shirgaokar 30 6.00 9 Shishir Sirgaokar Investment Pvt. Ltd 5 1.00

10 Sanjeev Sirgaokar Investment Pvt. Ltd 5 1.00

Total 500 100.00

REDEEMABLE NON-CUMULATIVE PREFERENCE SHARES

Sr. No



shares 1 D. M. Shirgaokar Investments Pvt. Ltd 120 19.35 2 Smt. Kalpana Mohan Shirgaokar & 60 9.68

Shri. Sanat K. Shirgaokar 0.00 Smt. Tarini Sanat Shirgaokar 0.00

3 Smt. Laxmi Sachin Shirgaokar 75 12.10 4 Smt. Kunda Kumar Shirgaokar 37 5.97 5 Smt. Savita Shishir Shirgaokar 75 12.10

131

6 Smt. Smita Prafulla Shirgaokar 75 12.10 7 Smt. Radhika Sanjeev Shirgaokar 125 20.16 8 Smt. Tarini Sanat Shirgaokar 38 6.13 9 Shishir Sirgaokar Investment Pvt. Ltd 7 1.13

10 Sanjeev Sirgaokar Investment Pvt. Ltd 8 1.29 Total 620 100.00


As on 31st March 2007 2006 2005 2004 2003 Share Capital 1,12,000 1,12,000 1,12,000 1,12,000 1,12,000 Reserves and Surplus 00 44,235 41,570 46,496 00 Total Income 97,176 5,20,767 4,90,683 14,31,336 1,86,911 Profit/(Loss) after Tax (1,15,459) 2,665 (4,926) 1,15,915 (70,784) Earnings per Share Rs (235.88) 0.37 (14.81) 227 (147)

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 10] SHANTARAM MACHINERIES PVT.LTD. Shantaram Machineries Pvt. Ltd. was originally incorporated as Shantaram Reshellers Private Limited.on 18 th

December, 1981. Subsequently it obtained fresh certificate of incorporation consequent on change of name on 3rd May, 2005. The Company is presently engaged in reshelling sugar mill rollers, machine shop, steel fabrication and dealings in forgings and castings of ferrous and non-ferrous materials for any industry. Further it carry business of iron founders, manufacture of agriculture implements and other machineries. The registered office of the Company is at Plot No.C-16, MIDC Gokulshirgaon, Kolhapur-416 234. 1. The Present Directors of the Company are as under:

Name Designation Mr. Prafulla Vinayak Shirgaokar Director Mr. Shishir Suresh Shirgaokar Director Mr. Sachin R Shirgaokar Executive Director

2. Shareholding Pattern as on 31st March, 2008 Sr. No. Name of the shareholder

Number of shares

Shares as a %age of

total number of shares

1 Mrs. Kalpana M. Shirgaokar 2130 8.08 2 Mr. Prafulla V. Shirgaokar 455 1.73

Mrs. Smita P. Shirgaokar 3 Jeevn Vasant Shirgaokar 150 0.57 4 Mrs. Smita P. Shirgaokar 200 0.76

Mr. Prafulla V. Shirgaokar 5 Mrs. Kunda Kumar Shirgaokar 200 0.76 6 Mrs. Savita S. Shirgaokar 230 0.87 7 Mr.Shishir S. Shirgaokar 800 3.04

Mrs. Savita S. Shirgaokar (Trustee of Niraj Shishir Shirgaokar Trust)

8 Mrs. Radhika S. Shirgaokar 550 2.09 Mr. Chandan S. Shirgaokar (Trustee of Chandan Sanjeev Shirgaokar Trust)

9 Mr.Rajendra V. Shirgaokar 520 1.97

132

Mr. Prafulla V. Shirgaokar

Shishir S. Shirgaokar (Trustee of Shirgaokar Family Trust)

10 Mrs. Laxmi S. Shirgaokar 220 0.83 11 Prafulla V. Shirgaokar 1563 5.93

Shirgaokar Sachin Rajendra HUF 12 Vinayak Shirgaokar Investments Pvt.Ltd. 1715 6.51 13 Suresh Shirgaokar Investments Pvt.Ltd. 468 1.78 14 Prabhakar Shirgaokar Investments Pvt.Ltd. 1955 7.42 15 D.M. Shirgaokar Investments Pvt.Ltd 2425 9.20 16 Shishir Shirgaokar Investments Pvt.Ltd. 1740 6.60 17 Prafulla Shirgaokar Investments Pvt.Ltd. 832 3.16 18 Mohan Shirgaokar Investments Pvt.Ltd. 1545 5.86 19 Mr. Anant S. Huilgol 500 1.90

Mr. Sandeep A. Huilgol 20 Mr. Jeevn V. Shirgaokar 500 1.90

Mrs. Anuja J. Shirgaokar 21 Mr. Gajanan R. Ambapkar 75 0.28

Mrs. Saroj G. Ambapkar 22 Mr. Yashwant B. Kasote 75 0.28

Mrs. Vasudha Y. Kasote 23 Mr. Abhijeet G. Joshi 75 0.28

Mrs. Anagha A. Joshi 24 Mr. Yogesh S. Deshpande 75 0.28

Mrs. Lata S. Deshpande 25 Mrs. Laxmi Sachin Shirgaokar 455 1.73

Mr. Sachin R.. Shirgaokar 26 Mrs. Alaknanda M. Kulkarni 500 1.90

Ms Krishnaji K. Mukund 27 Sanjeev Shirgaokar Investments Pvt.Ltd. 1990 7.55 28 Mrs. Kunda Kumar Shirgaokar 270 1.02

Mr. Santat Kumar Shirgaokar 29 Mr.Shishir S. Shirgaokar 265 1.01

Mr. Niraj S. Shirgaokar 30 Mrs. Radhika S. Shirgaokar 513 1.95

Mr. Chandan S. Shirgaokar 31 Mrs. Radhika S. Shirgaokar 512 1.94

Mr. Sohan S. shirgaokar 32 Mr. Shishir S. Shirgaokar 781 2.96

Shishir Shirgaokar Investments Pvt. Ltd 33 Mrs. Radhika S. Shirgaokar 781 2.96

Sanjeev Shirgaokar Investments Pvt.Ltd. 34 Mr.Sanat Kumar Shirgaokar 625 2.37

(Karta Kumar Prabhakar Shirgaokar HUF) 35 Mr. Sachin R. Shirgaokar 660 2.50

(Trustee of Sachin Rajendra Shirgaokar Trust) Total 26,350 100.00

133


As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 26,35,000 2635,000 26,35,000 26,35,000 26,35,000 26,35,000 Reserves and Surplus 2,86,25,381 1,82,99,128 91,20,121 81,92,160 85,68,004 99,01,762 Total Income 14,40,42,241 17,32,40,834 603,12,249 4,53,25,189 2,48,53,656 2,46,12,796 Profit/(Loss) after Tax 1,02,70,613 1,06,81,286 21,29,784 (3,75,843) (13,33,758) 2,42,583 Earnings per Share (Rs) 389.78 405.36 80.83 (14.26) (50.62) 9

Litigations – Please refer on page no 168 under the head Outstanding Litigations Except these pending litigations there are no pending litigations/ disputes or suits by/against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 11] UGAR THEATRES PVT. LTD. Ugar Theatres Private Limited is incorporated on 29th November, 1977, is in the business of producing, distributing, dealing, for cinematographic films of all kinds and description and to purchase, take on lease, acquire Studios, Cinema Halls, Theatre Halls, Drama Halls, and Entertainment Halls for the purpose of carrying on the business. The Registered Office of the company is at Chaitanya Chitramandir, Ugarkhurd-591 316. 1. The Present Directors of the Company are as under: Name Designation Mr. Nivrutti Dyandev Jadhav Chairman Mr. Prafulla Vinayak Shirgaokar Director Mr. Suresh B. Shah Director Mr. Raghunath P Tagare Director 2. Shareholding pattern as on 31st March, 2008

Sr. No.


Number of shares


shares 1 Shirgaokar Prafulla Vinayak 1 0.04

2 Jadhav Nivrutti Dnyandeo 1 0.04

3 Tagare Raghunath Pandurang 1 0.04

4 Shirgaokar Rajendra Vinayak 50 2.20

5 Akkiwate Bhujabali Narasappa 50 2.20

6 Akkiwate Dharmanna Narasappa 50 2.20

7 Khot Satyappa Babaji 50 2.20

8 Hongal Shivmurti Shivrudrappa 50 2.20

9 Chaphalkar Arvind Damodar 50 2.20

10 Chaphalkar Dnyanadas Damodar 50 2.20

11 Kothari Prakash Umedchand 50 2.20

12 Kothari Kantilal Hirachand 50 2.20

13 Sangoram Dasopant Alias Nitin Venkatesh 50 2.20

14 Sangoram Raghavendra Alias Prasad Venkatesh 50 2.20

15 Nidgunde Rayappa Lagamanna 50 2.20

16 Nidgunde Tamanna Lagamanna 50 2.20

134

17 Kusnale Dharmarao Prakash 50 2.20

18 Desai Rachappa Mallappa 50 2.20

19 Desai Mallappa Rachappa 50 2.20

20 Desai Basavraj Rachappa 50 2.20

21 Sarnaik Chinnadevi Rajatkumar 50 2.20

22 Mate Damodar Vyankatesh 50 2.20

23 Mate Anant Nilkhanth 75 3.30

24 Chougule Appasaheb Mallappa 100 4.40

25 Desai Chandrashekhar Siddappa 100 4.40

26 Shirgaokar Rajendra Vinayak 100 4.40

27 Shaha Deepchand Bhalchandra 200 8.80

28 The Ugar Sugar Works Limited 746 32.81

TOTAL 2,274 100

3. Brief Financial Results of the Company is as under: As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 227,400 2,27,400 2,27,400 2,27,400 2,27,400 2,27,400 Reserves and Surplus 0 0 0 0 0 0 Total Income 1,18,468 62,627 2,42,698 51,649 7,59,460 8,85,653 Profit/(Loss) after Tax 38,618 21,384 19,9681 (3,67,955) (3,11,944) (1,36,552) Earnings per Share(Rs) 16.98 9.4 87.81 (161.81) (137.18) (60 There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 12] S. B. RESHELLARS PRIVATE LIMITED S B Reshellers Pvt Ltd was incorporated on 24th February,1978. This company was amalgamated with The Shirgaonkar Industries Private Limited(incorporated on 13th April, 1949) pursuant to order of High Court of Mumbai dated 9th September, 1999. Subsequently the amalgamated entity changed its name to S.B. Reshellers Private Limited and obtained fresh certificate of incorporation on 28th March, 2000. S B Reshellers Pvt Ltd is in the business of reshelling of sugar mills, rollers, machine shop steel fabrication, designing manufacturing, developing, improving, hiring, repairing, buying, selling and dealing in foreign and casting of ferrous and non-ferrous materials or in any way for any industry whatsoever, including chilled and malleable castings, special alloy castings, gunmetal casting, grayron casting, steel casting, gunmetal, copper, brass and aluminum castings and foundry work and all other ancillary work. The Registered Office of the company is at 392, E-ward, Shahupuri, Post Box no-201, Kolhapur – 416 001. 1. The Present Directors of the Company are as under: Name Designation Mr. Rajendra V Shirgaokar Chairman Mr. Prafulla Vinayak Shirgaokar Director Mr. Sachin R Shirgaokar Director Mr. Sanat K Shirgaokar Director Mr. Anant S Huilgol Director Mr. Jeevan V Shirgaokar Director Mr. Chandan S Shirgaokar Director Mr. Niraj S Shirgaokar Director

135


Sr No Name of Shareholders

No of Shares held


shares

1 Rajendra V. Shirgaokar 45 0.02 2 Prafulla V. Shirgaokar & Smita P. Shirgaokar 2566 1.18 3 Smita P. Shirgaokar 2145 0.99 4 Radhika S. Shirgaokar 2219 1.02 5 Shishir S. Shirgaokar & Savita S. Shirgaokar 824 0.38 6 Savita S. Shirgaokar 1979 0.91 7 Kunda K. Shirgaokar 1171 0.54 8 Jeevan V. Shirgaokar 2117 0.97 9 Anant S Huilgol & Asha A. Huilgol 5000 2.30

10 Mukund K Kulkarni & Alakananda M Kulkarni 1680 0.77 11 Sachin R. Shirgaokar 952 0.44 12 Prabhakar Shirgaokar Inv. Pvt. Ltd 18952 8.73 13 Suresh Shirgaokar Inv. Pvt. Ltd 16282 7.50 14 Vinayak Shirgaokar Inv. Pvt. Ltd 28791 13.26 15 D. M. Shirgaokar Inv. Pvt. Ltd 27495 12.66 16 Ratnakar D. Tagare 448 0.21 17 Prafulla Shirgaokar Inv. Pvt. Ltd 5124 2.36 18 Mohan. Shirgaokar Inv. Pvt. Ltd 17184 7.91 19 Shishir. Shirgaokar Inv. Pvt. Ltd 8032 3.70 20 Sanjeev Shirgaokar Inv. Pvt. Ltd 7161 3.30 21 Laxmi S. Shirgaokar 2049 0.94 22 Prafulla V. Shirgaokar & Sachin R. Shirgaokar 616 0.28 23 Sachin R. Shirgaokar & Laxmi S. Shirgaokar 3538 1.63 24 Niraj S. Shirgaokar & Shishir S. Shirgaokar 310 0.14 25 Sanat K Shirgoakr & Tarini S. Shirgaokar 310 0.14 26 Ugar Pipe Industries Pvt. Ltd. 150 0.07

27 Kalpana M. Shirgaokar & Tarini S. Shirgaokar & Sanat K. Shirgaokar 8285

3.81

28 Prafulla Shirgaokar (HUF) 300 0.14 29 Rajendra V. Shirgaokar (Trustee of Shirgaokar Family) 1300 0.60

30 Rajendra V. Shirgaokar (Trustee of Sachin Shirgaokar Trust) 3630 1.67

31 Shishir S. Shirgaokar( Trustee of Niraj Shirgaokar) 3220 1.48

32 Radhika S. Shirgaokar & Chandan S. Shirgaokar (Trustee of Chandan Shirgaokar Trust) 2490

1.15

33 Kunda K. Shirgaokar & Sanat K Shirgaokar (Trustee of Sanat K. Shirgaokar) 1920

0.88

34 Asha A. Huilgol & Sandeep A. Huilgol 1456 0.67 35 Shradha D. Shirgaokar 10 0.00 36 Prafulla V Shirgaokar 45 0.02 37 Shishir S. Shirgaokar 29 0.01 38 Anant S Huilgol & Asha A. Huilgol & Namita S. Huilgol 40 0.01 39 D. M. Shirgaokar & Shradha D. Shirgaokar 110 0.05 40 Shishir S. Shirgaokar & Shishir Shirgaokar Inv. Pvt. Ltd. 1680 0.77 41 Radhika S. Shirgaokar & Chandan S. Shirgaokar 592 0.27 42 Radhika S. Shirgaokar & Sohan S. Shirgaokar 591 0.27 43 Kunda K. Shirgaokar & Sanat K Shirgaokar 4190 1.93

44 Rajendra V. Shirgaokar (Karta of R. V. Shirgaokar HUF) & Sachin R. Shirgaokar 4219

1.94

136

45 Prafulla V. Shirgaokar (Karta of P. V. Shirgaokar HUF) & Smita P. Shirgaokar 4219

1.94

46 Shishir S. Shirgaokar (Karta of S. S.Shirgaokar HUF) & Niraj Shirgaokar 4259

1.96

47 Chandan S. Shirgaokar (Karta of Sanjeev S. Shirgaokar HUF) & Sohan Shirgaokar 4258

1.96

48 Sanat K Shirgoakr (Karta of Kumar P. Shirgaokar HUF) & Tarini S. Shirgaokar 3375

1.55

49 Kalpana M. Shirgaokar & Tarini S. Shirgaokar & Sanat K. Shirgaokar 9814

4.52

Total 217,172 100

3. Brief Financial Results of the Company is as under: As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 2,17,17,200 2,17,17,200 2,17,17,200 2,17,17,200 2,17,17,200 2,17,17,200 Reserves and Surplus

8,62,47,038 6,52,86,445 3,65,20,304 3,10,87,110 2,49,21,433 2,95,98,387

Total Income 62,21,21,866 46,77,31,813 31,32,31,616 2,13,98,39,33 14,62,30,338 20,39,19,782 Profit/(Loss) after Tax

3,06,77,238 3,74,33,204 1,16,23,954 61,65,677 (4676954) 10,87,414


141.26 172.37 53.52 28.39 (21.54) 5.01

Litigations – Please refer on page no 168 under the head Outstanding Litigations Except these pending litigations there are no pending litigations/ disputes or suits by/against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 13] UGAR CONSULTANCY LIMITED (Erstwile UGAR POWER GENERATION & CONSULTANCY SERVICES LTD. ) Ugar Power Generation & Consultancy Services Ltd was incorporated on Tenth day of November, 1987 under the Companies Act, 1956 and under the name Ugar Kenply Industries Limited. The name of the Company was changed from Ugar Kenply Industries Limited to Ugar Power Generation & Consultancy Services Ltd on Tenth day of December, 2001 and further name changed to Ugar Consultancy Limited w.e.f 31.12.2007. The objective of the Company is to provide consultancy in all industrial implementation processes, generate, distribute, supply, sell and employ electricity, all kinds of power and energy out of steam generated in the process or otherwise of manufacturing of sugar and its bye products and also generated from coal and/or any other substances and also from conventional and non-conventional sources. The Registered Office of the company is in the state of Maharashtra. 1. The Present Directors of the Company are as under:

Sr. No

Name of Director

Designation

1 Shri. R. V. Shirgaokar Chairman 2 Shri. P. V. Shirgaokar Director 3 Shri. Shishir S. Shirgaokar Director 4 Shri. Sachin R. Shirgaokar Director 5 Shri. M. G. Joshi Director 6 Dr. M. R. Desai Director 7. Shri. V. Balasubramanian Director

137

2. Shareholding pattern as on 31st March, 2008

Sr. No.


Number of shares


shares

1 SHRI. PRAFULLA VINAYAK SHIRGAOKAR 1010 2.02

MRS. SMITA PRAFULLA SHIRGAOKAR -

2 SHRI. RAJENDRA VINAYAK SHIRGAOKAR 10 0.02

3 SHRI. SHISHIR SURESH SHIRGAOKAR 10 0.02

4 MRS. RADHIKA SANJEEV SHIRGAOKAR 10 0.02

5 SHRI. MANOHAR GOPALRAO JOSHI 510 1.02

6 Dr. M. R. DESAI 1010 2.02

7 SHRI. MADHUSUDAN BALKRISHNA KARMARKAR 210 0.42

MRS. MEGHANA MADUSUDHAN KARMARKAR -

8 THE UGAR SUGAR WORKS LIMITED. 24300 48.53

9 SHRI. VILAS CHINTAMAN SATTIKAR 100 0.20

10 SHRI. JAIPAL APPU SANGLE 100 0.20

11 SHRI. SADASHIV PANDURANG PATIL 100 0.20

12 SHRI. MARUTI SHAMRAO KHOT 100 0.20

SHRI. SHANKER MARUTI KHOT -

13 MRS. REKHA SHIDRAI BHANDARE 200 0.40

14 SHRI. MARUTI SHANKAR KAGE 100 0.20

MRS. KALPANA MARUTI KAGE -

15 SHRI. GOUSLAJAM MOHAMAD SUTAR 100 0.20

16 SHRI. S. M. PATTANSHETTI 100 0.20

MRS. L. S. PATTANSHETTI -

17 SHRI. SADASHIV RAMU KUMBHAR 300 0.60

MRS. REKHA SADASHIV KUMBHAR -

18 SHRI. SADASHIV RAMU KUMBHAR 200 0.40

SHRI. ASHOK RAMU KUMBHAR -

19 SHRI. VINAYAK PARSHURAM BHANDARE 100 0.20

20 SHRI. SURENDRA SHIVMURTI ARAGE 100 0.20

MRS. SUNITA SURENRA ARAGE -

21 SHRI. PAARGOUDA LAXMAN KATGIRE 100 0.20

22 SHRI. SHANKAR MURGAYYA SWAMI 500 1.00

23 SHRI. APRAI RAMU SARAPURE 100 0.20

MRS. GANGUBAI APRAI SARAPURE -

24 MRS. GANGUBAI APRAI SARAPURE 100 0.20

SHRI. APRAI RAMU SARAPURE -

SHRI. PARSURAM APRAI SARAPURE -

25 MRS. RENU BALKRISHNA KULKARNI 400 0.80

26 SHRI. SHREEDHAR RAJARAM ATHALYE 200 0.40

27 SHRI. ABHIJIT VASANT BHOSALE 100 0.20

138

28 SHRI. VIKRAM VASANT BHOSALE 100 0.20

29 SHRI. UTTAMRAO RAMKRISHNA WAICHAL 100 0.20

30 SHRI. ANAND GANESH NAIK 100 0.20

31 SHRI. PRASAD SIDGOUDA KAGE 2500 4.99

MRS. SONABAI ALGONDA KAGE -

SHRI. ALGONDA BHARMGONDA KAGE -

32 MADAVI RAJEEV DALVI 1000 2.00

RAJEEV VIJAY DALVI -

33 SHRI. SACHIN RAJENDRA SHIRGAOKAR 2000 3.99

MRS. LAXMI SACHIN SHIRGAOKAR -

34 SHRI. SHRIKRISHNA NARHAR INAMDAR 2000 3.99

MRS. LALAKARI SHRIKRISHNA INAMDAR -

35 MRS. SAVITA SHISHIR SHIRGAOKAR 1000 2.00

SHRI. SHISHIR SURESH SHIRGAOKAR -

36 MRS. MEGHANA MALHAR NAIK 500 1.00

37 SHRI. RAJAN VAMANRAO DESURKAR 100 0.20

38 SHRI. V. BALSUBRAMANIAN 500 1.00

39 SHRI. RAGHUNATH PANDURANG TAGARE 200 0.40

40 SHRI. PRAKASH DAMODAR DIVEKAR 200 0.40

41 SHRI. SURESH SHANKARRAO SIRDESAI 300 0.60

42 SHRI. B. N. AKIWATE 200 0.40

43 SHRI. AVINASH VASANTRAO DESHPANDE 200 0.40

44 SHRI. DEEPCHAND BHALCHANDRA SHAH 500 1.00

MANISH DEEPCHAND SHAH -

MAYUR DEEPCHAND SHAH -


CHANDAN SANJEEV SHIRGAOKAR -


SOHAN SANJEEV SHIRGAOKAR -

47 VINAYAK SHIRGAOKAR INVESTMENTS PVT.LTD. 1000 2.00

48 SURESH SHIRGAOKAR INVESTMENTS PVT.LTD., 1000 2.00

49 PRABHAKAR SHIRGAOKAR INVESTMENTS P. LTD., 1000 2.00

50 D. M. SHIRGAOKAR INVESTMENTS PVT. LTD., 1000 2.00

51 PRAFULLA SHIRGAOKAR INVESTMENTS P. LTD., 1000 2.00

52 MOHAN SHIRGAOKAR INVESTMENTS PVT. LTD., 1000 2.00

53 SHISHIR SHIRGAOKAR INVESTMENTS PVT. LTD., 1000 2.00

54 SANJEEV SHIRGAOKAR INVESTMENTS PVT. LTD., 1000 2.00

TOTAL 50,070 100.00

139

3. Brief Financial Results of the Company is as under: As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 500,700 5,00,700 5,00,700 5,00,700 5,00,700 5,00,700 Reserves & Surplus 16,50,029 8,05,000 0 2,31,849 1,99,480 31,297 Total Income 97,26,877 1,02,54,000 27,94,000 19,42,274 23,74,565 5,85,550 Profit/ (Loss) after Tax 10,79,452 12,02,000 (4,83,000) 8,9462 2,24,796 88,884 Earning per share (Rs.) 21.56 24.02 (9.65) 1.79 4.49 2.22 There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 14] TARA TILES PVT. LTD. Tara Tiles Pvt. Ltd. was incorporated on 11th July, 1989 under the Companies Act, 1956. The company’s main object is to carry on business of manufacturers of and to produce, process, prepare, sell and deal in tiles of all kinds whether for building purpose or decorative purpose. The other products of the company are Ceramic wares, asbestos products, cement products, gypsum products, fire bricks, terracotta blocks and domestic sanitary wares. The Registered Office of the Company is located at 392 E, Shahupuri, Kolhapur-416 001. 1. The Present Directors of the Company are as under:

Name Designation Mr. Shishir Suresh Shirgaokar Director Mr. Prafulla Vinayak Shirgaokar Director Mr. Sachin Rajendra Shirgaokar Director Mr. Sanat Kumar Shirgaokar Director Mr. Avinash Vasant Shirgaokar Managing Director

2. Shareholding Pattern as on 31st March, 2008

Sr. No.

Name Nos of Equity Sh


number of shares

Nos of Preference

Sh

Shares as a

%age of total

number of shares

1 Shirgaokar Mrs. Savita Shishir 170 1.66 19 0.08 2 Shirgaokar Mrs. Radhika Sanjeev 170 1.66 19 0.08 3 Shirgaokar Mrs.Smita Prafulla 170 1.66 19 0.08 4 Shirgaokar Mrs. Kunda kumar 383 3.75 43 0.19 5 Shirgaokar Sachin Rajendra 382 3.74 42 0.19 6 S. B. Reshellers Pvt. Ltd. (Hotel) 405 3.96 45 0.20 7 Shirgaokar Mrs. Sukhada Avinash 748 7.32 83 0.37 8 Deshpande Atul Shrinivas 749 7.33 83 0.37 9 Shirgaokar Mrs. Laxmi Sachin 340 3.33 43 0.19 10 S. B. Reshellers Pvt. Ltd. 4000 39.15 3000 13.33 11 Vinayak Shirgaokar Investment Pvt. Ltd. 10 0.10 2054 9.13 12 D. M.Shirgaokar Investment Pvt. Ltd. 52 0.51 2096 9.32 13 Mohan Shirgaokar Investment Pvt. Ltd. 10 0.10 2054 9.13 14 Suresh Shirgaokar Investment Pvt. Ltd. 10 0.10 2054 9.13 15 Shishir Shirgaokar Investment Pvt. Ltd. 96 0.94 2064 9.17 16 Prafulla Shirgaokar Investment Pvt. Ltd. 10 0.10 2054 9.13 17 Shirgaokar Jeevn Vasant 1000 9.79 634 2.82 Jt. Shirgaokar Mrs. Anuja Jeevan - -

140

18 Shirgaokar Avinash Vasant 1001 9.80 1934 8.60 Jt. Shirgaokar Mrs. Sukhada Avinash 19 Shirgaokar Mrs. Laxmi Sachin 43 0.42 0 - 20 Sanjiv Shirgaokar Investment Pvt. Ltd. 86 0.84 2063 9.17 21 Smt. Shirgaokar Kalpana Mohan 340 3.33 43 0.19 Shirgaokar Sanat Kumar - - Sou. Shirgaokar Tarini Sanat - - 22 Smt. Shirgaokar Kalpana Mohan 43 0.42 0 - Sou. Shirgaokar Tarini Sanat - - Shirgaokar Sanat Kumar - - 23 Prabhakar Shirgaokar Investment Pvt. Ltd. 0 - 2054 9.13 Total 10,218 100.00 22,500 100.00


As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 32,71,800 32,71,800 32,71,800 32,71,800 15,71,800 15,71,800 Reserves and Surplus 19,57,180 20,74,108 15,51,782 21,01,229 31,74,099 32,66,020 Total Income 80,33,480 89,36,759 68,56,148 62,95,978 77,31,429 76,44,010 Profit/(Loss) after Tax (1,48,909) 5,22,326 (5,49,447) (10,72,870) (91,922) (5,93,127) Earnings per Share(Rs) (23.38) 42.31 (62.58) (209.6) (11) (56)

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 15] SANGLI FABRICATORS PVT. LTD. Sangli Fabricators Pvt. Ltd., was incorporated on 13th September, 1989 with its Registered Office at Vinayak Apartment, Flat No.1, 2 nd Floor, Nagraj Colony, SANGLI, Maharashtra-416 415. The objects of the Company are to carry on business of steel fabrication and to design, develop, manufacture, fabricate, assemble, install, produce, build, buy, sell, import, export, storage system surgical and household, etc. 1. The Present Directors of the Company are as under:

Name Designation Mr. Sachin Rajendra Shirgaokar Director Mr. Shishir Suresh Shirgaokar Director Mr. Chandan S Shirgaokar Director


EQUITY SHAREHOLDERS



shares 1 Mrs. Smita Prafulla Shirgaokar. 62 1.14 2 Mrs. Savita Shishir Shirgaokar. 40 0.73 3 Smt. Kunda Kumar Shirgaokar. 62 1.14 4 Mrs. Smita Prafulla Shirgaokar & Shri Prafulla Vinayak Shirgaokar. 646 11.84 5 Mrs. Savita Shishir Shirgaokar & Shri Shishir Suresh Shirgaokar. 196 3.59 6 Mrs. Laxmi Sachin Shirgaokar &

Shri Sachin Rajendra Shirgaokar. 709 12.99 7 Smt. Kalpna Mohan Shirgaokar & Shri Sanat Kumar Shirgaokar & 709 12.99 Mrs. Tarini Sanat Shirgaokar

141

8 Mrs. Kunda Kumar Shirgaokar & Shri Sanat Kumar Shirgaokar & 646 11.84 Mrs. Tarini Sanat Shirgaokar 9 Mrs. Radhika Sanjeev Shirgaokar. Shri Chandan Sanjeev Shirgaokar 228 4.18

10 Mrs. Radhika Sanjeev Shirgaokar. Shri Sohan Sanjeev Shirgaokar 228 4.18

11 Shishir Shirgaokar Investments Pvt. Ltd. 258 4.73 12 Sanjiv Shirgaokar Investments Pvt. Ltd. 257 4.71 13 D. M. Shirgaokar Investments Pvt. Ltd. 1417 25.96 TOTAL 5458 100.00




shares 1 Mrs. Savita Shishir Shirgaokar. 216 4.14 2 Vinayak Shirgaokar Investments Pvt. Ltd. 740 14.19 3 Suresh Shirgaokar Investments Pvt. Ltd. 710 13.61 4 Prabhakar Shirgaokar Investments Pvt. Ltd. 710 13.61 5 D. M. Shirgaokar Investments Pvt. Ltd 710 13.61 6 Mohan Shirgaokar Investments Pvt. Ltd 710 13.61 7 Prafulla Shirgaokar Investments Pvt. Ltd. 710 13.61 8 Shishir Shirgaokar Investments Pvt. Ltd. 710 13.61 TOTAL 5216 100.00


As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 11,17,400 11,17,400 10,67,400 10,67,400 10,67,400 10,67,400 Reserves and Surplus 00 00 00 00 00 00 Total Income 2,78,982 2,77,338 21,17,651 99,06,278 1,10,22,448 76,20,618 Profit/(Loss) after Tax

(1,01,237) (2,24,833) 9,34,492 (69,174) (3,88,613) (1,90,164)

Earnings per Share Rs.

(18.55) (41.19) 167.39 (16.50) (71) (35)

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 16] TARA FLOORINGS PVT. LTD. Tara Floorings Pvt. Ltd., is incorporated on 23rd March, 1994 under the Companies Act, 1956. The company’s main object is to carry on business of manufacturers of and to produce, treat, process, refine, prepare, export, import, sell and generally deal in all types of mosaic tiles, earthware tiles, clinker tiles, and tiles of all other kinds whether used for building purpose or decoration purpose or for furniture’s or wall structures or partitions of all kinds and descriptions and undertake the activities of manufacture of cement pipes, blocks, Ceramic wares, asbestos products, cement products, gypsum products, fire bricks, terracotta blocks and domestic sanitary wares. The Registered Office of the Company is located at 392 E, Shahupuri, Kolhapur-416 001. 1. The Present Directors of the Company are as under:

Name Designation Mr. Sachin Rajendra Shirgaokar Director Mr. Jeevan Vasant Shirgaokar Director Mr. Avinash Vasant Shirgaokar Director

142

2. Shareholding Pattern as on 31st March, 2008

Sr. No.

Name No of Shares Shares as a %age of total number of

shares 1 R. V. Shirgaokar 30 0.60 2 P. V. Shirgaokar 30 0.60 3 Shishir S. Shirgaokar 30 0.60 4 Radhika S. Shirgaokar 30 0.60 5 Sanat K. Shirgaokar 30 0.60 6 Sachin Shirgaokar 30 0.60 7 Vinayak Shirgaokar Investment Pvt. Ltd. 765 15.28 8 D. M.Shirgaokar Investment Pvt. Ltd. 412 8.23 9 Mohan Shirgaokar Investment Pvt. Ltd. 410 8.19

10 Suresh Shirgaokar Investment Pvt. Ltd. 382 7.63 11 Shishir Shirgaokar Investment Pvt. Ltd. 425 8.49 12 Prafulla Shirgaokar Investment Pvt. Ltd. 383 7.65 13 Prabhakar Shirgaokar Investment Pvt. Ltd. 765 15.28 14 Sanjiv Shirgaokar Investment Pvt. Ltd. 453 9.05 15 Avinash V. Shirgaokar 193 3.85 16 Jeevan V. Shirgaokar 193 3.85 17 Kunda K. Shirgaokar 30 0.60 18 Kalpana M. Shirgaokar 30 0.60

Jt. Sanat K. Shirgaokar, Tarini S. Shirgaokar 0.00 19 Kalpana M. Shirgaokar 386 7.71

Jt. Tarini S. Shirgaokar, Sanat K. Shirgaokar Total 5007 100.00


As on 31st March 2008 2007 2006 2005 2004 2003 Share Capital 500,700 5,00,700 5,00,700 5,00,700 5,00,700 5,00,700 Reserves and Surplus 0 00 00 00 98,338 5,01,450 Total Income 19,84,010 24,74,276 17,67,405 11,57,605 10,67,585 16,86,378 Profit/(Loss) after Tax (2,86,940) 2,34,599 3,63,084 (8,51,159) (4,03,113) (1,69,060) Earnings per Share(Rs) (57.31) 46.85 73 (169.99) (81) (34)

There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 17) SADASHIVA SUGARS LIMITED Sadashiva Sugars Limited is a company promoted by Mr. R.S.Patil, Mr. G.S. Patil, Mr. S.G. Patil, Mr. Rajendra Patil and Mr. M.B.Thimmapur and incorporated as a public limited company on 3rd January 2002. The company was incorporated for the purpose of setting up a sugar manufacturing unit and cogeneration plant. Though the company had during 2003-04 planned setting up a 2500 TCD facility for manufacturing crystal sugar, the project could not achieve financial closure as the Karnataka Power Transmission Corporation was not entering into power purchase agreements for purchase of power from renewable energy projects. With the change in policies, Sadashiva Sugars Ltd decided to set up the project and entered into a Memorandum of Understanding with M/s. Ugar Sugar Works Ltd a public limited company incorporated under the Companies Act 1956, having existing sugar manufacturing units and cogeneration plants, for setting up the project as a joint venture. The project will include a cogeneration plant generating 15 MW of power utilizing bio-mass such as bagasse and other such biological waste.

143

The company has not been carrying on any operation since incorporation. The sugar factory and congeneration project is under implementation and expenses during the Project Implementation have been capiatalized. There are no pending litigations, disputes or suits against this Company and there is no default in meeting any of the Statutory/ Bank/ Institutional Dues. No proceedings have been initiated for economic offences against it and it is not a sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985.. Registered Office : Sadashiva Sugars Limited CIN U15421KA2002PLC029968

27, Sector 63-A Nava Nagar Bagalkot -587102 Karnataka

Factory: Nagral, Nainegali, 7th Kilometer from Almatti Bridge on NH-13, Bagalkot Taluk & District Karnataka State.

List of Directors Sadashiva Sugars Limited

Sr. No Name of Director Status 1 Mr. B. S. Patil Chairman 2 Mr. Shishir S. Shirgaokar Director 3 Dr. M. R. Desai Director 4 Mr. Sanat K. Shirgaokar Executive Director 5 Mr. I. S. Patil Director 6 Mr. R. Patil Director 7 Mr. G. S. Patil Director 8 Mr. R.S. Patil Director

Shareholding pattern as on 31st March, 2008

Sr. No.


Number of shares


shares

1 R.S.Patil 22,000 0.06 2 G.S.Patil 6,000 0.02 3 Rajendra Patil 282,000 0.74 4 B.S.Patil 610,000 1.61 5 Sanathkumar Shirgaonkar 1,000 0.00 6 I.S.Patil 1,001,000 2.64 7 Chandrashekar Yelamali 500 0.00 8 B.S.Patil Representing ABC 2,100,000 5.53 9 Rajendra Patil – HUF 9,035,100 23.81

10 Rekha Patil 700,000 1.84 11 Harish Y 5,000,000 13.18 12 Santhosh Karimattan 238,200 0.63 13 Future Exime (India) P.Ltd 500,000 1.32 14 Ugar Sugar Works Ltd 17,485,400 46.09 15 Mohan Shirgaonkar Investment Pvt Ltd. 200,000 0.53 16 Shishir Shirgaonkar Investment Pvt Ltd. 80,000 0.21 17 Sanjeev Shirgaonkar Investment Pvt Ltd. 80,000 0.21 18 Vinayaka Shirgaonkar Investment Pvt Ltd. 230,000 0.61 19 Suresh Shirgaonkar Investment Pvt Ltd. 80,000 0.21 20 Prabhakar Shirgaonkar Investment Pvt Ltd. 100,000 0.26 21 D.M Shirgaonkar Investment Pvt. Ltd. 150,000 0.40 22 Prafulla Shirgaonkar Investment Pvt. Ltd. 40,000 0.11

Total 37,941,200 100.00

144

Financials of Sadashiva Sugars Limited:

Auditors’ Report

The Board of Directors, Sasashiva Sugars Limited, Nainegali, Bagalkot.

Sir,

1. We have examined and found correct the annexed financial information of Sadashiva Sugars Limited for the financial years ended 31st March,2004, 31st March, 2005, 31st March, 2006, 31st March, 2007 and 31st March, 2008 being the last date to which the accounts of the Company have been made up and audited by us.

2. The said financial information has been drawn up by the Company in accordance with the requirements of paragraph B(1) of Part II of Schedule VI to the Companies Act, 1956 and the Securities and Exchange Board of India (Disclosure and Investor Protections) Guidelines, 2000, as amended from time to time and in accordance with the instructions dated:25th May 2008, received from the Company requesting us to carry out work for the purpose of disclosure in the offer document being issued by M/s. Ugar Sugar Works Limited in connection with its Rights Issue of Equity Shares.

3. We report that:

a. The restated profits of the Company for the financial years ended 31st March, 2004, 2005, 2006, 2007 and 31st March, 2008 are as set out in Annexure I to this report. These profits have been arrived at after charging all expenses including depreciation and after making such adjustments and regroupings, which in our opinion are appropriate and more fully described in the Significant Accounting Policies and Notes on Accounts appearing in Annexure III to this report.

b. The restated assets and liabilities of the Company as at 31st March, 2004, 2005, 2006, 2007, 31st March, 2008 are as set out in Annexure II to this report after making such adjustments and regroupings as in our opinion are appropriate and more fully described in the Significant Accounting Policies and Notes on Accounts appearing in Annexure III to this report.

c. We have also examined the restated cash flow statement relating to the Company for the years ended 31st March, 2004, 2005, 2006, 2007, 2008 as appearing in Annexure IV to this report.

4. We have also examined the following financial information relating to the Company prepared by the Management for the purpose of inclusion in the offer document:

xiii) Capitalization Statement as at 31st March, 2008 as appearing in Annexure V to this report.

xiv) Statement of Accounting Ratios as appearing in Annexure VI to this report.

xv) Statement of Other Income as appearing in Annexure VII to this report.

xvi) Statement of Loans and Advances as appearing in Annexure VIII to this report.

xvii) Statement of Unsecured Loans as appearing in Annexure IX to this report.

xviii) Statement of Secured Loans as appearing in Annexure X to this report.

xix) Statement of Tax Shelters as appearing in Annexure XI to this report.

xx) Statement of Related Party disclosures as appearing in Annexure XII to this report.

xxi) Statement of Qualifications appearing in the Auditors’ Reports as given in Annexure XIII to this report.

xxii) Changes in Significant Accounting Policies as appearing in Annexure XIV to this report.

This Report is intended solely for your information and for inclusion in the other document in connection with Rights Issue of the Company and is not to be used, referred to or distributed for any other purpose without our written consent.

145

Place: Bangalore

Date :08 Sept’ 2008

For M/s Santhappa & Co., Chartered Accountants A.C.Raju Partner Membership No. 18134

146

Annexure-I

Statement of Profit and Losses as restated (Rs in Lakh)

For the Year Ended Particulars

31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004

Income: - - - - -

Sales - - - - -

Less: Excise Duty - - - - -

Net Sales - - - - -

Increase/(Decrease) in Stock - - - - -

Other Income 19.59 8.37 - - -

Total 19.59 8.37 - - -

Expenditure: Raw Materials Consumed & Purchase of Trading Goods

- - - - -

Manufacturing, Selling and Administrative Expenses

0.28 0.65 0.48 - -

Interest and Finance Charges - - - - -

Depreciation - - - - -

Amortisation - - - - -

Total 0.28 0.65 0.48 - -

Net Profit Before Tax and exceptional items 19.31 7.72 (0.48) - -

Less: Exceptional items - - - - Profit before Tax 19.31 7.72 (0.48) - -

Less: Provision for Taxation - - -

Current Tax 6.30 2.85 Fringe Benefit Tax 1.66 1.26 Deferred Tax 5.66 Net Profit after Tax and exceptional items 5.69 3.61 (0.48) - -

147

Annexure-II

Statement of Assets and Liabilities, as restated (Rs in Lakh)


31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004

A. Fixed Assets: - - - - -

a) Gross Block 204.19 143.84 8.66 - -

Less: Depreciation 18.30 3.13 0.20 - -

Net Block 185.89 140.71 8.46 - -

b) Capital Work in Progress 10,277.60 5,186.55 11.81 - -

Total 10,463.49 5,327.26 20.27 0 0 B. Intangible Assets - - - - -

C. Investments (net) 2.00 - - - -

D. Current Assets, Loans & Advances: - - - - -

a) Inventories 212.13 - - - -

b) Sundry Debtors - - - - -

c) Cash & Bank Balances 336.17 406.18 13.31 2.18

d) Other Current Assets 1,492.72 362.70 29.12 7.95 10.10

e) Loans & Advances 2,144.33 1,015.09 690.91 Total 4,187.35 1,783.97 733.33 10.13 10.10

E. Total Assets (A+B+C+D) 14,650.84 7,111.23 753.60 10.13 10.10

F. Less: Liabilities and Provisions:

a) Secured Loans 8,027.53 4,582.93

b) Unsecured Loans 740.21 5.10 5.10 5.10 5.10


Current Liabilities 1,166.08 380.20 742.26 0.02

Provisions 7.90 3.55 Total Liabilities 9,941.72 4,971.78 747.36 5.12 5.10

G. Net worth before deferred tax liability(E-F) 4,709.12 2,139.45 6.24 5.01 5.00 H. Deferred Tax Liability 5.66

I. Adjusted Net worth (G-H) 4,703.46 2,139.45

J. Net Worth Represented by

1. Share Capital 3,794.12 6.25 6.25 5.00 5.00

2. Reserves & surplus 8.81 3.13

3. Share Application Money 900.53 2,130.08 K. Misc. Expenditure (to the extent not written off)

- - - - -

L. Adjusted Net Worth 4,703.46 2,139.46 6.25 5.00 5.00

148

Annexure III A. Significant Accounting Policies: 1. Basis of Accounting:

The financial statements have been prepared under the historical cost convention and on accrual basis of accounting and in accordence with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act1956

2. Fixed Assets and Depreciation:

i. Fixed assets are stated at their cost of acquisition / construction and include interest and other costs incurred till the asses is put to use.

ii.All assets are depreciated on W.D.V basis as per rate and manner specified in schedule XIV of the Companies Act 1956. In respect of addition / Deletion made during the year depreciation is provided on prorata basis.

B. Other Notes: 1

i. Expenditurew on start up activities and prelimnary expenses incurred in establishing the unit is recognized as an expenses and has been written off to profit and loss Account.

ii. Pre-operative expenditure specifically attributable to construction of project or to the acquisition of fixed asset will be included as part of cost of construction of projects or as a part of the cost of the fixed assets in accordence its business / production.

2 As represented by management there were no amounts due to small scale industrial units as of 31.03.2008.

3 Contingent Liability not provided for:

Rs. In Lakh i As at

Particulars 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004

a. Guarantees issue by bankers 233.00 233.00 0.00 0.00 0.00 Rs. In Lakh ii As at

Particulars

31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004

a.Estimated amounts of contracts remaining to be executed on capital account and not provided for:

2000.00 3373.00 3724.00 0.00 0.00

4

Term Loan obtained from Banks are secured by first charge on all the immovable properties and hypothecation of all movable assets pertaining to the company, present and future ranking pari passu with the charges created on the said assets and proposal guarentee of Directors of the Company.

5 Related party disclosures:

1. Key Management Personnel i. Mr. Sanat Shirgaonkar - Executive Director ii. Mr. Rajendra Patil - Executive Director

149

iii. Mr. Chandrashekar Yelamali - Chief Operating Officer 2. Other related party with whom the Company had transactions: Associates: i. The Ugar Sugar Works Ltd ii. Shantharam Machineries Pvt. Ltd iii. Ugar Consultancy Limited., Directors: i. Mr. R.S.Patil - Director ii. Mr. G.S.Patil - Director 3. Related Party transaction between the company and related parties and status of out standing balance as on 31.03.2007. i. Remuneration to key Management Personnel Rs. 13,00,000.00 ii. Purchase of Goods / Services for the year ending 31.03.2008 a. The Ugar Sugar Works Ltd Rs.67,898 b. Ugar Consultancy Limited., Rs.45,69,204 c. Shantharam Machineries Rs.2,32,71,111 iii. Balances outstanding payable as on 31.03.2008 a. Shantharam Machineries Pvt.Ltd Rs. 43,62,031 b. Ugar Consultancy Limited., Rs.6,22,473 c. The Ugar Sugar Works Ltd - Rs.67,294 d. Mr. R.S.Patil - Loan Outstanding Rs.3,00,000 e. Mr. G.S.Patil - Loan Outstanding Rs.2,10,000 6 Details of payment to Auditors:

For the year ending

Particulars 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004

Audit Fees 0.70 0.35 0.23 0.03 0.03 7 Previous year figures have been regrouped wherever necessary to conform to current years presentation.

150

Annexure-IV

Statement of Cash Flow, as restated (Rs in Lakh)

For the Year Ended Particulars 31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax and extra-ordinary items 19.31 7.72 (0.48) - -

Adjustments for:

Depreciation - - - - -

Amortisation of Intangible Assets - - 0.48 - -

Assets written off - - - - -

Profit on sale of assets - - - - -

Interest & Finance charges (19.59) - - - -

Investment income - - - - -

Total (0.28) - 0.48 - -

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

7.72 - - -

Decrease / (Increase) in trade and other receivables

(324.18) (690.90) - -

Decrease / (Increase) in inventories (212.13) - - - -

(Decrease) / Increase in trade payables (358.51) 742.23 (0.02) 0.02

CASH GENERATED FROM OPERATIONS (682.69) - - 0.02

Direct taxes paid (3.62) (4.11) - - -

CASH FLOW BEFORE EXTRA-ORDINARY ITEMS

(686.80) - - -

Extra-ordinary items - - - -

NET CASH FORM OPERATING ACTIVITIES (A)

(216.03) (686.80) 51.33 (0.02) 0.02

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of assets (132.25) (8.46) - -

Capital Work-In Prograss (5,479.58) (5,174.74) (11.81) - -

Purchase/sale of investments (2.00) - - - -

Purchase/sale of investments in Subsidiary Company

- - - -

Pre-Operative & Preliminary Expenses (1,130.02) (334.06) (21.17) (0.11) (0.32)

Interest & dividend received 19.59 - - - -

Capital Subsidy received - - -

NET CASH FORM INVESTING ACTIVITIES (B)

(6,592.01) (5,641.05) (41.44) (0.11) (0.32)

C. CASH FLOW FROM FINANCING

151

ACTIVITIES

Interest & Finance Charges - - - -

Proceeds from issuance of share capital 3,787.88 - 1.25 - -

Proceeds from borrowings 4,179.71 4,582.93 - - -

Share Application Money (1,229.56) 2,130.08 - - -

NET CASH FORM FINANCING ACTIVITIES (C)

6,738.03 6,713.01 1.25 - -

Net Increase/(Decrease) in cash and cash equivalents

(70.01) 392.87 11.13 (0.13) (0.30)

Opening cash and cash equivalents 406.18 13.31 2.18 2.31 2.61

Closing cash and cash equivalents 336.17 406.18 13.31 2.18 2.31

Capitalisation Statement Annexure-V (Rs in Lakhs)

Partiulars Pre-issue as at 31.03.2008 Post Issue

1. Secured Loans 8,027.53 8,027.53

2. Unsecured Loans 740.21 740.21

3. Total Debts 8,767.74 8,767.74

4. Less: Short term debt - -

5. Total Long term debt 8,767.74 8,767.74

Shareholders Funds

6. Share Capital 3,794.12 3,794.12

7. Promoters Contribution towards equity share capital

900.53 900.53

8. Reserves & Surplus 8.81 8.81

9. Total Shareholders Funds 4,703.46 4,703.46

Long Term Debt to Equity Ratio (5/9) 1.86 1.86

Total Debts to Equity Ratio (3/9) 1.86 1.86

Book Value per share as on 31st March, 2008 is Rs.10.02.

152

Annexure-VI

Statement of Accounting Ratios (on restated profits) (Rs in Lakh)


31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004 Profit before Tax and exceptional items 19.31 7.72 (0.48) - -

Less: Current Tax & Fringe Benefit Tax 7.97 4.11 - - -

i) Profit after current tax & FBT 11.35 3.61 (0.48) - -

Less: Deferred Tax 5.66 - - - -

ii) Profit after Deferred Tax 5.69 3.61 (0.48) - -

iii) Profit after Current Tax & FBT but before depreciation and write off

5.69 3.61 (0.48) - -

iv) Weighted average number of Equity Shares 12,688,733 62,500 50,000 - -

EPS Basic / Diluted (Rs per share)

- After Current Tax

(i)/(iv) 0.09 5.77 (0.96) - -

- After Deferred Tax

(ii)/(iv) 0.04 5.77 (0.96) - -

- Cash EPS (iii)/(iv) 0.04 5.77 (0.96) - -

Net Worth /NAV/ Return on Net Worth:

- Profit after tax and exceptional items - - - - -

- Net Worth before Deferred tax - - - - -

Return on Net Worth (% age) - - - - -

Net Asset Value per Share (NAV) (Rs.) - - - - -

- Net Worth after Deferred Tax Adjusted Net Worth

- - - - -

Return on Net Worth (% age) - - - - -

Net Asset Value per Share (NAV) (Rs.) - - - - -

153

Annexure-VII

Statement of Other Income, as restated (Rs in Lakh)

Nature For the Year Ended of item Particulars

31/03/2008 31/03/2007 31/06/2006 31/03/2005 31/03/2004

Dividend on Non-trade Investments - - - - - Recurring

Interest on Loans, Bank Deposits and Others

19.59 7.85 - - - Recurring

Machinery/Bullock Cart Hire Charges - - - - - Recurring

Insurance Claims Received - - - - - Non-recurring

Profit on sale of fixed assets - - - - - Non-recurring

Profit on sale of IML and others - - - - - Recurring

Excess Provisions & Unclaimed Credit Balances written back

- - - - - Non-recurring

Insurance and Storage for holding buffer stock of sugar

- - - - - Non-recurring

Refund of Sales Tax - - - - - Non-recurring

Transport Subsidy on Export Sugar - - - Recurring

State Subsidy on Export Sugar - - - Recurring

Sale of CER Units (Carbon Trading) - - - - - Recurring

Foreign Currency Fluctuations - - - - - Recurring

Miscellaneous Receipts - 0.53 - - Recurring

Total 19.59 8.38 - - -

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Annexure-VIII Statement of Loans & Advances as restated (Unsecured) (Rs in Lakh)

For the Year Ended Particulars 31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004

Advance to Cultivators and Contractors Considered Good 243.36 - - - -

Considered Doubtful - - - - - Advance to Suppliers of Machinery, Stores, etc.

Considered Good 1,893.07 1,012.10 690.90 - -

Considered Doubtful Total 2,136.43 1,012.10 690.90 - -

Less: Provision for Doubtful Advances Total 2,136.43 1,012.10 690.90 - -

Advance paid for/against subscription to shares

Advance Payment of Taxes including FBT 7.90 2.99

Less: Deducted from Provision for Taxation as per contra

7.90 2.99

Total 2,136.43 1,012.10 690.90 - -

Note: No amount is due from Promoters/Promoter's Group/Group Companies/Directors/Relatives of Directors.

Annexure-IX Statement of Unsecured Loan: (Rs in Lakh)


31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004 Fixed Deposits :

-From Promoter Directors 5.10 5.10 5.10 5.10 5.10

From Relatives of Promoter Director - - - - -

From Enterprises over which Promoter Directors & their Relatives are able to exercise influence

- - - -

-Others Loan from SBI Koodalasangama 735.11 98.26 Loan from Government of Karnataka in the form of deferment of Cane Purchase Tax.

- - - - -

Total 740.21 103.36 5.10 5.10 5.10 Deposits: The amount of Rs. 5,10,000 shown as deposits in unsecured loans is received from Directors of the Company and there is no interest payable on this amount and this amount will be treated as share application money.

155

Loan from State Bank of India, Br- Koodalsangam :

Lender Nature of Loan

Amount of Loan

Rate of Interest

O/s as on 31.03.2008

Repayment Schedule

Terms & Condition

Security

State Bank of India

Unsecured Demand

Loan

900 lakh

1.50% below SBAR (10%)

735.11 Lakh

Collection through

Agents by PCDs

No specific

terms

Hypothecation of standing

crop & post dated cheques

(PCDs)

Annexure-X

Statement of Secured Loans (Rs in Lakh)


31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004 a. Term Loans

State Bank of India - Hubli 4,082.57 2,601.23 - - -

State Bank of Indore - 1,970.81 659.09 - - -

State Bank of Mysore - Bangalore 1,974.15 1,224.33 - - -

Total 8,027.53 4,484.65 - - -

b. Working Capital Loans - - - - -

Total - - - - - Grand Total 8,027.53 4,484.65

Terms and conditions and security for Secured Loan: Loan from State Bank of India- Hubli is secured by first pari passu charge by way of hypothecation of Plant & Machinery for sugar and co-gen and first pari passu charge by way of equitable mortgage abount 191 acres 24 guntas of land. The rate of interest is at 0.75% below SBAR (11%) with monthly rests. Loan of Rs. 80 crores is to be repaid in 35 quarterly instalments commencing on March, 2008. Loan from State Bank of Mysore- Hubli is secured by first pari passu charge by way of hypothecation of Plant & Machinery for sugar and co-gen and first pari passu charge by way of equitable mortgage abount 191 acres of land. The rate of interest is at 1.25% below SBMPLR (10.25% pa) with monthly rests. Loan of Rs. 20 crores is to be repaid in 35 quarterly instalments commencing on March, 2008. Loan from State Bank of Indore- Hubli is secured by first pari passu charge by way of hypothecation of Plant & Machinery for sugar and co-gen and first pari passu charge by way of equitable mortgage abount 191 acres 24 guntas of land. . The rate of interest is at 1.25% below SBMPLR (10.25% pa) with monthly rests. Loan of Rs. 20 crores is to be repaid in 35 quarterly instalments commencing on March, 2008.

156

Annexure-XI

Statement of Tax Shelters: (Rs in Lakh)

31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Particulars AY 2008-09 AY 2007-08 AY 2006-07 AY 2005-06 AY 2004-05

Tax Rate (including Surcharge & Education Cess)

30.90% 33.66% - - -

Profit as per Profit & Loss Account 19.31 7.72 - - -

Tax at Notional Rate 5.97 2.60 - - -

Adjustments: - - - - -

Permanent Difference - - - - -

Export Profit - - - - -

Timing Difference: - - - - -

Difference between Tax depreciation and Book depreciation

18.30 - - - -

Other adjustments 0.31 - - -

Net adjustments 0.31 - - -

Tax saving thereon 5.66 - - - -

Total Taxation - 2.91 - - -

Tax on Brought Forward Unabsorbed Depreciation adjusted.

- - - - -

Total Normal Tax Payable 5.97 2.91 - - -

Taxable Income as per MAT (i.e Book Profit) - - - - -

Tax Payable as per MAT (including Surcharge) - - - - -

Tax as per Income Tax Return - 2.91 - - -

157

Annexure-XII

Statement of Transactions with related parties in preceding five years

a. Key managerial personnel (Wholetime Directors) and transactions with them Shri. Sanat Shirgaokar, Shri. Rajendra Patil and Shri. Chandrashekar Yalamali

(Rs. in Lakh)


31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004 1. Remuneration Paid 13.00 8.00 - - - 2. Purchase of Sugar cane - - - - -

3. Purchase of Plant & Machinery - - - - -

4. Purchase of other items - - - - -

5. Sales-others/ Consultancy - - - - -

6. Deposit Received - - - - -

7. Deposit Paid/ refunded - - - - -

8. Interest Paid - - - - -

9. Dividend Received - - - - -

10. Dividend Paid - - - - -

11. Consultancy/Repairs/ Others - - - - -

12. Rent received - - - - -

13. Security Charges Paid/ Rent Paid - - - - -

14. Outstanding Balances -

Payable - - - - -

Receivables - - - - - Advance against Capital Orders - - - - -

b. Relatives of Key managerial personnel and transactions with them: NIL

(Rs. in Lakh)

Particulars For the Year Ended

31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004

1. Remuneration Paid - - - - -

2. Purchase of Sugar cane - - - - -

3. Purchase of Plant & Machinery - - - --

4. Purchase of other items - - - --

5. Sales-others/ Consultancy - - - --


7. Deposit Paid - - - - -


158






14. Outstanding Balances

Payable - - - - -

Receivables - - - - -

Advance against Capital Orders - - - - -

c. Related Party Transactions in respect of Associate Companies NIL:

(Rs. in Lakh)


31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004



3. Purchase of Plant & Machinery - - - - -











14. Outstanding Balances

Payable - - - - -


Advance against Capital Orders - - - - -

159

d. Related Party Transactions inrespect of Enterprise over which KMP or Relatives of KMP are able to exercise significant influence

(Rs. in Lakh)


31/03/2008 31/03/2007 31/03/2006 31/03/2005 31/03/2004



3. Purchase of Plant & Machinery 279.08 21.32 - - -











14. Labour Charges Paid - - - - -

15. Outstanding Balances - - - - -

Payable 50.52 7.31 - - -


Advance against Capital Orders - 38.19 - - -

Statement of Qualification in Auditors' Report Annexure- XIII

There are no qualifications in Auditor's Reports for the financial years ended 31st March, 2004, 2005, 2006, 2007 and in 2008 the Audit report is qualified to the extent i. Non compliance of Accounting Standard 15 and ii. Temporary default in payment of interest accrued and due on term loans.

Changes in Significant Accounting Policies Annexure- XIV

There are no changes in Significant Accounting policies during the past five years except as and when Accounting Standards issued by the Institute of Chartered Accountants of India were made appicable on relevant date.

160

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

You should read the following discussion in conjunction with our selected financial and other operating data and our financial statements under Indian GAAP and the related notes to accounts and significant accounting policies that have been incorporated in the section titled "Financial Information". This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. A description of what constitutes a forward-looking statement is provided in "Forward-Looking Statements". Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under "Risk Factors" in this Letter Of Offer. Unless otherwise stated, the financial information used in this section is derived from our restated audited financial statements under Indian GAAP. In this section, any reference to "we", "us", "our", “USW” or “TUSWL” refers to The Ugar Sugar Works Limited. Bracketed numbers indicate losses/ negative figures. Company Background The Ugar Sugar Works Limited was incorporated on 11th September 1939 as a Public Limited Company. The company set up a Sugar Mill with an installed capacity of 500 TCD for manufacturing sugar. Over the years the capacity expansion were done, looking at the cane availability and in all 8 expansions took place between 1955 to 2001. The present crushing capacity of the plant is 10,000 TCD. In the year 1962 a 30,000 KLPD Distillery was started for manufacture of rectified spirit and Extra-Neutral Spirit. The Distillery capacity was also expanded in the year 1994-95 from 30,000 KLPD to 75,000 KLPD. A Liquor manufacturing unit was also set up in the year 1970 and the present capacity of the Unit is 8,000 cases (75 ml x 12 bottles or 375 ml x 24 bottles or 180 ml x 48 bottles). Further an Ethanol manufacturing unit was also set up and the Company can presently manufacture over 20,000 Ltrs. of ethanol per day. In the year 1998 the Company started generation of power (Co-generation) from bagasse as its fuel. The initial capacity was 18 MW, which further expanded in two occasions and the present capacity is 44 MW. Out of 44 MW, during the season, about 20 to 25 MW of electricity generated is exported to Karnataka Grid and is sold to Tata Power Trading Company and the balance is utilized for captive consumption i.e. manufacture of sugar and alcohol. Having regard to the ongoing process of modification and modernization of manufacturing facilities, better energy management, lower chemical consumption, wide product mix, cordial relationship with labor Company is optimistic about the future outlook in the long run. Significant Developments Subsequent to the Last Financial Year In the opinion of the Directors, there have not arisen since the date of the last financial statements disclosed in the Letter Of Offer, any circumstances that materially and adversely affect or is likely to affect the trading or profitability of the Company, or the value of its assets, or its ability to pay liabilities within the next 12 months. The Factors that may affect results of the operations of the company :

a) Excessive production of sugar in the domestic in the international market will bring the prices down and hence affect the revenues of the Company. The market price of sugar depends upon the demand and supply in local as well as in the international market. Excess production of sugar in the domestic as well in international market brings down the prices of sugar. As we have to pay statutory minimum price fixed by the Central Government, the fall in sugar prices will put pressure on our profit margins.

b) Company is in cyclical industry: The domestic sugar industry typically follows 4 to 5 years cycle. Higher sugar cane and sugar production results in fall in sugar prices resulting in reduced cane prices to farmers. This compels the farmers to switch to other crops thereby causing a shortage of sugar cane. Consequently an increase in sugar prices farmers switch back to sugar cane. The cane cultivation goes up for a period of two years and when excessive stocks are built up and the prices come down, the cultivation also comes down.

161

c) Exchange fluctuations:

The international sugar prices are traded in terms of foreign currency. Exchange fluctuation affects the realization of sales in the international market. Whenever Rupee becomes stronger, the realization comes down.

d) Import Tariff: The import duties are levied to discourage the import of sugar in India in situations where we have excess stocks.

e) Domestic duties and taxes: The Central Government as well as the State Government imposes certain taxes and duties such as Cane Purchase Tax, Excise duty on sugar, VAT, etc. Increase in domestic taxes affects the profitability.

f) Change in Brand preference: The demand for various liquor products manufactured by the Company will be affected whenever new brands are introduced in the market. They attract the customers for a short while, when the incentive schemes are given unless it is a very strong brand which eventually catches up in the market. However cheap branded liquors are placed purely on selling price of the product.

g) Increase in labour cost, raw material prices and allied costs: Increase in labour cost, raw material prices and allied costs like transportation, chemicals, gunny bags not in proportion to the increase in the price of sugar may affect results of operations of the Company.

Statement of Profit and Losses as restated (Rs. in Lakh)



Total 8,860.00 39,460.62 31,194.70 47,713.34 29,822.75 20,133.12 Expenditure: Raw Materials Consumed & Purchase of Trading Goods 2,893.78 24,053.06 23,061.32 35,241.05 19,768.33 11,436.25 Manufacturing, Selling & Administrative Expenses 4,540.44 10,263.10 5,628.64 9,577.55 6,415.24 4,313.57 Interest and Finance Charges 728.35 2,310.44 897.36 1,450.41 1,258.96 1,710.00 Depreciation 625.06 1,398.42 654.40 1,066.90 1,122.64 1,310.41 Amortisation 0.70 2.96 1.49 2.56 0.73 0.37

162

Total 8,788.33 38,027.98 30,243.21 47,338.47 28,565.90 18,770.60 Net Profit Before Tax and exceptional items

71.67 1,432.64 951.49 374.87 1,256.85 1,362.52



(38.55) 1,472.67 767.22 285.04 1,366.44 975.39

Note: The financial year ended on 31-03-2007 was for a period of six months. Change in Financial Year : The Company has changed its financial year from 30th September every year to 31st March every year from March 31, 2007 onwards. Hence the financial year 2006-07 ended on 31st March, 2007 is of six months.

Particulars

30-09-2008

31-03-2008

31-03-2007

30-09-2006 % increase (+) / decrease (-)

30-09- 2005

% increase (+) / decrease (-)

30-09-2004

Net Sales 20,765.97 41,313.59 18,408.43 40,378.83 20.70 33,453.54 45.13 23,049.37 Raw Materials Consumed & Purchase of Trading Goods

2,893.78 22,785.25 23,061.32 35,241.05 78.27 19,768.33 72.86 11,436.25

Manufacturing, Selling and Administrative Expenses

4,540.44 10,315.85 5,628.64 9,577.55 51.46 6,415.24 48.72 4,313.57

Interest and Finance Charges

728.35 2,310.44 897.36 1,450.41 15.21 1,258.96 (26.38) 1,710.00

Depreciation 625.06 1,398.42 654.40 1,066.90 (4.97) 1,122.64 (14.33) 1,310.41 Amortization 0.70 2.96 1.49 2.56 250.68 0.73 97.30 0.37 Profit before Tax

71.67 1,043.84 628.14 374.87 (70.17) 1,256.85 (7.76) 1,362.52

Provision for Taxes ( including Current, Fringe and Deferred taxes)

110.22 (40.03) 184.27 89.83 181.97 (109.59) (128.31) 387.13

163

NOTE:

1) Comparison for 30/09/2006 and 31/03/2007 , 31/03/2007 with 31/03/2008 and 31/03/2008 with 30/09/2008 is not possible as it refers for six months period since the company changed the financial year ending 30th September to 31st March every year w.e.f. 31st March, 2007.

2) Sugar mills activities are seasonal and there are no production activity for sugar during the period April to September.

Comparison of Half Year Ended September 30, 2008 with Financial Year March 31st 2008 : The performance of the company for the half year ended September 30,2008 which was of six months period can’t be compared with FY 2008 ended 31st March, 2008 of 12 months period. However comparison where ever possible is is carried out and provided

a) Net Sales have gone down to Rs. 20,765.97 Lacs from Rs. 41313.59lacs the sales for 2008 are for 12 months period

b) Raw Materials Consumed & Purchase of Trading Goods stood at Rs. 2,893.78 lacs as compared to 22785.25 lakh.

c) Manufacturing, Selling and Administrative Expenses decreased to Rs. 4540.44 lacs from 10315.85 lacs from the earlier period as they are for full12 months period and is proportionate.

d) Interest and Finance Charges stood at Rs. 728.35 lacs as compared to 2310.44 for a period of 6 month the interest cost has come down due to liquidation of stocks .

e) Depreciation stood at Rs. 625.06 lacs as compared to Rs. 1398.42 lacs this is in proportion to 12 months period .

f) PBT however stood at Rs. 71.67 lacs from Rs. 1043.84 lacs for the 6 months period, this is due to payment of additional cane price of Rs 100/- for the season 2007-08.

Comparison of Financial Year Ended March 31st 2008 With Financial Year March 31st 2007 : The performance of the company for the FY ended 31st March 2007 which was of six months period can’t be compared with FY 2008 ended 31st March, 2008 of 12 months period. However comparison where ever possible is is carried out and provided

g) Net Sales have gone up to Rs. 41313.59 Lacs from Rs. 18408.43 lacs the sales for 2008 are for 12 months period

h) Raw Materials Consumed & Purchase of Trading Goods stood at Rs. 22785.25 lacs as compared to 23061.32 lakh.

i) Manufacturing, Selling and Administrative Expenses increased to Rs. 10315.85 lacs from 5628.64 lacs from the earlier period as they are for full12 months period and is proportionate.

j) Interest and Finance Charges stood at Rs. 2310.44 lacs as compared to 897.36 for a period of 6 month the interest cost has gone up due to fall in sugar price and increased borrowing for new projects.

k) Depreciation stood at Rs. 1398.42 lacs as compared to Rs. 654.40 lacs this is in proportion to 12 months period .

l) PBT however increased to Rs. 1043.84 lacs up from Rs. 628.14 lacs for the 12 months period.

Segment Profit 30-09-2008 31-03-08 31-03-2007 30-09-2006 30-09-2005 30-09-2004 Sugar (127.84) (3,134.68) (1,097.54) (208.74) 1,760.01 2,312.39 Electricity 600.99 3,858.19 1,481.70 1,532.24 902.63 525.55 Industrial & Potable Alcohol

182.30 1,609.62 509.35 461.96 162.55 581.62

164

Comparison of Financial Year Ended September 30, 2006 With Financial Year March 31st 2007 : The performance of the company for the FY ended 31st March 2007 which was of six months period can’t be compared with FY 2006 ended September 30,2006 of 12 months period. . However the following points are noted:

a) Net Sales have gone down to Rs. 18,408.43 Lacs from Rs. 40378.83 lacs sales for 2007 is for 6 months period.

b) Raw Materials Consumed & Purchase of Trading Goods stood at Rs. 23,061.32 lacs as compared to 35241.05 lakh for 12 months period.

c) Manufacturing, Selling and Administrative Expenses are proportionately higher i.e Rs. 5628.64 lacs for 6 months period as compared to Rs. 9577.55 lacs from 12 months period.

d) Interest and Finance Charges stood at Rs. 897.36 lacs is on higher side for 6 months period as compared to Rs.1450.41 lakh for 12 months period the interest has gone up due to higher cane price paid by the company.

e) Depreciation stood at Rs. 654.40 lacs for 6 months period as compared to Rs. 1066.90 lacs. f) PBT however increased to Rs. 628.14 lacs up from Rs. 374.87 lacs for 6 month period due implementation

wage board settlement. Comparison of Financial Year Ended September 30, 2006 With Financial Year September 30, 2005: Sales: The company’s sales have increased from Rs.40,214.19 Lakh in FY 2005 to Rs.49,400.10 Lakh for FY 2006- an increase of 22.84% from from the previous Financial Year. Expenditure: As compared to increase in sales by 22.84%, the Raw material Consumed & purchase of Trading Goods for FY 2006 was Rs. 35,241.05 Lakhs as compared to FY 2005 of Rs. 19,768.33 Lakhs an increase of 78.27%, this was due to increase in currshing so also cost of raw material. Manufacturing, Selling and Administrative expense for FY 2006 were Rs. 9,577.55 Lakhs as compared to FY 2005 of Rs. 6,415.24 Lakhs an increase by 49.3% this also is due to substantial increase in crushing. Interest and financial charges have gone from Rs.1258.96 to Rs.1450.41 this was due higher crushing resulting in increased working capital laon. Depreciation has slightly gone down to rs.1066.90 lakh as compared to 1122.64 lakh for the year 2005. Segment Profit : The Company has made profits in Electricity and Industrial & Potable Alcohol segments but it has incurred loss in sugar segment due to increase in cost of Raw Material and sudden decrease in sugar prices. The Segment Results (gross) is as follows: (Rs in Lakhs)

Segment FY 2006 FY2005 Sugar (208.74) 1,760.01 Electricity 1,532.24 902.63 Industrial & portable alcohol 461.96 162.55

Other Income: Other Income has improved during financial year 2005 from 387.15 Lakhs to 830.01 Lakhs during FY 2006 due to sale of CER Credit Units and increase in Interest on Loans & Bank Deposits, an increase of 114.39% Adjustments in Restated Accounts: Adjustments have been made in the restated accounts to give effect to the provision created for sugar cane payment during the financial year ended 2002-03. The provision created for payment of sugar cane price has been utilized partly in the year 2002-03 and 2005-06 for the payment sugar cane price. The payment has been adjusted against the provision created.

165

Provision for Tax: Provision for Current tax & FBT was Rs. 116.15 Lakh for FY 2006 as against Rs. 98.00 Lakh for the financial year 2005 Profit After Tax and exceptional items: The Restated profit after tax decreased to Rs.196.82 Lakh for the FY 2006 as against Rs.1,366.44 Lakh in Financial Year ended September 30, 2005.the profit have come down due higher cane price and lower sugar prices. Comparison of Financial Year Ended September 30, 2005 With Financial Year September 30, 2004: Sales: The company’s sales have increased from Rs.26392.07 Lakh in FY 2004 to Rs.40214.19 Lakh for FY 2005- an increase of 52.37% from from the previous Financial Year. Expenditure: As compared to increase in sales by 52.37%, the Raw material Consumed & purchase of Trading Goods increased by 72.86%, Manufacturing, Selling and Administrative expense increased by 48.7%. Interest and financial charges Interest has come down from Rs.1710 lakh to Rs.1258.96 this was due to reorganization of loans the costly loans were repaid by taking lower interest loans. Further working capital laon was reduced by utilizing loan against receivables to farmers. Depreciation Depreciation has come down to Rs.1122.64 lakh as compared to Rs.1310.41 lakh there was no new addition of capital investment during this period. Segment Profit : The Company has made profits in Electricity and Industrial & Potable Alcohol segments but it has incurred loss in sugar segment due to increase in cost of Raw Material and sudden decrease in sugar prices. The Segment Results (gross) is as follows: (Rs in Lakhs)

Segment FY 2005 FY2004 Sugar 1760.01 2312.39 Electricity 902.63 525.55 Industrial & portable alcohol 162.55 581.62

Other Income: Other Income has improved during financial year 2004 from 269.38 Lakhs to 387.15 Lakhs during FY 2005 due to sale of CER Credit Units and increase in Interest on Loans & Bank Deposits, an increase of 43.72% Adjustments in Restated Accounts: Adjustments have been made in the restated accounts to give effect to the provision created for sugar cane payment during the financial year ended 2002-03. The provision created for payment of sugar cane price has been utilized partly in the year 2002-03 and 2005-06 for the payment sugar cane price. The payment has been adjusted against the provision created. Provision for Tax: Provision for Current tax & FBT was Rs. 98.00 Lakh for FY 2005 as against Rs. 146.55 Lakh for the financial year 2004 Profit After Tax and exceptional items: The Restated profit after tax increased to Rs. 1,366.44 Lakh for the FY 2005 as against Rs. 975.39 Lakh in Financial Year ended September 30, 2004.

166

Information required as per clause 6.10.5.5(a) of the SEBI Guidelines

1. Unusual or infrequent events or transactions: There were no unusual or infrequent events since last three years.

2. Significant economic changes that materially affected or are likely to effect income from continuing operations: The increasing upward trend in the price of sugarcane, being a politically sensitive commodity, and the cost of process materials and other chemicals resulted in increased cost of production.

The policy of Central Government of India in respect of mandatory admixture of Ethanol to the extent of 5% from January 07 will increase the production and sale of Ethanol.

3. Known trends and uncertainties:

The major trend that affects the revenues and profitability of the sugar companies is increase in raw material (sugarcane) cost and at the same time fall in the domestic as well as the International market. The Govt. of India, in order to improve the health of the sugar industry has created a Buffer Stock facility thereby the said sugar stock is kept aside and the carrying cost is borne by the Government. The Government has also provided transport subsidy of Rs.1,315/- per ton to encourage sugar export.

Sugar industry is a seasonal industry and the operations are on only for the period of 4 to 6 months being a cyclical industry and the sugar prices having gone down considerably the cultivation of sugarcane for the next years is likely to go down mainly due to the lower cane price that would be receivable by the farmers. This would affect the production of sugar in the Company as well as in the country at large.

The Ugar Sugar Works Ltd. is an integrated complex having 75 KLPD distillery and 44 MW Cogeneration Plant. Ethanol and Indian Made Liquors is also manufactured in the distillery and is being marketed across the country. With the support of these bye-products the Company does not foresee any major impact on its revenue in the years to come.

4. Future relationship between costs and income: We sell products mainly under our own label. Through continuous cost cutting and efficient processes, we have protected our margins in the past and expect to protect in future by improvement in products and processes. Other than as described elsewhere in this Letter Of Offer, there are no known factors, which will affect the future relationship between costs and revenue and the operations adversely.

5. The extent to which the business is seasonal, any significant dependence on a single or few suppliers or customers:

The Company’s business is seasonal only to the extent of manufacture of sugar. The dispatch of sugar in the domestic market is controlled by the Government of India through a release mechanism every month. As per the present policy of the Government the exports are permissible. The sugar is being sold all over India and would not dependent on a few customers only.

Sugarcane being the raw material, Company has established network of suppliers for the same and is not dependent on a few suppliers only. The Company has approximately 28,000 sugarcane suppliers.

6. Turnover of the industry segment in which we operate:

This has been discussed in the section on our industry and our business in the Letter Of Offer.

7. New products or business segments: The Company has started manufacture of Sugar Cubes in the form of Sugar Ships. This is a 100% exported oriented unit with the bye back arrangement for 100% production. The commercial production for the same started in January 2007 and during the year under review we have exported 8 to 10 containers to M/s Fragies (GmbH), Germany.

8. Dependence on single or few suppliers/customers:

We source our products from a very diverse group of suppliers and thus our operations are risk averse from supplier side. Similarly, we sell our products to a wide variety of customer segments and do not foresee business risk arising from our customers.

167

9. Competitive Conditions: The Ugar Sugar Works Limited was the only Sugar Factory in the Athani Taluka of Belgaum District so far. However, two new Sugar Factories have come up in the Taluka and competition from the neighbouring states has also increased. As a result sugarcane availability in the Factory has become very competitive. The Company would be in a position to sustain these competitions as it has higher production capacity and since it is an integrated unit consisting of Distillery, Co-generation, Ethanol, Extra-neutral spirit, rectified spirit and Sugar Ships plant.

10. Approach to Marketing and Proposed Marketing Set-up:

As per the policy of Government of India sugar can be sold in the free market and the levy market. The release mechanism for both is done by the Government of India on month to month basis. Free sale sugar is sold by the Company through tenders every week and the levy sugar is sold as per allotment given by the Govt. of India. The Company in the last year has exported Sugar through Merchant Exporters and only this season the Company has started export of sugar directly.

The electricity generated by the Company is exported to Tata Power Trading Company Ltd. through the local grid. The Company has changed its policy for supplying power to the Tata Power Trading Company Ltd. from local Electricity Board and the Company is earning higher revenue.

The Company also manufactures Indian Made Liquors (IML) and sells about One Lac cases of liquor per month. As per the policy of Government of Karnataka all the liquor sold in Karnataka is routed through KSBCL. Sale of liquor in other states is made through wholesale licensees. The Govt. of Karnataka banned the sale of Arrack to encourage sale of cheap brands of Indian Made Liquors.

168

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS AS ON 22.09.2008 I OUTSTANDING LITIGATIONS INVOLVING THE COMPANY A. CASES FILED AGAINST/ BY THE COMPANY

1. LITIGATION INVOLVING CRIMINAL LAWS: Sr. No Type of Cases Description Number of Cases Amount (Rs in

Lakhs.) Against By Criminal Cases Criminal cases filed by the Company

for Dishonor of Cheques

--

6

37.72

Details as follows: Sr. No.

Case No. & Institution date

Plaintiff /defendants

Name of the Court

Amount involved (Rs.)


Status as on date

1 451-455/2000

USW Vs United Liquors

CJM, Sangli 26,00,000 5 Cases filed U/s 138 of NI, Act

Awaiting judgment

2 561/07 USW Vs Ratan

Traders

CJM, Sangli 11,71,577 Case filed U/s 138 of NI, Act

Awaiting judgment

2. LITIGATION INVOLVING CIVIL LAWS Sr. No Type of Cases Description Number of Cases Amount (Rs in

lakhs.) Against By Civil Cases Case of Recovery of possession of

lands filed against Company and Compensation

1

--

413.70

Case filed against the Company for Damages

1

--

20.00

Case filed by Company for Damages, Injunction, Counterclaim

--

3

Not Quantifiable

Case filed by Company against Shirguppi Sugars

--

1

No remedy sought against company

Arbitration 1 -- 283.85 Details of Civil disputes as follows: Sr. No.


Plaintiff /defendants Name of the Court



Status as on date

1 224/07 Shri. Ganapati Panchayatan Sansthan, Sangli Vs USW

CCJ, Athani 4,13,71,200 Suit filed for recovery of land

Pending for hearing

2 WP3959/04 MSEB, Shoki Ind. Pvt Ltd Vs. USW

Bombay HC 20,00,000 Counter claim

Statuesque

3 Rcs 15/01 USW Vs. Shoki Ind. Pvt Ltd., MSEB

CJJD, Balapur Not Quantifiable Injunction Awaiting order of HC

4 SPCS/ 40/00 MSEB Vs. Shoki Ind. Pvt Ltd , USW

CJJD, Akola Not Quantifiable Recovery of damages

Notice to Schoki

169

5 WP 394/04 USW Vs. Shoki Ind. Pvt Ltd., MSEB

Nagpur HC Not Quantifiable Appeal on injunction orders

Date to be fixed

6 WP38983/02

USW Vs. Shirguppi Sugars Ltd

Karnataka HC Not Quantifiable Establishment of new factory within 15 Kms from TUSW

Pending for hearing

7 Tilaknagar Ind. Ltd Vs. USW

Mumbai 2,83,85,836 Allegations made that we have withdrawn the amount without their consent

Preliminary hearing fixed on 17/09/08

3. LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS Sr. No

Type of Cases Description Number of Cases Amount (Rs in Lakhs.)

Against By Securities Law -- -- -- -- Income Tax Excess Realization 1 -- 208.98 Details as follows: S I No.

Case No & Institution Date

Appellant/ Respondent

Name of Court

Amount Involved

(Rs.)

Subject Matter of the case and relief sought

Status as on Date

1. -- / 14-12-06

USW Vs Joint

Commissioner of Income Tax,

Pune

High Court of Bombay

2,08,98,653 Year of accrual of income from excess realizations on sale of levy sugar – whether date of notification by the Government or whether on admission of claim by the Government. Relief Claimed: Year of accrual to be taken as year in which the claim is admitted by the Government

Appeal filed, has not come up for hearing

4. LITIGATION INVOLVING STATUTORY LAWS Sr. No Type of Cases Description Number of Cases Amount (Rs in

Lakhs.) Against By Central Excise Cases for credit availed/ adjustment 6 -- 137.72 State Excise WP No.12945/2001 filed by Company

against State of Karnataka pending before High Court of Karnataka.

Challenging the Govt action in demanding the company to pay Rs.36.45 Lakhs

Service Tax Cases for credit availed/ adjustment 1 -- 19.84 Central/ State

Sales Tax Cases for credit availed/ adjustment -- 1 18.64

170

Details of Central Excise disputes as follows: Sr. No

Case No & Institution date

Plaintiff/ Defendants

Name of Court/

Tribunal

Amount Involved

(Rs.)

Subject matter of the case and Relief

sought

Status as on date

1 SCN-25/2007 dated 28/05/2007

USW Vs. Comm. of

Central Excise

Comm. of Central Excise,

Belgaum

35,322 Reply has been given to show cause

notice issued by Comm. of CE.

Hearing to be fixed by Department

Relief sought: Reply has been given to show cause notice issued by Comm. of CE, Belgaum in respect of Cenvat credit availed on molasses 2 SCN-18/2007 dated

13.03.2007 Comm. of

Central Excise,

Belgaum

74,71,471 Reply has been given to show cause

notice issued by Comm. of CE


Relief sought: Reply has been given to show cause notice issued by Comm. of CE, Belgaum in respect of Cenvat credit availed on molasses 3 A. No. 393/2007 -62/7

dated 16/02/07 Comm. of

Appeals CE Vs

USW

CESTAT, Bangalore

1,42,214 Cenvat Credit availed on plates,

angles, channels, etc

Heard in August, 08, Order not received

Relief sought: CE dept has appealed against the order of Comm. of CE Appeals, Mangalore 4 A. No 213/07- 18/2006

dated 31/10/2006 Comm. of

Appeals CE Vs

USW

CESTAT, Bangalore

12,00,219 Cenvat Credit availed on plates,

angles, channels, etc


Relief sought: CE dept has appealed against the order of Comm. of CE Appeals, Mangalore The Company has already Reversed proportionate credit on Molasses in our earlier case CESTAT has passed the order in our favour upholding the credit taken on molasses as correct. State Excise details as provided in above table. 5 C NO.

V/17/15/12/2008 Adjn SCN 31/2008

USW Vs. ADC

BELGAUM

COMM, BELGAUM

26,30,662 Cenvat Credit for Plate, Angle, channel, etc

Reply submitted to

SCN, hearing yet to be fixed.

6 C NO V/72/15/06A/2007/200

8 SCN

USW Vs. ADC

BELGAUM

COMM, BELGAUM

22,92,199 Cenvat Credit for Plate, Angle, channel, etc

Reply submitted to


7 C. No. V/BAS/15/16/160/2007

ST Adjn. SCN 2008

USW Vs. ADC

BELGAUM

COMM, BELGAUM

19,84,501 Service Tax in respect of Tilaknagar

Industries Ltd

Reply submitted to


171

Details of Sales Tax disputes as follows: Sr. No

Case No & Institution date

Plaintiff (Appellant) / Defendants

(Respondent)

Name of Court/

Tribunal

Amount Involved

(Rs.)

Subject matter of the case and Relief

sought

Status as on date

1 STA 87/2006- dated 14/02/2006

USW Vs.

St. of Karnataka &

Others

Karnataka Appellate Tribunal, Bangalore

18,64,605 Claim for Refund of subsidy granted to sugarcane growers

hence disputed liability

Hearing yet to be

fixed Relief sought: Setting aside the order passed by JCCT (Appeals), Belgaum rejecting claim of refund of purchase tax subsidy. 5. LITIGATION INVOLVING COMPANY LAW:

NIL 6. LITIGATION INVOLVING LABOUR LAWS: Sr. No


Against By Labor cases Case filed against the Company

for Damages 5 -- 6.55

Details of Labour Laws as follows: Sr. No.


Plaintiff/defendants

Name of the Court Amount involved (Rs.)


Status as on date

1 APP 25/02

Vishnu Jadhav V/s

The USW Ltd.

Addl. Labor Court, Hubli

1,20,135/- Workmen Compensation Case

Case is pending before Addl. Labor Court, Hubli.

2 WCA/80/07

M.H. Nawaj Labour Officer & Commr. For Workmen Compensation, Belgaum

5,00,000/- Workman’s Compensation

Additional Labour Court, Hubli.

3 ID-57/03 Factory Workers’ Union

Industrial Tribunal, Hubli

-- Demand for 20% Ex-gratia payment

Industrial Tribunal, Hubli.

4 139,143,144/07

Govt. of Karnataka Vs. USW

Karnataka HC Not Quantifiable

Regarding alleged violation of the Factories Act

Pending before High Court of Karnataka

5 PGA CR105/08

Smt. Savitri Basappa Kitture

Asst. Labour Comm., Belgaum

34,719 Less payment of Gratuity

Case yet to be heard

II. OUTSTANDING LITIGATIONS AGAINST OUR DIRECTORS: NIL

172

III. OUTSTANDING LITIGATIONS AGAINST OUR PROMOTERS A. FILED BY/ AGAINST THE PROMOTERS/DIRECTORS OF COMPANY

Mr. R V Shirgaokar – Chairman & Managing Director

1. LITIGATION INVOLVING CRIMINAL LAWS

2. LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS

Mr. P. V. Shirgaokar- Executive Director 1. LITIGATION INVOLVING CRIMINAL LAWS

2. LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS LAWS: NIL 3. LITIGATION INVOLVING STATUTORY LAWS: NIL 4. LITIGATION INVOLVING CIVIL LAWS: NIL 5. LITIGATION INVOLVING LABOUR LAWS: NIL

Sr. No.


date


Amount involved (Rs. In Lakh)

Subject matter of the

case and relief sought

Status as on date

1. 350/97 Pollution Control Board., Govt of Karnataka Vs. USWL & R V Shirgaokar, P V Shirgaokar

CJM Belgaum

Not Quantifiable

For not providing Effluent treatment

plant


Sl. No.


date





Status as on date

1 1033/99 IRBI Vs. R V Shirgaokar

DRAT Rs. 33 Personal guarantee invoked

Pending for hearing

2 133/99 ICICI Bank Ltd Vs. Shakti Alloys Steel Ltd & Others

DRT 139 Recovery for Loan taken by Shakti

Alloys Steel Ltd &

personal guarantee

Pending for hearing

Sr. No.


date





Status as on date

1 350/97 Pollution Control Board., Govt of Karnataka Vs. USWL & R V Shirgaokar, P V Shirgaokar

CJM Belgaum

Not Quantifiable

For not providing Effluent treatment

plant


173

IV. OUTSTANDING LITIGATIONS INVOLVING PROMOTERS/DIRECTOR’S GROUP

COMPANIES Sr. No


Against By 1 Criminal Cases NIL NIL NA 2 Securities Cases NIL NIL NA 3 Civil Cases NIL NIL NA 4 Labour/ Industrial cases Case filed against the Company

for Benefits/ ULPs 20 -- Not

Ascertainable 5 Central/ State Sales Tax Disputed amount of set-off 6 -- 1.17 6 Central Excise Wrong availment of CENVAT

Credit 8 -- 136.61

7 Income Tax NIL NIL NA 8 Litigations against

Directors NIL NIL NA

Details as follows:

LABOUR CASES Sr No

Case No. & Institution on

date

Plaintiff/ defendants

Name of the Court

Amount Involved (Rs.)

subject matter of the case and relief

sought

status as on date

1 69 /94 Bajirao S. Hawaldar

Labour Court .. do.. Unfair labour practice Cross

2 171/95 Kakaso G. Shinde

Labour Court .. do.. Permanency benefit Argument

3 430/98 Mech. & Eng. Kamgar Union

(Shramik)

Industrial Court .. do.. Non compliance of agreement

Argument

4 Jul-99 Vijay N. Belgundi / Bajirao T.

Satpute

Civil Judge Jr.Division

.. do.. Darkhast in 1241/89 Cross

5 2-May Ashok B. Kharat Labour Court .. do.. Permanency benefit Hearing

6 82/04 Sanjay B.Patil Industrial Court .. do.. Unfair labour practice Hearing 7 147/04 Sanjay B.Patil Labour Court .. do.. Unfair labour practice Hearing

8 101/06 S.B.Reshellers Kamgar

Sanghatna

Labour Court .. do.. Unfair labour practice Injunction

9 112/06 S.B.Reshellers Kamgar

Sanghatn

Industrial Court Unfair labour practice Injunction

10

131-169/06

Netaji D. Chaugule &

Others

Industrial Court

Permanency benefit

W.S.

11 179/06 S.B.Reshellers KamgarSanghatn

Industrial Court Unfair labour practice Argument

12 180 -204/06 Netaji D. Chaugule &

Others

Industrial Court Permanency benefit W.S.

13 87/07 Sanjay B.Patil Labour Court Unfair labour practice Issue 14 Hambirrao P.

Ulape ACL/Labour

Court Unfair labour practice Matter

referred to Labour

174

Court

15 Maula H.Mulla ACL Unfair labour practice ____"____16 Mahadev D.

Jadhav ACL/Labour

Court Unfair labour practice ____"____

17 Sunil A. Patil ACL/Labour Court

Unfair labour practice ____"____

18 Hindurao M. Khot

ACL/Labour Court


19 Namdev D. Mane ACL/Labour Court


20 Santosh D. Naikwadi

ACL/Labour Court


SALES TAX (SBR) :

Sr. No

Case No. & Institution on

date

Plaintiff/ defendants Name of the Court Amount Inv

olved (Rs.)


sought

status as on date

1 2000-01 6/7/2006

Sales Tax Officer D-1565, Kolhapur

Asst. Commissioner of Sales Tax (Appeals),

P-41 Kolhapur

30,256/- Assessed tax / Set of allowed in dispute

Pending

2 2000-01 6/7/2006



P-41 Kolhapur

Nil Assessed tax / Set of allowed in dispute

Pending

3 2000-01 6/7/2006



P-41 Kolhapur

Nil Assessed tax / Set of allowed in dispute

Pending

4 20001-02 9/6/2007



P-41 Kolhapur


Pending

5 20001-02 9/6/2007



P-41 Kolhapur


Pending

6 20001-02 9/6/2007



P-41 Kolhapur


Pending

CENTRAL EXCISE (SBR) Sr No Case No. &

Institution on date Plaintiff/

defendants Name of the

Court Amount Involve

d


sought

status as on date

1 Appeal No. E/1719/05-Mum

Order No. -In Appeal No. PII/ BKS/57/2005 dt.

31.01.2005

Commissioner (Appeals)

Central Excise Pune II

Customs, Excise& Service Tax

Appellate Tribunal

West Zonal Bench Mumbai

Rs 19,27,285/- with interest

Rs. 19,27,285/- Penalty

Rs. 2,00,000/- Penalty

Cenvat availed shells used in reshelling & cleared without of payment of Excise

Duty

Stay order

received

2 Appeal No.128/07 DT. 28.09.07 Order No. -

45/ADC/2007Cex. Dt. 31.07.07

Additional Commissioner Central Excise,

Pune II

Commissioner Central Excise

(Appeal), Pune II

Rs. 21,03,671/- with interest

Rs. 21,03,671/- Penalty

Disallowed cenvat credit availed on input

used in reshelling of old sugar mill imported

shafts

Appeal allowed OIO No.

PII/ PAP/122/

07 dt.27.12.0

7

175

3 Appeal No.ST/57/08

Order No.PII/PAP/123/07

DT. 27012.2007

Joint Commissioner

(Review)C. Ex.

Pune II

Customs, Excise& Service Tax

Appellate Tribunal

West Zonal Bench Mumbai

Rs. 10,76,086/- with interest

Rs. 10,76,086/- Panalty

Short Service Tax paid on reshelled roller

Reply filed on

05.08.2008

4 Appeal no. 91/08 Order No. ADJ

368/KOP-1/ 2007 dt. 31.01.08

The Assistant Commissioner Central Excise

Kolhapur I

Commissioner (Appeals)Central

Excise Pine II

Rs. 1,69,370/- Wrongly availed cenvat credit on input used in

reshelling on old imported shaft and cleared for export


PII/ PAP/123,

124, 125/08 dt.27.06.08


170/Kop-I/ 2007 dt.31.01.08


Kolhapur I


Excise Pine II




PII/ PAP/123,

124, 125/08 dt.27.06.08

6 Show Cause cum Demand Notice No. F.No. V(SBR)15-

78/ ST/PII/06/Pune. DT.31.07.2007

The Additional Commissioner


The Additional Commissioner


Rs. 21,99,578/- & Edu. Cess Rs.

25,593/-

Service Tax on “Repaires &

Maintenance Service" on reshelling of old imported shafts, after reshelling cleared for

export

Hearing heard on 26.08.08


169/Kop-I/ 2007 dt.31.01.08


Kolhapur I


Excise Pine II Kolhapur I

Rs. 1,84,467- Wrongly availed cenvat credit on input used in



PII/ PAP/123,

124, 125/08 dt.27.06.08

8 Show cause Cum Demand

Notice No. V/Adj/SCN/-

37/SBR 08/3606 dt.

05.08.08


Kolhapur I


Kolhapur I



Reply yet to be

filed

176

M/s. Shantaram Machineries Pvt. Ltd. Sr. No


Against By 1 Criminal Cases NIL NIL NA 2 Securities

Cases NIL NIL NA

3 Civil Cases NIL NIL NA 4 Labour/

Industrial cases Case filed against the Company for retrenchment

4 -- Not Quantifiable

5 Central/ State Sales Tax

Absence of C Form 1 -- Not Quantifiable

6 Central Excise NIL NIL NA 7 Income Tax NIL NIL NA 8 Cases against

Directors NIL NIL NA

1. Labour/ Industrial Matters filed against Company:

Sr No

Case No. & Institution Date


Name of the Court



Status as on date

1 ULP 129/04 Sorate Machindra Rajaram

Industrial Court, Kolhapur

Not Quantifiable

Relief against Retrenchment

Pending for hearing

2 ULP 132/04 Satpute Shankar Shamrao


Not Quantifiable


Pending for hearing

3 ULP 133/04 Bhosale Chandrashekhar Dattatray


Not Quantifiable


Pending for hearing

4 ULP 134/04 Joshi Sudhakar Dinkar


Not Quantifiable


Pending for hearing

2. Central/Sales Tax, VAT Matters:

Sr No


Date


Name of the Court




Status as on date

1 CST B48 01-02

Asst Commissioner of Sales Tax

Asst Commissioner of Sales Tax,

Kolhapur

Not Quantifiable

Absence of “C” Form

Pending

177

Brief Details of Outstanding Litigations Sr No


by/against Company


Total No of Cases

by/against Promoters


(Rs. In Lakh)

1 Criminal *6 37.72 1 ----- 2 Civil *6 433.7 ------- ------ 3 Arbitration 1 283.85 ------- ------ 3 Income Tax 1 208.98 ------- ------ 4 Central Excise/ State

Excise/ Service Tax 7 194.01 ------ ------

5 Central/State Sales tax *1 18.64 ------ ------ 6 Securities Laws/

Economic Laws ------ ------ 2 172

7 Company Law ------ ------ ------ ------ 8 Litigations against

Directors ------ ------ ------ ------

9. Labour Cases 5 6.55 ------ ------

* Filed by the Company ** Out of 6 only 2 cases filed against the Company

Sr No


by/against Directors


Total No of Cases

by/against Group

Companies


(Rs. In Lakh)

1 Securities/ Income Tax/Company Law/Directors

------- ------- ------- ------

2 Criminal Cases/Civil Cases

------- ------ ------ ------

3. Labour/Industrial Cases ------- ------ 24 **Not Ascertainable

4. Central/State Sales tax ------- ------ 7 1.17 5. Central Excise ------- ------ 8 136.61

** Amount not quantifaible as the cases relates to Unfair Labour Practice and the fine cannot be ascertained until the matter is decided. ▪ There is no litigation other than those mentioned above as pending against/by the company/ Directors with respect to clause 6.11.1.15 of the SEBI DIP Guidelines from the date of the certificate till the filling of the Offer Document.

178

OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on August 18, 2007 for offer of shares on right basis to the Equity Shareholders of the Company with a right to renounce and the same was approved by the Equity Shareholders at the General body Meeting held on 28th September, 2007. Prohibition by SEBI Our Company our Directors, our associate and group companies, our Promoter, or the person in control of our Promoter, firms and companies with which our company’s Directors are associated as Directors or Promoters have not been prohibited from accessing the capital markets or restrained from buying, selling or dealing in securities under any Order or Direction passed by SEBI. Further our promoter, Promoter Group Companies are not detained as willful defaulters by RBI/ Government Authorities and there are no violations of the securities laws committed by them in the past or pending against them. Eligibility for the issue The Company is an existing company registered under the Companies Act, whose Equity Shares are listed on the BSE It is eligible to offer this Issue in terms of Clause 2.4.1(iv) of the SEBI (DIP) Guidelines Approvals for the Issue and Business Activity Our Company is not proposing to enter into any new line of business and has the necessary approvals for undertaking its present activities. Disclaimer Clause of SEBI AS REQUIRED, A COPY OF THIS LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THIS LETTER OF OFFER TO SECURITIES AND EXCHANGE BOARD OF INDIA (‘SEBI’) SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. THE LEAD MANAGER TO THE ISSUE, BOB CAPITAL MARKETS LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE LETTER OF OFFER, THE LEAD MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, BOB CAPITAL MARKETS LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED 25/01/2008 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS 1992 WHICH READS AS FOLLOWS: 1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTION WITH THE FINALISATION OF THE LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

179

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, IT’S DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT: a) THE LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND c) THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE. 3. WE CONFIRM THAT BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID. 4. IF UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE NET WORTH OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS -NOT APPLIACBLE 5. ALL INFORMATION SHALL BE MADE AVAILABLE BY THE LEAD MANAGER AND THE ISSUER TO THE PUBLIC AND INVESTORS AT LARGE AND NO SELECTIVE OR ADDITIONAL INFORMATION WOULD BE AVAILABLE FOR A SECTION OF THE INVESTORS IN ANY MANNER WHATSOEVER INCLUDING AT ROAD SHOWS, PRESENTATIONS, IN RESEARCH OR SALES REPORTS. The filing of Letter of Offer does not, however, absolve our Company from any liabilities under Section 63 or Section 68 of the Act or from the requirement of obtaining such statutory and other clearances as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take up, at any point of time, with the Lead Manager any irregularities or lapses in the Letter Of Offer. Caution The Company and Lead Manager accept no responsibility for statements made otherwise than in the Letter Of Offer or in the advertisements or any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information would be doing so at his/her/their own risk. All information shall be made available by the Lead Manager and the Issuer to the shareholders and no selective or additional information would be made available for a section of the shareholders or investors in any manner whatsoever including at presentations, research or sales reports etc. Disclaimer in Respect of Jurisdiction This Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations hereunder. The distribution of the Letter Of Offer and the offering of the securities on a rights basis to persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons into whose possession this Letter Of Offer may come are required to inform themselves about and observe such restrictions. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Sangli, India only.

180

Disclaimer clauses of Stock Exchanges The Bombay Stock Exchange Limited, has vide letter No. DCS/PREF/JA/IP-RT/3722/07-08, dated March 28, 2008, has given permission to our Company to use the name of the Exchange in the Letter of Offer as the stock exchange on which the shares on offer are proposed to be listed. Disclaimer clause of the BSE The Bombay Stock Exchange Limited (“the Exchange”) has given vide its letter No. DCS/PREF/JA/IP-RT/3722/07-08, dated March 28, 2008 permission to the Company to use the Exchange’s name in this Letter of Offer as one of the Stock Exchanges on which this Company’s securities are proposed to be listed. The Exchange has scrutinized this Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) take any responsibility for the financial or other soundness of this Company, its Promoter, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Filing The Letter Of Offer has been filed with Securities Exchange Board of India, SEBI Bhavan, Plot No C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051, for its observations and also with all the Stock Exchanges where the securities to be issued in terms of this Letter Of Offer are proposed to be listed. Listing The existing Equity Shares of our Company are listed on BSE. Our Company has paid the current annual listing fees to BSE where its equity shares are listed. Our Company has applied for in-principle approvals from BSE for the securities proposed to be issued through this Letter Of Offer and has received in-principle approval from BSE by its Letter No. DCS/PREF/JA/IP-RT/3722/07-08, dated March 28, 2008 granting in-principle approval for listing the securities arising from this issue. If the permission to deal in and for an official quotation of the securities is not granted by the stock exchange mentioned above, our Company shall forthwith repay, without interest, all monies received from the applicants in pursuance of this Letter Of Offer. If such money is not repaid within eight days after our Company becomes liable to repay it (i.e. 42 days after closure of the Issue), then our Company and every director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money, with interest as prescribed under sub-sections (2) and (2A) of Section 73 of the Act. Consent Consent in writing of the Auditors, Lead Manager, Registrar to the Issue and Banker to the Issue to act in their respective capacity have been obtained and filed with SEBI, along with a copy of the Letter Of Offer and such consents have not been withdrawn up to the time of delivery of this Letter Of Offer for registration with the stock exchanges. The Auditors of our Company have given their written consent for the inclusion of their Report in the form and content as appearing this Letter Of Offer and such consents and Reports have not been withdrawn upto the time of delivery of this Letter Of Offer for registration to the ROC, Pune PMT Building, 3 rd Floor, Deccan Gymkhana-Pune Maharashtra.M/s. P.G.Bhagwat., Auditors have given their written consent for inclusion of income tax benefits in the form and content as appearing in this Letter Of Offer accruing to our Company and its members. To the best of our knowledge there are no other consents required for making this issue, however, should the need arise, necessary consents shall be obtained by us.

181

Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Act, which is reproduced below: “Any person who (a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or (b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.” Expert Opinion Save and except as stated elsewhere in this Letter Of Offer, our Company has not obtained any expert opinions. Option to Subscribe Save as otherwise stated elsewhere in this Letter Of Offer, our Company has not given any option to subscribe for any shares of our Company. Minimum Subscription If our Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. The issue will become under subscribed after considering the number of shares applied as per the entitlement plus additional shares. The undersubscribed portion can be applied for only after the close of the Issue. To ensure that the Issue is successful the Promoters of The Ugar Sugar Works Limited have undertaken to subscribe to such unsubscribed portion either by themselves or through their group, including group companies and or associates if the issue does not receive subscription to the extent of 90% of the Issue size. This acquisition of additional Equity Shares, if allotted to the Promoters of The Ugar Sugar Works Limited or their group including group companies and or associates shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of our Company. Please also refer to Section titled “Basis of Allotment” beginning on page 196 of this Letter Of Offer. Dematerialised Dealing Our Company has an agreement with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and its equity shares bear the ISIN No INE071E01023 . Allotment and Refund Our Company will issue and dispatch the Letter of Allotment /Share Certificate Demat Credit and/or Letter of Regret along with the Refund Order, if any, within a period of six weeks from the date of closure of the Issue. If such monies are not repaid within eight days from the day our Company becomes liable to pay it, our Company shall, as stipulated under Section 73(2A) of the Act, pay such monies with interest @ 15% p.a. The Letter of Allotment / Share Certificates Refund Order exceeding Rs.1,500/- would be sent by registered post / speed post to the sole/first applicant’s registered address. Refund Orders up to the value of Rs.1,500/- would be sent under Certificate of Posting. Such Refund Orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favor of the sole/first applicant. Adequate funds would be made available to the Registrar to the Issue for making arrangements to dispatch refund orders/share certificates/allotment advices as above. Our

182

Company will comply with all the legal requirements applicable till the date of filing of the Letter of Offer with the Stock Exchange. Underwriting Commission, Brokerage and Selling Commission. No Underwriting Commission, Brokerage and Selling Commission will be paid for the Issue. DETAILS OF RIGHTS/ PUBLIC ISSUE IN THE LAST 5 YEARS- The company had not come out with any Rights or Public Issue during the period of last five years ending with the date of filing of this Letter of Offer. Issue Programme The subscription list will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned below or on such extended date (subject to a maximum of 30 days) as may be determined by the Board, subject to necessary approvals:

ISSUE OPENS ON

LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS

ISSUE CLOSES ON

17.11. 2008 24.11. 2008 02.12. 2008 Issue expenses The expenses for this Issue include issue management fees, printing and distribution expenses, legal fees, advertisement expenses, depository charges, and listing fees to the Stock Exchanges, among others. The total expense for this Issue is estimated not to exceed Rs. 50 Lakhs as tabulated below:-. Sr. No. Particulars Amount

(Rs. in Lakhs) 1. Issue Management Fees 18.00 2. Legal Counsel Fees 1.00 3. Auditor's Fees 2.00 4. Registrar's Fees 5.00 5. Statutory Advertisement Expenses 5.00 6. Printing Expenses 7.00 7. Postage Expenses 8.00 8. Others (SEBI Filing Fees, Stock Exchanges Fees, Out of pocket

expenses etc.) 4.00

Total 50.00 Fees Payable to the Registrar to the Issue. The Fees Payable to the Registrar to the Issue is set out in relevant documents, copies of which are available for inspection at the Registered office of our Company Companies Under the same Management within the meaning of Section 370(1)(B) of the Act.

There are no companies under the management within the meaning of section 370(1B) of the Companies Act, 1956, other than Group Companies details of which are provided in the section titled “Details of Group Companies ” on page no. 122 of this Letter Of Offer.

183

STOCK MARKET DATA

(i) The following is the movement in the share price of our Company on the BSE: Year High Low

Date Rs. Volume Date Rs. Volume

Average Price (Rs.)

2005 18/03/2005 338.50 24776 29/06/2005 15.80 1100 177.15 2006 10/02/2006 51.45 1642533 28/11/2006 15.50 163367 33.48 2007 17/12/2007 23.52 813802 17/08/2007 9.49 25590 16.51 2008 07/08/2008 27.65 305089 24/10/2008 10.90 64941 19.28

Note: Upto 30th June 2005 shares are of the face value of Rs. 10 each and with effect from 01st July 2005 the shares are of the face value of Rs. 1 each (ii) The closing market price of the equity share of our Company on the BSE on the day after the Board approved the Issue (i.e. August 18, 2007) was Rs. 12.00 per share. ( as 18.08.07 was Saturday, the price is based on 20.08.07) (Source: BSE Website) (iii) The total volume of securities traded in each month during the preceding six months on the BSE was as follows:

Month High Low

Date Rs. Volume Date Rs. Volume

Total Volume

May 08 09/05/2008 18.85 45186 26/05/2008 16.50 48476 721172 June,08 19/06/2008 18.85 34444 30/06/2008 15.25 36374 757583 July,08 31/07/2008 22.45 102056 02/07/2008 14.60 21279 1099650 Aug 08 07/08/2008 27.65 305089 01/08/2008 21.20 128102 2368997 Sept 08 09/09/2008 24.45 46389 30/09/2008 14.45 49855 801629 Oct 08 01/10/2008 16.30 26593 24/10/2008 10.90 64941 691902

(iv) The Ordinary Shares of our Company are actively traded on The Bombay Stock Exchange Limited. (v) Please refer to page 30 of this Letter Of Offer for details regarding transactions in the securities of our Company undertaken by the promoters, relatives and directors of our Company during the last 6 months, from date of filing of draft offer document with SEBI and updated till date. Mechanism evolved by our Company for redressal of Investor grievances Investor grievances are settled expeditiously and satisfactorily by our Company. The agreement between our Company and the Registrars will provide for retention of records with the Registrars for a period of atleast one year from the last date of dispatch of letter of allotment/share/ certificate/refund order to enable the Registrars to redress grievances of investors.

All grievances relating to the Issue may be addressed to the Registrars to the Issue giving full details such as folio No., name and address of the first applicant, Equity Shares, Application Form serial number, amount paid on application and the Bank Branch where the application was deposited, alongwith a photocopy of the acknowledgement slip. In case of renunciation, the same details of the renouncee should be furnished

All investors are hereby informed that our Company has appointed a Compliance Officer as well as we have Investor Grievances Committee who may be contacted in case of any pre-issue/post-issue related problems. Mr. B.G. Kulkarni, Company Secretary and Compliance Officer Registered Office: Mahaveer Nagar, Sangli-416 416,(Maharashtra) Tel No.0233-2623716,2623717; Fax No.0233-2623617.

184

GOVERNMENT APPROVALS

In view of the approvals listed below, we can undertake this Issue and our current business activities and no further material approvals are required from any Government authority or the RBI to continue such activities. We have the following Government approvals that are material to our business:

General

1 PAN Number AAACT7580R issued on 28.09.1999. 2 Certificate of Importer Exporter Code, 0790000423 issued on November 20, 2006 by the Office of Joint Director General of Foreign Trade. 3. Central Excise Registration No: 2/92 C. EX/AAACT7580RXM001 4. Service Tax Registration No. AAACT7580R ST004 issued on 29.09.2007. The Certificate is valid

for as long as the holder carries on the specified activity. 5. Allotment of Tax Deduction Account No. KLPT01896G issued under section 203A of the Income

Tax Act, by the Income Tax Department 6. License No. KN170 issued by issued under the Employees Provident Fund and Miscellaneous

Provisions Act, 1952, by the Assistant Provident Fund Commissioner on November 24, 1960 7. Sales tax Approvals/TIN/VAT No: 29520007001 8. Professional Tax Approval/ Registration No: 504/PT/107/99.2000 issued on June 05, 1999. 9. Agriculture and Processed Food Products Export Development Authority Registration No:

APEDA/REGN/IMP/ BANR/30963 issued on June 30, 2007. 10. The Company can undertake the activities proposed by it in view of the present approvals and no

further approvals from any Government Authorities/ RBI are required by the company to undertake the proposed activities.

Pending approvals for the project:

Pending Govt. Approvals M/s. Sadashiva Sugars Ltd., is yet to receive following pending approvals from the Government :



If the Company doesn’t get these approvals from the Government, Company cannot start its operations and this may affect on the implementation of the Project. The Company has already approached the Governmental Authorities for the approvals and whatever steps are required for getting these approvals have already been taken by the Company.

185

SADASHIVA SUGARS LTD LIST OF GOVT. APPROVALS

SL. No Details of Approvals Issuing Authority License No Date of Approval VALIDITY

1 VAT Registration Certificate Local VAT Officer 29130472670 01-02-2005

2 Import & Export Code (IEC) JDGFT 706004493 31-05-2006

3 e-TDS Intermediary Income Tax Dept BLRS22116D 14-03-2006

4 Income Tax PAN No Income Tax Dept AAICS8468F

5 Service TAX Superintend of Central Excise AAICS8468FST001 22-01-2007

7 Establishment of new factory Dy. Director of Factories DSK/DEV/69/06-07 20-12-2006

8 Inspector Boiler Office Hubli Dy. Director of Factories HU-1:FPN:SR-13:2006-07 26-05-2006

9 ALLOTMENT OF LAND Dy. Commissioner, Bagalkot RB/KLR/CR-28/2005-06 29-03-2006

10 Approval for Boiler erection Directors of Factories & Boilers BLR-2/INS/CR-151/06-07 25-01-2007

11 Clearance from Karnataka Pollution Control Board Member Secretary

KSPCB/CFE-NEIA/SSL/2006-07 29-07-2006

12 GOK permission to establish sugar factory

Secretary, Industries Dept, GOK under Secretary, Ministry of Commerce & Industry, GOI CISGF 01 Dt.01-09-2003 01-09-2003

13 Govt of India IEM Application GOI 1844/SIA/IMO0/2001 19-10-2001

14 ADDITIONAL ALLOTMENT OF LAND

MD & Member Secretary, SLSWCC

KUM/SLSWCC-32/E4/2207-08 16-05-2007

15 Entry Tax Exemption Certificate Jt Director, District Industries Centre

BGK/DIC/I.P.O/E.T.E-19/2008-09/29 27-08-2008 24-2-2009

16 Karnataka Power Transmission Corporation Ltd

Chief Electrical Inspector to GOK

CEE(P&C)/KCO-93/8892/F-184 04-06-2008

2007-08 SEASON

17 CRUSHING LICENCE Secretary, Industrial Dept. NO.CI:SGF:08 Dt.25-8-08 25-8-08 2007-08 SEASON

18 IEM Acknowledgement received

19 Central Government recognizing SSL as existing industry

Ministry of Consumer Affairs, Food & PD, Director of Sugar, GOI

No.25(1990)1007-ST/308 Dt.25-8-2008 1/9/2008

Details approvals pending: 1 Crushing license for 2008-09 Secretary, Industrial Dept. Application submitted

2 Pollution control board final approval Member Secretary Application submitted

3 Ecology and Environmental clearance Member Secretary Application submitted

4 Factory license under Factories Acty Inspector of Factories Application submitted

186

DIVIDEND POLICY

Dividends, other than interim dividends, will be declared at the annual general meeting of the shareholders based on the recommendation of the Board of Directors. The Board may, at its discretion, recommend dividends to be paid to our shareholders. Generally, the factors that may be considered by the Board of Directors before making any recommendations for the dividend include, without limitation, our future expansion plans and capital requirements, profits earned during the fiscal year, cost of raising funds from alternate sources, liquidity position, applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories of investors from time to time and general market conditions.

Dividends paid –for the last five years.

For the Financial Year Ended Particulars 31-03-2008 31-03-2007 30-09-2006 30-09-2005 30-09-2004

On Equity Shares:

No of Equity Shares

90,000,000 90,000,000 90,000,000 90,000,000 5,625,000

Face Value 1 1 1 1 10

Paid up value 90,000,000 90,000,000 90,000,000 90,000,000 5,62,50,000

Rate % 20.00 - 20.00 20.00 30.00

Amount of Dividend

180.00 - 180.00 180.00 168.75

Dividend Tax 30.59 - 25.24 25.24 22.06

Total Pay Out 230.59 - 205.24 205.24 190.81

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TERMS OF THE PRESENT ISSUE

The Equity Shares, proposed to be issued on rights basis, are subject to the terms and conditions contained in this Letter Of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of our Company, the provisions of the Act, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India, the Reserve Bank of India and/or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate and rules as may be applicable and introduced from time to time.

Authority for the Issue

This Issue is being made pursuant to the resolution passed by the Shareholders of our Company under Section 81(1A) of Act at its meeting held on September 28, 2007

Basis for the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders of our Company whose names would appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in dematerialized form and on the Register of Members of our Company in respect of the Equity Shares held in physical form at the close of business hours on the Record Date, i.e., 29th September, 2008, fixed in consultation with the Bombay Stock Exchange.

Principal Terms and Conditions of Issue:

Face value

Each Equity Share shall have the face value of Rs. 1.

Issue Price

Each Equity Share is being offered at a price of Rs.8 (including a premium of Rs.7).

Terms of payment

TERMS OF PAYMENT

Nominal Value per Share Premium per Share Total On Application & Allotment

1.00 7.00 8.00

Total 1.00 7.00 8.00 Payment should be made by cash/ cheque / demand draft / drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub member of the Bankers’ to the Issue clearing house located at the centre where the application is accepted. A separate cheque/ draft must accompany each application form. Outstation cheques/ drafts will not be accepted and application(s) accompanied by such cheques/ drafts will be rejected. Rights Entitlement Ratio

The Equity Shares are being offered on rights basis to the existing Equity Shareholders of our Company in the ratio of 1 Equity Share for every 4 Equity Shares held as on the Record Date.

Fractional Entitlements

The shareholders are entitled to the allotment of one equity share for every 4 shares held. In case of any shareholding other than in multiples of 4, the fractional entitlements arising there-in, would be rounded off to the

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highest integer for determining the respective rights entitlement. The Equity Shares needed for such shares will be first adjusted from the unsubscribed portion of the Issue, if any and should there be further requirement, from the Promoter and Promoter Group’s entitlement at the time of allotment. Shareholders whose fractional rights are being ignored should be given preferential allotment of one additional share each if they apply for additional shares.

Joint-Holders

Where two or more persons are registered as the holders of any Equity Share, they shall be deemed to hold the same as joint-tenants with benefits of survivorship subject to provisions contained in the Articles of Association of our Company.

Ranking of the Equity Shares

The Equity Shares shall be governed by the provisions of the Memorandum and Articles of Association of our Company and the Act. Upon being admitted for trading subsequent to issue, the Equity Shares allotted in this Issue shall rank pari passu with the existing Equity Shares in all respects including dividend.

Listing and Trading of the Equity Shares proposed to be Issued

Our Company’s existing Equity Shares are currently traded on the BSE under the ISIN INE071E01023. The Equity Shares being issued through the present rights issue are proposed to be listed, immediately after allotment, on the Bombay Stock Exchange. The shares which are fully paid will be admitted for trading on the Exchange under the existing ISIN. A separate ISIN will be obtained for partly paid up shares of our Company. The Equity Shares allotted pursuant to this Issue will be listed as soon as practicable but in no case later than 7 days from the date of allotment.

Printing of Bank Particulars on Refund Orders

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars will be printed on the refund orders/refund warrants which can then be deposited only in the account specified. Our Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud.

Notices

All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper with wide circulation and/or, will be sent by ordinary post / registered post / speed post to the registered holders of the Equity Share from time to time.

Market lot

The Equity Shares of our Company are tradable only in dematerialized form. The market lot for Equity Shares in dematerialized mode is 1 (one). In case of holding of Equity Shares in physical form, our Company would issue to the allottees one (1) certificate for the Equity Shares allotted to one (1) folio ("Consolidated Certificate"). In respect of the Consolidated Certificate, our Company will, upon receipt of a request from the Equity Shareholder, split such Consolidated Certificate into smaller denominations within six (6) weeks time from the receipt of request of the Equity Shareholder. No fee would be charged by our Company for splitting the Consolidated Certificate.

Nomination facility

In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. In case of Equity Shareholders who are individuals, a sole Equity Shareholder or the first named Equity Shareholder,along with other joint Equity Shareholders, if any, may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity Shares. A person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares.Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination

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to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the registered office of our Company or such other person at such addresses as may be notified by our Company. The applicant can make the nomination by filling in the relevant portion of the CAF. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registered the nomination with our Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective Depositary Participant ("DP") of the applicant would prevail. Any applicant desirous of changing the existing nomination is requested to inform its respective DP. Minimum Subscription If our Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. The issue will become under subscribed after considering the number of shares applied as per the entitlement plus additional shares. The undersubscribed portion can be applied for only after the close of the Issue. To ensure that the Issue is successful the Promoters of The Ugar Sugar Works Limited have undertaken to subscribe to such unsubscribed portion either by themselves or through their group, including group companies and or associates if the issue does not receive subscription to the extent of 90% of the Issue size. This acquisition of additional Equity Shares, if allotted to the Promoters of The Ugar Sugar Works Limited or their group including group companies and or associates shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of our Company. Please also refer to Section titled “Basis of Allotment” beginning on page 196 of this Letter Of Offer. Offer to Non-Resident Equity Shareholders/Applicants

As per Regulation 6 of Notification No. FEMA 20/200-RB dated May 3, 2000, the RBI has given general permission to Indian companies to issue rights shares to non-resident shareholders including additional shares. Applications received from NRIs and non-residents for allotment of Equity Shares shall be inter alia, subject to the conditions imposed from time to time by the RBI under the Foreign Exchange Management Act, 1999 (FEMA) in the matter of refund of application moneys, allotment of Equity Shares, issue of letter of allotment / notification No. FEMA 20/200-RB dated May 3, 2000. The rights shares purchased by non-residents shall be subject to the same conditions including restrictions in regard to the repatriability as are applicable to the existing Equity Shares against which the new Equity Shares are issued pursuant to this Issue. All the existing NRE Shareholders are holding shares on non-repatriable basis.

By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Further, the RBI in its Master Circular dated July 1, 2005 has stated that OCBs are not permitted to subscribe to equity shares of Indian companies on rights basis under the automatic route. OCBs shall not be eligible to subscribe to the Equity Shares pursuant to this Letter Of Offer unless they obtain the prior approval of the RBI in this regard. Thus, OCBs desirous of participating in this Issue must obtain prior approval from the RBI. On providing such approval to our Company at its registered office, the OCB shall be entitled to receive the Letter of Offer and the CAF.

Letter of offer and CAF shall be dispatched to non-resident Equity Shareholders in India only.

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.Procedure for Application

The CAF would be printed in black ink for all Equity Shareholders. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrars to the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. Nonresident shareholders may obtain a copy of the CAF from the Registrars to the Issue, Big Share Services Private Ltd from their office located at E-2, Ansa Industrial Estate Saki Vihar Road, Saki Naka Andheri (E), Mumbai- 400072 India by furnishing the registered folio number, DP ID number, Client ID number and their full name and address. Equity Shares offered to you pursuant to this Issue may be renounced, either in full or in part, in favour of any other person or persons. Such renouncees can only be Indian nationals/ limited companies incorporated under and governed by the Act, statutory corporations/institutions, trusts (unless registered under the Indian Trust Act), minors (through their legal guardians), societies (unless registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorised under its constitution/bye laws to hold equity shares in a company and cannot be a partnership firm, more than three persons including joint-holders, HUF, foreign nationals (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Letter Of Offer could be illegal or require compliance with securities laws

Acceptance of the Issue

You may accept and apply for the Equity Shares offered, either in full or in part, by filling Part A of the Composite Application Form (CAF) and submit the same along with the Application Money payable to the Bankers to the Issue or any of the branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of our Company in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the cheque /demand draft payable at Mumbai to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected.

Option available to the Equity Shareholders

The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is entitled to.

If the Equity Shareholder decides to apply for the Equity Shares, then he/she/it can:

• Apply for his entitlement in full; • Apply for the entitlement in part; • Apply for the entitlement in part and renounce the other part; • Apply for the entitlement in full and apply for additional Equity Shares. Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional Equity Shares. Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favour of any other person(s). If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional shares in Part A of the CAF. Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under the section entitled ‘Basis of Allotment’ beginning on page 196 of this Letter Of Offer. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares.

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Renunciation

This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favour of any other person or persons. Renouncees can only be Indian Nationals (including minor through their natural/legal guardian)/limited companies incorporated under and governed by the Act, statutory corporations/institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorised under its constitution/bye laws to hold equity shares in a company and cannot be a partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Letter Of Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not approved by the Board.

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s)/renouncee(s) obtaining the approval of the FIPB and/ or necessary permission of the RBI under the Foreign Exchange Management Act, 1999 (FEMA) and other applicable laws and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approval are liable to be rejected.

By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders of our Company who do not wish to subscribe to the Equity Shares being offered but wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s).

Your attention is drawn to the fact that our Company shall not allot and/or register any Equity Shares in favour of:

• More than three persons in case of joint holders; • Partnership firm(s) or their nominee(s); • Minors; • Hindu Undivided Family; • Any trust or society (unless the same is registered under the Societies Registration Act, 1860 or the Trusts Act, 1882, as applicable, and is authorized under its constitution to hold shares of a company); Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collecting branches specified on the reverse of the CAF with the form of renunciation (Part B of the CAF) duly filled in shall be conclusive evidence for our Company of the person(s) applying for Equity Shares in Part ‘C’ of the CAF to receive allotment of such Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares. Part ‘A’ of the CAF must not be used by the renouncee(s) as this will render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour of any other person.

Procedure for renunciation

To renounce all the Equity Shares offered to a shareholder in favour of one renouncee

If you wish to renounce the Equity Shares offered pursuant to this Issue and as indicated in Part ‘A’ of the CAF, in whole, please complete Part ‘B’ of the CAF. In case of joint holding, all joint holders must sign Part ‘B’ of the CAF. The person in whose favour renunciation has been made should complete and sign Part ‘C’ of the CAF. In case of joint renouncees, all joint renouncees must sign Part ‘C’ of the CAF.

To renounce in part or to renounce the whole to more than one person(s)

If you wish to either accept the Equity Shares offered pursuant to this Issue in part and renounce the balance Equity Shares or renounce all the Equity Shares offered pursuant to this Issue in favour of two or more renouncees, the CAF must be first split into the requisite number of forms. Please indicate your requirement of split forms in the space provided for this purpose in Part ‘D’ of the CAF and

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return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for split forms. On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed.

In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the specimen registered with our Company, the application is liable to be rejected.

Renouncee(s)

The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part ‘C’ of the Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with the application money in full.

Request for Split Forms: Person who is applying for split forms should request to the company for the issuance of split form. Change and/ or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is/are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed.

Please note that:

• Part ‘A’ of the CAF must not be used by any person(s) other than the Equity Shareholder to whom this Letter Of Offer has been addressed. If used, this will render the application invalid.

• Request by the applicant for the split application form should reach our Company on or before [•], 2008. • Only the Equity Shareholder to whom this Letter Of Offer has been addressed shall be entitled to renounce and to apply for split application forms. Forms once split cannot be split further. • Split form(s) will be sent to the applicant(s) by post at the applicant’s risk. How to Apply

Resident Equity Shareholders

Applications should be made by filling in the enclosed CAF provided by our Company. The enclosed CAF should be completed in all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Manager or by the Registrar to the Issue or by our Company at any offices except for postal applications as per instructions given elsewhere in the Letter Of Offer.

The CAF consists of four parts: • Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares • Part B: Form for renunciation • Part C: Form for application for renouncees • Part D: Form for request for split application forms Non-resident Equity Shareholders

Applications received from the non-resident Equity Shareholders for the allotment of Equity Shares pursuant to this Issue shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund of application monies, allotment of Equity Shares, issue of letters of allotment/ certificates/ payment of dividends etc.

This Letter Of Offer and the enclosed CAF shall be dispatched to non-resident Equity Shareholders in India only.

Mutual Funds

A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the

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application is being made.

The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:

Option Option Available Action Required

A. Accept whole or part of your entitlement without renouncing the balance.

Fill in and sign Part A (All joint holders must sign)

B. Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

C. Accept only a part of your entitlement of the Equity Shares offered to you (without renouncing the balance)

Fill and sign Pat A of the CAFs

D. Renounce your entitlement in full to one person (Joint renouncees not exceeding three are considered as one renouncee).

Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign)

E. 1. Accept a part of your entitlement and renounce the balance to one or more renouncee(s) OR 2. Renounce your entitlement to all the Equity Shares offered to you to more than one renouncee

Fill in and sign Part D (all joint holders must sign) requesting for Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below. (i) For the Equity Shares you wish to accept, if any, fill in and sign Part A of one split CAF (only for option 1). (ii) For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand over the split CAFs to the renouncees. (iii) Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

F. Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the renounces must fill in and sign Part C.

Applications for Equity Shares should be made only by way of the CAF, which is provided by our Company. The CAF should be completed in all respects as explained under the head “INSTRUCTIONS” indicated on the reverse of the CAF before submission to the Banker to the Issue at its collecting branches mentioned on the reverse of the CAF on or before [•]. Non-resident shareholders/renouncees should forward their applications to the Banker to the Issue as mentioned in the CAF for non-resident Equity Shareholders. No part of the CAF should be detached under any circumstances. Applicants must provide information in the CAF as to their savings / current / NRE / NRO / FCNR bank account and the name of the bank with whom such account is held to enable the Registrar to print the said details in the refund orders after the name of the payees.

For applicants residing at places other than designated Bank Collecting branches.

Applicants residing at places other than the cities where the collection centres have been opened should send their completed CAF by registered post/speed post to the Registrars to the Issue, Bigshare Services Pvt. Ltd alongwith bank drafts payable at Mumbai net of demand draft and postal charges in favour of “The Ugar Sugar Rights Issue A/c” crossed “A/c Payee only” so that the same are received on or before closure of the Issue.

Our Company will not be liable for any postal delays and applications received through mail after the closure of the Issue, are liable to be rejected and returned to the applicants. Applications by mail should not be sent in any other manner except as mentioned below.

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All application forms duly completed together with cash/ cheque/demand draft for the application money must be submitted before the close of the subscription list to the Bankers to the Issue named herein or to any of its branches mentioned on the reverse of the CAF. The CAF along with application money must not be sent to our Company or the Lead Manager to the Issue or the Registrars to the Issue except as mentioned above.

The applicants are requested to strictly adhere to these instructions. Failure to do so could result in the application being liable to be rejected with our Company, the Lead Manager and the Registrars not having any liabilities to such applicants.

Availability of duplicate CAF

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the CAF for any purpose including renunciation, even if it is received/ found subsequently. Thus, in case the original and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with a demand draft payable at Mumbai net of bank and postal charges, which should be drawn in favour of “The Ugar Sugar Rights Issue A/c” in case of resident shareholders and non-resident shareholders applying on non-repatriable basis and send the same by registered post directly to the Registrar to the Issue so as to reach them on or before the closure of the Issue. The envelope should be super scribed THE UGAR SUGAR RIGHTS ISSUE.

The application on plain paper, duly signed by the applicants including joint holders, in the same form as per specimen recorded with our Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars:

• Name of Issuer, being The Ugar Sugar Works Limited. • Name and address of the Equity Shareholder including joint holders • Registered Folio Number/ DP ID No. and Client ID No • Number of shares held as on the Record Date • Certificate numbers and distinctive numbers, if held in physical form. • Number of Rights Equity Shares entitled • Number of Rights Equity Shares applied for • Number of additional Equity Shares applied for, if any • Total number of Equity Shares applied for • Total amount paid on application and allotment at the rate of Rs. 8/- per Equity Share • Particulars of cheque/demand draft • Savings/Current Account Number and name and address of the bank where the Equity Shareholder will be

depositing the refund order. • PAN/GIR number, Income Tax Circle/Ward/District, PAN communication /

Form 60 / Form 61 declaration where the application is for Equity Shares of a total value of Rs.50,000 or more for the applicant and for each applicant in case of joint names

• Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of our Company.

Please note that those who are making the application otherwise than on the CAF shall not be entitled to renounce their rights and should not utilize the CAF for any purpose including renunciation even if it is received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications. Our Company shall refund such application amount to the applicant without any interest thereon.

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Last date of Application

The last date for submission of the duly filled in CAF is 02.12.2008. The Issue will be kept open for a minimum of 15 (fifteen) days and the Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date.

If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the section “Basis of Allotment”.

INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY ON ALLOTMENT SHALL BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM.

Mode of payment for Resident Equity Shareholders/ Applicants

• All cheques / drafts accompanying the CAF should be drawn in favour of “The Ugar Sugar Rights Issue A/c” and marked ‘A/c Payee only’

• Applicants residing at places other than places where the bank collection centres have been opened by our Company for collecting applications, are requested to send their applications together with a demand draft of an amount net of bank and postal charges, equivalent to the full amount of the applicable money favouring “The Ugar Sugar Rights Issue A/c” and marked ‘A/c Payee only’ payable at Mumbai directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any. Mode of payment for Non-Resident Equity Shareholders/ Applicants

As regards the application by non-resident equity shareholders, the following further conditions shall apply:

Payment by non-residents must be made by demand draft / cheque payable at Mumbai or funds remitted from abroad in any of the following ways:

Application with repatriation benefits:

So far Company has not issued shares on repatriation basis.

Application without repatriation benefits

As far as non-residents holding shares on non-repatriation basis are concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the allotment of Equity Shares will be on non-repatriation basis.

All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in favour of “The Ugar Sugar Rights Issue A/c”payable at Mumbai and must be crossed ‘A/c Payee only’ for the amount payable. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. In the absence of the above, the application shall be considered incomplete and is liable to be rejected.

New demat account shall be opened for holders who have had a change in status from resident Indian to NRI.

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Note: • In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in

Equity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961. • In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares

cannot be remitted outside India. • The CAF duly completed together with the amount payable on application must be deposited with the

Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

• In case of an application received from non-residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Payment by Stock invest

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the stock invest scheme has been withdrawn with immediate effect. Hence, payment through stock invest would not be accepted in this Issue.

Basis of Allotment

The Basis of Allotment shall be finalized in consultation with the Designated Stock Exchange in the following order of priority:

(a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, either in full or in part. (b) If the shareholding of any of the Equity Shareholders is less than four or is not in multiples of four, then the fractional entitlement of such holders for Equity Shares shall be ignored. Shareholders whose fractional entitlements are being ignored would be considered for allotment of one additional share each if they apply for additional share(s). Allotment under this head shall be considered if there are any un-subscribed equity shares after allotment under (a) above. If number of Equity Shares required for allotment under for this head are more than number of shares available after allotment under (a) above, the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange. (c ) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as rights and have also applied for additional Equity Shares. The allotment of such additional Equity Shares

will be made as far as possible on an equitable basis with reference to the number of Equity Shares held on the Record Date in consultation with the Designated Stock Exchange.

(d) Allotment to the renouncees who having applied for all the Equity Shares renounced in their favour have also applied for additional Equity Shares, provided there is surplus remaining after (a) ,(b) and (c) above.

(e) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is surplus available after making full allotment under (a), (b), (c) and (d) above.

After taking into account allotment to be made under (a) and (b) above, if there is any unsubscribed portion, the same shall be deemed to be ‘unsubscribed’ for the purpose of regulation 3(1)(b) of the Takeover Code which would be available for allocation under (c), (d) and (e) above. The Promoters of Ugar Sugar Works Limited either by itself or through its group, associated / group companies have undertaken to subscribe unsubscribed portion if the Issue does not have subscription to the extent of 90% of the Issue size, after considering the above allotment, to ensure that the Issue is successful. This acquisition of additional Equity Shares, if allotted to the The Ugar Sugar Works Limited, shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b) of the Takeover Code. Further, this acquisition of Equity Shares will not result in change of control of management of our Company.

Allocation of any additional Equity Shares shall be done by the Board or committee of the Board authorised in this behalf by the Board of our Company, in such manner as they think most beneficial to our Company and the decision of the Board or committee of the Board of our Company in this regard shall be final and binding. In the event of oversubscription, allotment will be made within the overall size of the issue. Allotment to the Promoters of any unsubscribed portion of the Issue, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time.

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Underwriting

The present Issue is not underwritten.

Allotment / Refund

Our Company will issue and dispatch letters of allotment/ share certificates/ demat credit and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of six (6) weeks from the Issue Closing Date. If such money is not repaid within eight days from the day our Company becomes liable to pay it, our Company shall pay that money with interest as stipulated under Section 73 of the Act.

Applicants residing at those centers where clearing houses are managed by the Reserve Bank of India (RBI), will get refunds through ECS only (Electronic Clearing Service) except where applicants are otherwise disclosed as applicable/eligible to get refunds through direct credit.

In case of those applicants who have opted to receive their Rights Entitlement in dematerialized form using electronic credit under the depository system, an advice regarding their credit of the Equity Shares shall be given separately. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within a period of six (6) weeks from the Issue Closing Date.

In case of those Applicants who have opted to receive their Rights Entitlement in physical form and our Company issues letter of allotment, the corresponding share certificates will be kept ready within three months from the date of allotment thereof or such extended time as may be approved by the companies Law Board under Section 113 of the Companies Act or other applicable provisions, if any allottees are requested to preserve such letters of allotment, which would be exchanged later for the share certificates. For more information please refer to the section titled ‘Letters of Allotment/ Share Certificates/ Demat Credit’ beginning on page 198 of this Letter Of Offer.

The letter of allotment / refund order exceeding Rs.1,500 would be sent by registered post/speed post to the sole/first applicant's registered address. Refund orders up to the value of Rs.1,500 would be sent under certificate of posting. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole/first applicant. Adequate funds would be made available to the Registrar to the Issue for this purpose.

As regards allotment/ refund to non-residents, the following further conditions shall apply:

In case of non-residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ or payment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of non-residents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any other disbursement, shall be credited to such accounts (details of which should be furnished in the CAF) and will be made net of bank charges/ commission in US Dollars, at the rate of exchange prevailing at such time. Our Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount into US Dollars. The share certificate(s) will be sent by registered post at the Indian address of the non-resident applicant.

Adjustment of Excess Application Money

Application money received in excess, if any, of the amount payable on application for the number of shares allotted, shall be adjusted against call money payable by such applicants and the balance if any after such adjustment only shall be refunded.

Modes of making refunds

The payment of refund, if any, would be done through various modes in the following order of preference:

1. ECS – Payment of refund would be done through ECS for applicants having an account at any of the following fifteen centres: Ahmedabad, Bangalore, Bhubaneshwar, Kolkata, Chandigarh, Chennai,

Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvanan- thapuram. This mode of payment of refunds would be subject to availability of complete bank account

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details including the MICR code as appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for applicants having a bank account at any of the abovementioned fifteen centres, except where the applicant, being eligible, opts to receive refund through NEFT, direct credit.

2. NEFT (National Electronic Fund Transfer) – Payment of refund shall be undertaken through NEFT

wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the applicants through this method.

3. Direct Credit – Applicants having bank accounts with the existing bankers of our Company shall be

eligible to receive refunds through direct credit. Charges, if any, levied by the relevant bank(s) for the same would be borne by our Company.

4. For all other applicants, including those who have not updated their bank particulars with the MICR code, refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and through Speed Post/ Registered Post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn in favour of the sole/first applicant and payable at par. Letters of Allotment / Share Certificates / Demat Credit

In case our Company issues letters of allotment, the relative share certificates will be dispatched within three months from the date of allotment. Allottees are requested to preserve such letters of allotment (if any) to be exchanged later for share certificates. Export of letters of allotment (if any)/ share certificates/ demat credit to non-resident allottees will be subject to the approval of RBI.

Option to receive Equity Shares in Dematerialized Form

Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialised (electronic) form at the option of the applicant. Our Company has entered into an agreement dated September 5, 2001 with CDSL and an agreement dated October 16, 2001 with NSDL, which enables the investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates.

In this Issue, the allottees who have opted to receive Equity Shares in dematerialised form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain space for indicating number of shares applied for in dematerialised or physical form or both. Applicants will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applicants, who do not furnish this information, will be issued the Equity Shares in physical form. No separate applications for Equity Shares in physical and/or dematerialized form should be made. If such applications are made, the application for Equity Shares in physical form will be treated as a multiple application and rejected.

The Equity Shares of our Company will be listed on the BSE.

Procedure for availing the facility for allotment of Equity Shares in this Issue in dematerialized form is as under:

• Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should carry the name of the holder in the same manner as is exhibited in the records of our Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with our Company). In case of applicants having various folios in our Company with different joint holders, the applicant will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such beneficiary account (s) with depositary participants need not comply with this step. . For Equity Shareholders already holding Equity Shares of our Company in dematerialized form as on the Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to this Issue by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may

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be noted that the allotment of Equity Shares arising out of this Issue may be made in dematerialized form even if the original Equity Shares of our Company are not dematerialized. Nonetheless, it should be ensured that the depository account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of our Company. Responsibility for correctness of information (including applicant’s age and other details) filled in the CAF vis-à-vis such information with the applicant’s depository participant, would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be the same as registered with the applicant’s depository participant.

If incomplete / incorrect beneficiary account details are given in the CAF, the applicant will be issued the Equity Shares in physical form.

The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the applicant’s depository account.

Renouncees will also have to provide the necessary details about their beneficiary account for allotment of Equity Shares pursuant to this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected. General instructions for applicants

(a) Please read the instructions printed on the enclosed CAF carefully. (b) Application should be made on the printed CAF, provided by our Company except as mentioned under the

head Application on Plain Paper and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected and the money paid, if any, in respect there-of will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the applicants, details of occupation, address, father’s husband’s name must be filled in block letters.

(c) The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting Bank

or to the Registrar to the Issue and not to our Company or Lead Manager to the Issue. Applicants residing at places other than cities where the branches of the Bankers to the Issue have been authorised by our Company for collecting applications, will have to make payment by Demand Draft payable at Mumbai and send their application forms to the Registrars to the Issue by REGISTERED POST. If any portion of the CAF is / are detached or separated, such application is liable to be rejected.

(d) PAN / GIR Number: Applications by the applicant or in the case of application in joint names, each of the

applicants, should mention his/ her PAN number allotted under the Income-Tax Act, 1961 or a communication from the Income Tax authority indicating allotment of PAN (“PAN Communication”) along with the application for the purpose of verification of the number. Applicants who do not have PAN are required to provide a declaration in Form 60 / Form 61 prescribed under the IT Act along with the application. Application Forms without PAN / GIR Number/PAN Communication/ declaration will be considered incomplete and are liable to be rejected.

(e) Bank Account Details: It is mandatory for applicants to provide information as to their savings/current account number and the name of our Company with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Application not containing such details is liable to be rejected. (f) Payment by cash: The payment against the application should not be effected in cash if the amount to be

paid is Rs. 20,000 or more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.

(g) Signatures should be either in English or Hindi or in any other language specified in the Eight Schedule to

the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested

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by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with our Company or depositories.

(h) In case of an application under power of attorney or by a body corporate or by a society, a certified true

copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Issue and to sign the application and a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above referred documents are already registered with our Company, the same need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue.

(i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with our Company. Further, in case of joint applicants who are renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant. (j) Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for

allotment of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a Non-Resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

(k) All communication in connection with application for the Equity Shares, including any change in address

of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the in house, to Company Secretary & Compliance Officer of our Company, in the case of Equity Shares held in physical form, and to the respective depository participant, in case of EquityShares held in dematerialized form.

(l) Split forms cannot be re-split. (m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled

to obtain split forms. (n) Applicants must write their CAF number at the back of the cheque / demand draft. (o) Only one mode of payment per application should be used. The payment must be either in cash or by

cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted.

(p) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated

cheques and postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against application in cash please refer point (f) above).

(q) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF. Grounds for Technical Rejections

Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

• Amount paid does not tally with the amount payable by the applicant; • In case of physical shareholders, bank account details (for refund) are not given;

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• Age of first applicant not given; • PAN Number/ Form 60 / Form 61 declaration not given; • In case of application under power of attorney or by limited companies, corporate, trust, etc., relevant

authority documents are not submitted; • If the signature of the existing Equity Shareholder does not match with the one given on the application

form and in case of renounces, if the signature does not match with the records available with their depositories;

• If the applicant desires to receive the Equity Shares in electronic form and the application form does not have the applicant’s depository account details;

• Application forms are not submitted by the applicant within the time prescribed as per the application form and the Letter of Offer;

• Applications not duly signed by the sole/joint applicants; • Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to participate in the Issue; • Applications accompanied by stock invest; • In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the applicants (including the order of names of joint holders), the Depositary Participant’s

identity (DP ID) and the beneficiary’s identity; • Applications by ineligible non-residents (including on account of restriction or prohibition under

applicable local laws) and where last available address in India has not been provided. • Multiple Applications Disposal of application and application money

No acknowledgment will be issued for the application monies received by our Company. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF.

The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without assigning any reason thereto.

In case an application is rejected in full, the whole of the application monies received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the applicant within six (6) weeks from the close of the Issue in accordance with section 73 of the Act. For further instruction, please read the Composite Application Form (CAF) carefully.

Utilisation of Issue Proceeds

The Board of Directors declares that:

(i) The funds received against this Issue will be transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Act. (ii) Details of all monies utilised out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of our Company indicating the purpose for which such monies have been utilised. (iii) Details of all such unutilised monies out of the Issue, if any, shall be disclosed under an appropriate

separate head in the balance sheet of our Company indicating the form in which such unutilised monies have been invested.

The funds received against this Issue will be kept in a separate bank account. Our Company would have no access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that the minimum subscription of 90% of the issue has been received. Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders Our Company agrees that as far as possible the allotment of the Equity Shares shall be made within thirty (30) days of the closure of Issue. Our Company further agrees that it shall pay interest at the rate of 15% per annum if the

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allotment has not been made and/or the refund orders have not been dispatched to the investors or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner within thirty (30) days from the date of closure of the Issue.

Undertakings by our Company

1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the Equity Shares to be issued pursuant to this Issue are to be listed will be taken within seven (7) working days of finalization of basis of allotment.

3 The funds required for dispatch of refund to unsuccessful applicants as per the mode disclosed shall be made available to the Registrar to the Issue by our Company.

4 Where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the investors within 42 days of closure of the Issue giving details of the bank where refunds shall be credited along with the amount and expected date of electronic credit of refund.

5 The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the specified time.

6 No further issue of securities affecting equity capital of our Company shall be made till the securities issued/offered through the Issue are listed or till the application monies are refunded on account of non- listing, etc.

7. Our Company accepts full responsibility for the accuracy of information given in this Letter of Offer and confirms that to best of its knowledge and belief, there are no other facts the omission of which makes any statement made in this Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

8. All information shall be made available by the Lead Manager and the Issuer to the Equity Shareholders at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road shows, presentations, in research or sales reports etc.

9. The Issuer and Lead Manager shall update the Letter of Offer and keep the investors informed of any material changes till the listing and trading commences.

Important

• Please read this Letter of Offer carefully before taking any action. The instructions contained in the accompanying CAF are an integral part of the conditions of this Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.

• All enquiries in connection with this Letter of Offer or accompanying CAF and requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and superscribed THE UGAR SUGAR RIGHTS ISSUE on the envelope) to the Registrar to the Issue at the following address:

BIGSHARE SERVICES PRIVATE LIMITED E/2, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri (E), Mumbai - 400 072 Tel: +91-22-404 30 200 Fax: +91-22-28475207 Website: www.bigshareonline.com E-Mail: [email protected] Contact person:Mr.Ashok Shetty • It is to be specifically noted that this Issue of Equity Shares is subject to the section entitled ‘Risk Factors’ beginning on page 6 of this Letter of Offer. Period of Subscription

The Issue will be kept open for period of sixteen (16) days or for such longer period as our Company may determine, subject to such period not exceeding thirty (30) days.

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Details of Adverse Events affecting our Company since the last financial statement

In the Opinion of Directors there have not arisen any circumstances since the date of last financial statements as disclosed on the offer document and which materially and adversely affect or is likely to affect the trading or profibility of the issuer company, or the value of its assets, or its ability to pay its liabilities within the next twelve months. Material Developments

Save as stated in the Letter of Offer, there are no material developments after the last date of last financial statements. Further there are no changes in the activities of the issuer company which may have had a material effect on the statement of profit/ loss for the five years, including discontinuation of lines of business, loss of agencies or marketing tie ups. Bottling arrangement with M/s. Tilaknagar Industries Ltd., has been discontinued and the Lease Agreements with M/s. New Phaltan Sugar Works Ltd., has been discontinued due to non-viability of these unit and The Maharashtra State Co-operative Bank Ltd., has taken over the M/s. Tasgaon Palus Taluka Shetkari Sakhar Karkhana Ltd., under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, hence our Lease Agreement is automatically terminated.

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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OUR COMPANY Shares to be under control of Director – Article 4 Subject to the provisions of the Act and the Articles, the Shares in the capital of the Company for the time being shall be under the control of the Directors who may allot or otherwise dispose of the same or any of them to such persons, in such proportion and on such terms and conditions and either at a premium or at par, or (subject to the Provisions of Section 79 of the Act) at a discount and at such times as they may from time to time think fit and proper, and with the sanction of the Company in General Meeting, give to any person the option of call for any shares either at par or at premium and during such time and for such consideration as the Directors think fit. Provided however, that the Company in General Meeting shall be entitled to make any provision or provisions as regards the offer, issue, allotment or other disposal of such shares before the issue thereof by the Directors. Sale of fractional shares – Article 6 If and whenever as a result of issue of new shares or any consolidation or sub-division of Shares, any shares become held by the members in fractions, the Directors shall, subject to the provision of the Act and the Articles and to the Directions of the Company in General Meeting if any, sell those shares which members hold in fractions for the best price reasonably obtainable and shall, after deducting the expenses of such sale, pay and distribute to and amongst the members entitled to such shares in due proportions, the net proceeds of the sale thereof. For the purpose of giving effect to any such sale the Directors may authorize any person to hold and to transfer the shares sold to the purchaser thereof and the purchaser shall be registered as the holder of the shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sales. Acceptance of Shares – Article 7 Any application signed by or on behalf of the Applicant for shares in the Company, followed by an allotment of any shares therein, shall be an acceptance of shares within the meaning of the Articles, and every person who thus or otherwise accepts any shares and whose name is on the Register of Members shall, for the purpose of the Articles, be a member. Deposits & calls etc to be a debt payable immediately- Article 8 The money (if any) which the Board of Directors shall on the allotment of any shares made by them, require or direct to be paid by way of deposit, call or otherwise, in respect of any share allotted by them, shall immediately on the entry of the name of the allottee in the Register of Members as the holder of such shares, become a debt due to and recoverable by the Company from the allottee thereof, and shall be paid by him accordingly. Instalments on shares to be paid - Article 9 If, by the conditions of allotment of any share, the whole or part of the amount or issue price thereof shall be payable by instalments, every such instalment shall, when due, be paid to the Company by the person who for the time being and from time to time shall be the registered holder of the share or his legal representative. Shares maybe issued subject to different conditions as to calls etc- Article 10

Subject to the provisions of Section 91 of the Act, the Company may make arrangement on the issue of shares for a difference between the holders of such shares in the amount of calls to be paid and the time of payment of such calls.

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Liability of members - Article 10

Every member or his heirs, executors or administrators shall pay to the Companythe proportion of the capital represented by his share or shares whichmay, for the time being, remain unpaid thereonin such amounts, at such time or times in such manner, as the Board of Directors shall, from time to time, in accordance with these presents require or fix for the payment thereof. Member’s right to certificates.- Article 18 A Notwithstanding anything contained in Article 18, the Board may in its absolute discretion refuse applications for sub division or consolidation of shares certificates into denomination of less than the marketable lot that may be decided by the board and approved by the Stock Exchange, except when such sub-division or consolidation is required to be made to comply with any statutory requirement or an order of the competent court of law. If any certificate be worn out, defaced or otherwise mutilated or rendered useless or if there be no space on the back thereof for endorsement of transfers, then, upon production thereof to the Directors, they may order the same to be cancelled and may issue, free of charge, a new certificate in lieu thereof. If any certificate is lost or destroyed, then, upon proof thereof to the satisfaction of the Directors, and on such indemnity as the Directors deem adequate being given, a new certificate in lieu thereof shall be given to the party entitled to such lost or destroyed certificate on payment of such fee not exceeding Rupee one as the Directors may determine in that behalf. Notwithstanding anything contained in the Article 19, the Board of Directors may at its discretion charge and recover the stamp duty payable on Share Certificates issued in replacement of those which are torn, defaced, lost or destroyed or issued on splitting or consolidation of Share Certificates into lot other than the marketable lot and such payment should be made by the shareholder receiving the certificate prior to the issue of Share Certificate. Calls – Article 20 (1)(2)(3) 1) The Directors may, from time to time, by a resolution passed at a meeting of the Board 9and not by resolution by Circular) make calls upon the members in respect of any moneys unpaid on their shares (whether on account of the nominal value of the Shares or byway of premium) and not by the conditions of allotment thereof made payable at fixed times. 2) Provided that no calls shall exceed one-fourth of the nominal value of the share or be payable at less than one month from the date fixed for the payment of the last preceding call. 3) Each member shall, subject to receiving at-least fourteen day’s notice specifying the time or times and place of payment pay to the Company at the time or times and place so specified, the amount called on his shares.

A Call may be revoked or postponed at the discretion of the Board.

When call deemed to be made- Article 21 A call shall be deemed to have been made at the time when the resolution of the Board authorizing the call was passed and may be required to be paid by installments. Interest on Call.- Article 22 1) If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall be interest thereon from the day appointed for payment thereof to the time of actual payment at nine percent per annum or at such lower rte, if any, as the Board may determine.

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2) The Board shall be at liberty to waive payment of any such interest wholly or in part. Amount payable on allotment or fixed date deemed call- Article 23 1) Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium shall for the purpose of these regulations, be deemed to be a call duly made and payable on the date on which by the terms of issue such sum becomes payable.

2) In case of non-payment of such sum, all the relevant provisions of these articles as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified. Call to be made on uniform basis – Article 24 Any call on shares shall be made on a uniform basis on all shares falling under the same class. For the purpose of this Article, shares of the same nominal value on which different amounts have been paid up shall not be deemed to fall under the same class.

Evidence on action for call.- Article 25 On the trial or hearing of any action for the recovery of any money due for any call, it shall be sufficient to prove that the name of the member in respect of whose shares the money is sought to be recovered is entered in the Register of the Members as the holder or one of the holders of the shares in respect of which the debt accrued at or subsequent to the date at which the money sought to be recovered became due, that the resolution making the call is duly recorded in the Minute Book of Board meetings, and that notice of such call was duly given to the members in pursuance of these Articles, and it shall not be necessary to prove the appointment of the directors who made such call, or any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt. Payment of calls in advance. – Article 26 The Board may, if it thinks fit, receive from any member willing to advance the same, all or any part of the moneys uncalled or unpaid upon any share held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance become presently payable) pay interest at such rate as the Board may decide, and the Board may at any time repay the moneys so advanced upon giving to such member three months’s notice in writing. The amount paid up in advance of call, shall not confer freight to participate in dividend or profits of the Company or any voting rights in respect of the moneys so paid until the same would, but for such payment, become presently payable. Notice of Failure to pay call - Article 27 If a member fails to pay any call or installment of a call or any money due in respect of any share, either by way of interest or otherwise, on the day appointed for payment thereof, the Board may, at any time thereafter during such time any part of the call or installment or any such money remains unpaid, serve a notice on him requiring payment of so much of the call or installment or money as is unpaid, together with any interest which may have accrued and all expenses which may have been incurred by the company by reason of such non-payment. The Notice aforesaid shall –- Article 28 a) Name a further day(not being earlier than the expiry of fourteen days from the date of service of the notice) on or before which the payment required by the notice is to be made : and b) State that, in the event of non-payment on or before the day so named, the shares in respect of which the call was made will be liable to be forfeited.

Forfeiture–- Article 29

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If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may, at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Board to that effect. Neither the receipt by the Company of any portion of any money which shall from time to time be due from any member to the Company in respect of his shares, either by way of principal or interest or otherwise, nor any indulgence granted by the Company in respect of the payment of any such money, shall preclude the Company from thereafter proceeding to enforce a forfeiture of such shares as therein provided.

Sale of forfeited share. –- Article 30

1) A forfeited share shall be deemed to be the property of the Company. A forfeited share may be sold, re-allotted or otherwise disposed of either to the original holder thereof or to any other person on such terms and in such manner as the Board thinks fit. 2) At any time before a sale, re-allotment or disposal as aforesaid the Board may annual the forfeiture on such terms as it thinks fit. Arrears to be paid notwithstanding forfeiture. . –- Article 31 1) A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall notwithstanding the forfeiture, remain liable to pay to the Company all moneys which at the date of forfeiture, were presently payable by him to the Company in respect of the shares. 2) The liability of such person shall cease if and when the Company shall have received payment in full of all such moneys in respect of the shares.

Extinction of all interest - Article 32 The forfeiture of a share shall involve the extinction of all interests in and also of all claims and demands against the Company in respect of the Share and all dividends and all other rights incidental to the share, except only such of the rights as by the Articles are expressly saved. Evidence of forfeiture - Article 33 1) A duly verified declaration in writing that the declarant is a Director of the Company or an officer authorized by the Directors, and that a share in the Company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the shares. 2) The company may receive the consideration if any, given for the share on any sale or disposal thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of and the Directors may appoint some person to execute an instrument of transfer of the shares sold. 3) The transferee shall thereupon be registered as the holder of the share. 4) The Transferee shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share and the remedy, if any, of person aggrieved by the sale shall be in damages only and against the Company exclusively.

5) Upon any such sale as aforesaid, the Certificates in respect of the shares sold stand cancelled and become null and void and of no effect and the Directors shall be entitled to issue a new Certificate or Certificates in lieu thereof to the Purchaser or Purchasers concerned Lien. - Article 35 The Company shall have a first and paramount lien upon all the Shares. (other than fully paid shares) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof for all

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moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares and no equitable interest in any share shall be created except upon the footing and condition that clause 14 hereof is to have full effect. And such lien shall extend to all dividends and bonuses from time to time declared in respect of such shares. Unless otherwise agreed the registration of a transfer of shares shall operate as a waiver of the Company’s lien if any on such shares The Directors may at any time declare any shares wholly or in part to be exempt from the provisions of this clause. The Board may sell, in such manner as it thinks fit, any shares on which the Company has a lien ; Provided that no sale shall be made ; i) Unless a sum in respect of which the lien exists is presently payable., or ii) Until the expiration of seven days after a notice in writing stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable has been given to the registered holder for the time being of the share or the person entitled thereto by the reason of his death or insolvency. Transfer of Shares Article 38. a) An application for the registration of a transfer of shares may subject to compliance with the provisions of Section 108 of the Act, be made either by the transferor or the transferee. b) Where the application is made by the transferor and relates to partly paid shares, the transfer shall not be registered unless the Company gives notice of the application registered unless the Company gives notice of the application to the transferee and the transferee makes no objection to the transfer within two weeks from the receipt of the notice.

Dematerialisation of Securities.- Article 39

1) The Company shall be entitled to dematerialize its existing shares, debentures and other securities, re-materialise its existing shares, debentures and other securities held in a Depository and or offer its fresh shares and debentures and other securities in a dematerialized form pursuant to the Depositories Act, 1996, and the rules framed thereunder, if any. 2) Every person subscribing to securities offered by the Company shall have the option to receive the security certificates or to hold the securities with a depository. Such a personwho is the beneficial owner of the securities can at any time opt out of a Depository, if permitted by law, in respect of any security in the manner provided by the Depositories Act, 1996 and the Company shall and within the time prescribed, issue to the beneficial owner the required certificate of securities. 3) Where a person opts to hold his security with a Depository the Company shall intimate such depository the details of allotment of the security and on receipt of such information, the Depository shall enter in its record the name of the allottee as the beneficial owner of the security. 4) All securities held by Depository shall be dematerialized and shall be in fungible form. 5 (a) Notwithstanding anything to the contrary contained in the Act or these Articles, a Depository shall be deemed to be the registered owner for the purpose effecting transfer of ownership of the security on behalf of the beneficial owner. (b) Save as otherwise provided in (a) above the Depository a registered owner of the securities shall not have any voting rights or any other right in respect of the securities held by it. © Every person holding securities of the Company and whose name is entered as a beneficial owner in the records of the “Depository” shall be deemed to be a member of the Company. The beneficial owner of the Securities shall be entitled to all the rights and benefits and be subjected to all the liabilities in respect of his securities held by a Depository. (d) In respect of the shares or other securities of the Company held in dematerialized form, the provisions relating to joint holders contained in these Articles shall mutatis apply to the joint beneficial owners.

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6) Every Depository shall furnish to the Company information about the transfer of securities in the name of the beneficial owner at such intervals and in such manner as may be specified by the bye-laws of the Company in this behalf. 7) Notwithstanding anything to the contrary contained in the Articles : Section 83 of the Act shall not apply to the shares with a Depository. Section 108 of the Act shall not apply to transfer of security effected by the transferor and the transferee, both of whom are entered as beneficial owners in the records of a Depository. 8) Save as herein otherwise provided, the Company shall be entitled to treat the person whose name appears in the Register of Members as the holder of any Share or whose name appears as the beneficial owner of any share in the records of the Depository as the absolute owner thereof and accordingly shall not (except as ordered by a Court of competent jurisdiction or as by law required) be bound to recognize any benami, trust or equitable, contingent or other claim to or interest in such share on the part of any other person whether or not it shall have express or implied notice thereof. But the Board of Directors shall be at liberty to register any Shares in the joint names of any two or more persons or the survivor or survivors of them. 9) The Company shall maintain a Register and Index of Members in accordance with all applicable provisions of the Companies Act, 1956, and the Depositors Act, 1996, and the rules framed there under with the details of shares held in material and dematerialized form in any media as may be permitted by law including any form of electronic media. The Register and Index of Beneficial Members maintained by Depository under Section 11 of the Depositories Act, 1996 shall be deemed to be a Register and Index of Members for the purpose of this Act. The Company shall cause to keep Register and Index of Debenture holders in accordance with the provisions of the Companies Act, 1956. The Company may also keep a Foreign Register of Members and Debenture holders in accordance with the provisions of the Companies Act, 1956. 10) In case of transfer of shares, debentures and other marketable securities where the Company has not issued any certificate and where such shares, debentures or such shares, debentures or securities are being held in an electronic and fungible form in a Depository, 1996 shall apply.

Directors may refuse to register transfer- Article 41

The Board may, subject to the right of appeal conferred by Section 111 of the Act, as its own absolute and uncontrolled discretion and without assigning any reason, decline to register or acknowledge any transfer of shares (notwithstanding that the proposed transferee be already a member), but in such a case, it shall, within two months from the date on which the instrument of transfer was lodged with the Company, send to the transferor or transferee notice of the refusal to register such transfer. Provided that registration of a transfer shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons, indebted to the Company on any account whatsoever except a lien.

Transmission of shares - Article 43

1) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time be required by Board and upon such terms as to indemnity or otherwise as the Directors may in their absolute discretion prescribe, and subject as hereinafter provided, elect, either : a) to be registered himself as holder of the share, or b) to make such transfer of the share as the deceased or insolvent member could have made. 2) The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had transferred the share before his death or insolvency

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Increase of Capital – Article 53 The Company may, from time to time, by ordinary resolution increase the share capital by such sum, to be divided into shares of such amount, as may be specified in the resolution. Conditions of Issue of new shares - Article 54 Subject to Sections 80, 81 and 85 to 90 (inclusive) of the Act, new shares shall be issued upon such terms and conditions, and with such rights and privileges annexed thereto as the general meeting resolving upon the creation thereof or any subsequent general meeting before the issue thereof, shall direct, and if no such direction is given, as the Directors shall determine, and in particular such shares may be issued with a preferential or of the Company or otherwise, and with or without any special preference shares may be issued on the terms that they are or at the option of the Company are liable to be redeemed Offer of shares to existing share holders. - Article 56 Where at any time, it is proposed to increase the subscribed capital of the Company by allotment of further shares, such further shares shall be offered to the persons who, at the date of such offer, are holders of Equity Shares of the Company in accordance in all respects with the provisions of Section 81 of the Act. Subject to the provisions of Section (1A) of Section 81 of the Act, the further shares may, notwithstanding anything contained in this Article be offered to any persons (whether or not those persons include the persons referred to in this Article or in Clause(a) of Sub-Section 81) and in any other manner whatsoever. New shares to rank with shares in original capital - Article 57 Except so far as may be otherwise provided by the Conditions of issue, or by these Articles any capital raised by the creation of further or new shares shall be considered part of the original with reference to the payment of calls and instalments, transfer and transmission, forfeiture, lien, voting and otherwise. Consolidation and Sub-division.- Article 58 Subject to the provisions of the Act, the Company may, be ordinary resolution : a) Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares ; b) Sub-divide its existing shares or any of them into shares of smaller amount than is fixed by the Memorandum, subject nevertheless, to the provisions, of clause(d) of sub-section(1) of Section 94. c) Cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person. Reduction of Capital-.- Article 59 The Company may, subject to the provisions of this Act by Special Resolution, reduce in any manner and with, and subject to, any incident authorized and consent required by law. a) its share capital ; b) any capital redemption reserve account ; or c) any share premium account. Buy Back of Shares or other specified Securities .- Article 59A Notwithstanding anything to the contrary contained in these articles and subject to the provisions of section. 77A, 77AA, 77B of the Companies Act, 1956 and the rules and regulations and or Guidelines made thereunder, the company may purchase its own shares and other specified securities in the manner and upon the conditions as prescribed in the aforesaid Act, Rules Regulations and or Guidelines, for the time being and from time to time in force.

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Powers to Modify rights - Article 60 Whenever the Capital by reason of the issue of preference shares or otherwise, is divided into different classes of shares all or any of the rights and privileges attached to any class, may subject to the provisions of Section 106 and 107 of the Act be modified, commuted, affected, abrogated, or dealt with or varied by the consent in writing of the holders of not less than three fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the issued shares of that class and all the provisions hereinafter contained relating to general meetings shall, mutatis mutandis, apply to every such meeting but so that the quorum thereof shall be members holding, or representing by proxy one-fifth of the nominal amount of the issued shares of that class. This article is not to derogate from any power which the Company would have had if this article were omitted. The rights conferred upon the holders of the shares (including Preference shares, if any) of any class issued with preferred or other rights or privileges shall, unless otherwise provided by the terms of issue of shares of that class be deemed not to be modified, commuted, affected, abrogated, dealt with or varied by the creation or issue of further shares ranking pari passu therewith. Annual General Meeting - Article 61 a) The Company shall in each year hold, in addition to any other meetings, a General Meeting as its Annual General Meeting and shall specify the meeting as such in the notices calling it ; and not more than 15 months shall elapse between the date of one Annual General Meeting and that of the next. Provided that the Registrar may for any special reason extend the time within which any Annual General Meeting shall be held by a period not exceeding three months. b) Every Annual General Meeting shall be called for at any time during business hours, on a day which is not a public holiday and shall be held either at the Registered Office of the Company or at some other place within the city, town or village in which the Registered Office of the Company may be situate Extra –ordinary General Meeting -.Article 62 All General meetings other than Annual General Meetings shall be called Extra – ordinary General Meetings. How questions decided at meeting – Article 69 Every question submitted to a General Meeting and every Resolution put to the vote of a General Meeting shall, unless a polis demanded as hereinafter provided, be decided on a show of hands Voting rights. – Article 79 Subject to any rights or restrictions for the time being attached to any class or classes of shares. a) on a show of hands, every members present in person shall have one vote ; and b) on a poll, the voting rights of members shall be as laid down in Section 87. Boardof Directors – Article 87 The number of Directors shall not be less than Nine(9) nor more than fifteen (15). Remuneration of Director- Article 92 The maximum remuneration of a Director including the Chairman of the Board of Directors shall be such sum as may be prescribed from time to time by the Act or by the Central Government, for each meeting of the Board or Committee thereof attended by him. Meeting of Directors-Article 96 The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings and proceedings as they think fit. A meeting of the Board shall be held as often as they think, but once at-least in three calendar months, and at-least four such meetings shall be held every year.

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Committee of the Board – Article 101 The Board may, subject to the provisions of the Act, delegate any of its powers to Committees consisting of such member or members of its body as it thinks fit. The meetings and the proceedings of any such committees shall be governed by the provisions herein contained for regulating the meetings and proceedings of the Directors so far as the same are applicable thereto and are not superceded by any regulations made or imposed by the Directors. Validity of the Acts of the Board – Article 102 All acts done by any meeting of the Board or of a Committee thereof or by any person acting as a Director, shall notwithstanding that it may be afterwards discovered that there was some defect in the appointment of anyone or more of such Directors or of any person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such director or such person had been duly appointed and was qualified to be a Director Power of Directors. –Article 106 1) Subject to the provisions of the Act, the Management and control of the business of the Company shall be vested in the Directors who may pay all expenses incurred in getting up and registering the company and may exercise all such powers of the company and do all such acts and things as the company is by the Memorandum and Articles of Association or otherwise authorized to exercise and do and as are not by the Act or any other Act or by the Memorandum or by the Articles or otherwise directed or required to be exercised or done by the Company in General Meeting subject nevertheless to any regulation of the Articles, to the provisions of the Act or any other Act and no such regulation being not inconsistent with the Memorandum of Association and the Articles or the Act, as may from time to time be prescribed or made by the Company in General Meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made. 2) Power to borrow Subject to the provisions of Section 292 and 293 of the Act and of these Articles, the Board of Directors may, from time to time at its discretion, by a resolution passed at a meeting of the Board (and not by a circular Resolution accept deposits from members, either in advance of calls or otherwise and generally raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. Provided that where the moneys to be borrowed together with the moneys already borrowed (apart from the temporary loans obtained from the Company’s Bankers in the ordinary course of business) exceed the aggregate of the paid up capital of the Company and its free reserves (not being reserves set apart for any specific purpose) the Board of Directors shall not borrow such moneys except with the consent of the Company in General Meeting. 5) Registration of charges The Company shall comply with the provision of the Act relating to the registration of charges which expression shall include mortgages, contained in Sections 125 to 145 (inclusive) thereof and shall also comply with the provisions of Section 150 as to the Register of Members and the provision of Sec. 152 as to the Register and Index of debenture holders. 8) Specific powers given to Directors Without prejudice to the general powers conferred by last preceding clause and the other powers conferred by these presents and so as not in any way to limit or restrict any or all of these powers, it is hereby expressly declared that the Directors shall have the following powers, that is to say, power : i) To pay the costs, charges and expenses preliminary and incidental to the promotion, formation, establishment and registration of the company ii) To purchase, take on lease or otherwise acquire for the company any property, rights or privileges whatsoever and tosell, let on lease or otherwise dispose of any such property, rights or privileges on such terms and in such manner as they shall deem experiment. iii) At their discretion, to pay for any property, rights or privileges acquired by or services rendered to the Company either wholly or partially in cash or share bonds, debentures or other securities may be either specifically charged upon all or any part of the Assets of the Company and its uncalled capital or not so charged.

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iv) To secure the fulfillment of any contracts or engagements entered into by the Company, by mortgage or charge of all or any of the property of the Company and its uncalled capital for the time being or in such other manner as they may think fit. v) To accept from any member on such terms and conditions as shall be agreed, a surrender of his share or any part thereof subject to the provisions of the Act. vi) To appoint any person or persons whether incorporate or not to accept and hold in trust for the Company any property belonging to the Company or in which it is interested or for any other purposes and to execute and do all such deeds and things as may be requisite in relation to any such trust and to provide for remuneration of such trustee or trustees. vii) To institute, conduct, defend or compound or abandon any legal proceedings by or against the Company, or its officers or otherwise concerning the affairs of the Company, and also subject to the provisions of Section 293 of the Act, to compound and allow time for payment or satisfaction of any debts due, and of any claim or demands by or against the Company. viii) Subject to the provision of Section 293 of the Act, to refer any claims or demands by or against the Company to arbitration and observe and perform the awards. ix) Subject to the provision of Section 293 of the Act, to make and give receipts releases and other discharges for the money payable to the Company and for the claim and demands of the Company. x) To determine who shall be entitled to sign on the Company’s behalf bills, notes, receipts, acceptance, endorsements, cheques, releases, contracts and documents. xi) From time to time to provide for the management of the affairs of the Company at places other than the Head Office of the Company in such manner as they think fit, and in particular to appoint any person to be attorneys or agents of the Company with such Powers including power to sub-delegate and upon such terms as may be thought fit. xii) Subject to the provisions of Section 292 and 293 of the Act, to invest and deal with any moneys of the Company not immediately required for the purposes thereof upon such securities (not being shares in this Company) and in such manner as they think fit, and from time to time to vary or realize such investments. xiii) To execute in the name and on behalf of the Company in favour of any Director or other person who may incur or be about to incur any personal liability for the benefit of the Company, such mortgages of the Company’s property present and future as they think fit, and any such mortgage may contain a power of sale and such other powers, covenants and provisions as shall be agreed upon. xiv) Subject to such sanction as may be necessary under the Act or these Articles, to give to any person employed by the Company a commission on the profits of any particular business or transaction, or a share in the general profits of the Company and such commission or share of profits shall be treated as part of the working expense of the Company. xv) Before recommending any dividend to set aside out of the profits of the Company, such sums as they think proper, for depreciation fund, sinking fund, insurance fund or any special fund to meet contingencies or for equalizing dividends or for special dividends or to repay debentures or debenture stock or for repairing, improving and maintaining any of the property of the Company and for such other purposes as Directors shall in their absolute discretion think conducive to the interests of the Company, and subject to the restrictions contained in Sections 292 and 293 of the Act to invest the several sums so set aside upon such investments and subject to the said restrictions dispose of all or any part thereof for the benefit of the Company and to divide the reserve fund into such special fund as they think fit with full power to employ the assets constituting the reserve fund in the business of the Company and that without being bound to keep same separate from the other assets. xvi) To provide for the welfare of Directors or Ex- Directors employees or ex-employees of the Company and wives, widows and families or the dependents or connections of such persons by Building or contributing to the building of houses, dwellings or by grants of money pensions, allowances, bonus or other payments or by creating and from time to time subscribing or contributing to provident and other associations, institutions, funds or trusts and by providing or subscribing or contributing towards, places of instructions and recreating, hospitals and dispensaries, medical and other attendances and other assistance as the Directors shall think fit and to subscribe or to contribute or otherwise to assist or to grant money to charitable, benevolent, religious, scientific, national or other institutions orobjects which shall have any moral or other claims to support or aid the Company either by reason of locality of operation or of the public and general utility or otherwise (xvii)Before recommending any dividend toset aside portions of the profits of the Company to form a fund to provide for such pensions, gratuities or compensation or to create any provident or benefit fund in such or any other manner as the Directors may deem fit. (xviii) To enter into all such negotiations and contracts and rescind and vary all such contracts and execute and do all such acts, deeds and things in the name and on behalf of the Company as they may consider expedient for or in relation to any of the matters aforesaid or otherwise for the purpose of the Company. xix) To do duties of treasurers and secretaries of the company, and as such Secretaries they shall carry out and discharge all duties of Secretaries including the convening of meeting, preparation of agenda, keeping of proper books and registers relating to the affairs of the Company. To prepare a profit and account and the balance sheet and

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to place before the Company in a General Meeting and to file all returns and statements with the Registrar of Companies as and in the manner prescribed by the Articles of Association of the Company xx) Out of the moneys of the Company which shall come to their hands to make all necessary and proper disbursements for the purpose of carrying on the business of the Company and shall cause true accounts to be kept of the paid up capital for the time being of the Company and all sums of money received or expanded by or on behalf of the matters in respect of which such receipt and expenditure takes place and of the credits and liabilities of the Company and generally of all its commercial, financial and of the affairs, transactions and engagements and all other matters necessary for showing its true financial state and condition and the accounts shall be kept in such books and in such manner as the Directors may from time to time decide. xxi) The Company shall pay all costs incurred in the management of the business of the Company and also all expense of maintaining a suitable registered office and staff and other servants sufficient to transact the business of the Company and the Board of Directors shall be at liberty to retain, reimburse and pay themselves out of the moneys of the Company all the costs and expenses of providing and maintaining the office and establishment of the Company the salary and wages, remuneration of experts including traveling and Board of Directors may employ their own relations or other people, and it so employed in various capacities will work as paid servants of the Company. xxii) To hold charge and custody of all the properties, books of account, registers, papers, documents and effects belonging to the Company wherever situated. xxiii) To distribute by way of bonus amongst the staff of the Company a share or shares in the profits of the Company, and to give to any officer or other person employed by the Company, a commission on the profits of any particular business or transaction, and to charge such bonus or commission as part of the working expenses of the company. xxiv) To appoint and at their discretion, remove or suspend such General Managers, Managers, Secretaries, Assistants, Supervisors, Scientists, Technicians, Engineers, Consultants, Legal, Medical or Economic Advisers, Research Workers, Labourers, Clerks, Agents and Servants for permanent, temporary or special services as they may from time to time think fit and to determine their powers and duties, and fix their salaries, or emoluments or remuneration, and to require security in such instances and to such amount as they may think fit. xxv) To delegate all or any of the powers, authorities and discretions for the time being vested in the Board of Directors and also from time to time to provide for the appointment of an attorney or attorneys, or manager for the management and transaction of the affairs of the said Company in any specified locality in such manner as they may think fit. xxvi) To draw, accept, make, endorse, negotiate and sell bills of exchange, hundies, promissory notes and bills of lading with or without security and to give effectual receipts and discharges on behalf of and against the said Company for any moneys, funds, goods or property lent to or payable or belonging to the Company. xxvii) To open Bank account and to draw cheques against the moneys of the Company and to lend, invest and deal with and employ the moneys of the Company. xxviii) To advance loans to the employees with or without securities. xxix) Generally to make all such arrangements and to do all such acts and things on behalf of the Company, its successors, and assigns as may be necessary. xxx) Subject to the provisions of sections 292, 295, 370 and 372 of the Act, to invest and/or to make loans and advances and/or to provide guarantee/s and to deal with any moneys of the Company upon such security (not being the shares of this Company), or without security and in such manner as they may think fit and to vary or realize from time to time such investments. Save as provided in section 49 of the Act, all investments shall be made and held in the Company’s own name. Managing Director/ Wholetime Director – Article 110 Subject to the provisions of Sections 197 A, 267, 268, 269, 310, 311, 314, 316, 317 and other applicable provisions of the Act and of these Articles, the Directors may from time to time appoint one or more of their body to be Managing Director / Whole time Director or Managing Directors/Whole time Directors of the Company for such term not exceeding five years at a time as they may think fit and may from time to time (subject to provisions any contract between him or them and the company) remove or dismiss him or them from office and appoint another or others in his or their place or places. The Directors may whenever they appoint more than one Managing Director, designate one or more of them as “Joint Managing Director” or “Deputy Managing Director” or “Deputy Managing Directors” and accordingly, the expression “Managing Director” shall also include and be deemed to include “Joint Managing Director” or “Deputy Managing Director” as the case may be. Custody and use of Seal- Article 114 The Board shall have power to provide a common Seal for the purpose of the Company and from time to time destroy the same and substitute a new seal in lieu thereof and shall provide for the safe custody of the seal and the

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seal shall never be used except by the authority of the Directors or Committee of the Directors previously given, and in the presence of two Directors who shall sign every instrument to which the seal is fixed and every such instrument shall be countersigned by some other officer or person appointed by the Directors. Dividends- Article 115 The profits of the Company subject to any special rights relating thereto created or authorized to be created by the Memorandum and the Articles, and subject to the provisions of these Articles, shall be divisible among the members in proportion to the amount of capital paid up on the shares held by them respectively. Capitalization – Article 131 Any General Meeting may resolve that any moneys, investments or other assets forming part of the undivided profits (including profits or surplus moneys arising from realization of any capital assets of the Company), standing to the credit of the Reserve Fund or any other fund of the Company or in the hands of the Company and available for dividend or representing the premiums received on the issue of shares and standing to the credit of the share premium account be capitalized. 1) By the distribution among the holders of the shares of the Company or any of them on the footing that they become entitled thereto as capital in accordance with the respective rights and interests and in proportion to the amounts paid or credited as paid thereon on paid up shares, debentures, or debenture – stock, bonds, or other obligations of the Company or 2) By crediting shares of the Company which may have been issued and are not fully paid up, in proportion to the amounts paid or credited as paid thereon respectively, with the whole or any part of the sums remaining unpaid thereon. And the Directors shall give effect to such resolution and apply such portion of the profits or reserve fund or any other funds as may be required for the purpose of making payment in full or part for the shares, debentures or debenture stock bonds or other obligations of the Company so distributed or as the case may be for the purpose of paying in whole or in part, the amount remaining un-paid on the shares, which may have been issued and are not fully paid up, provided that no such distribution or payment shall be made unless recommended by the Directors and if so recommended, such distribution any payment shall be accepted by such share holders in full satisfaction of their interest in the said capitalized sum. For the purpose of giving effect to any such resolution the Directors may settle any difficulty which may arise in regard to the distribution or payment as aforesaid as they think expedient and in particular they may issue fractional certificates and generally may make such arrangement for the acceptance, allotment and sale of such shares, debentures, debenture stock, bonds or other obligations and fractional certificates or otherwise as they may think fit and may make cash payments to any holders of shares on the footing of the value so fixed in order to adjust rights as may vest any shares, debentures, debenture stock, bonds or other obligations in trustees upon such trusts for adjusting such rights as may seem expedient to the Directors. In cases where some of the shares of the Company are fully paid and others are partly paid only, such capitalization may be effected by the distribution of further shares in respect of the fully paid shares and by crediting the partly paid shares with the whole or part of the unpaid liability thereon so that as between the holders of the fully paid shares and the partly paid shares the sums so applied in the payment of such further shares and in the extinguishment or diminution of the liability on the partly paid shares shall be so applied pro-rata in proportion to the amounts then already paid or credited as paid on the existing fully paid and partly paid shares respectively. When deemed requisite a proper contract shall be filed in accordance with the Act and the Board may appoint any person to sign such contract on behalf of the holders of the shares of the Company which have been issued prior to such capitalization and such appointment shall be effective. Accounts- Article 132 1) The Board shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company, or any of them shall be open to the inspection of members not being Directors. 2) No member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by law or authorized by the Board or by the Company in general meeting. Audit – Article 133 : The accounts of the Company when audited and approved by a General Meeting shall be conclusive except as regards any error discovered therein within three months next after approval thereof. Wherever any such error is discovered within that period, the Account shall forthwith be corrected and thenceforth shall be conclusive.

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Winding up.-Article 135 Subject to the provisions of the Act, if the Company shall be wound up and the assets available for distribution among the members shall be more than sufficient to repay the whole of the paid up capital the excess shall be distributed among the members in proportion to the capital paid up or which ought to have been paid up on the ordinary shares held by them respectively at the commencement of the wind shares held by them respectively at the commencement of the winding up and if the surplus assets shall be insufficient to repay the whole of the paid up capital such surplus assets shall be distributed so that as near as may be, the losses shall be borne by the members, in proportion to capital paid up or which ought to have been paid up on the ordinary shares held by them respectively at the commencement of the winding up; but this clause is to be without prejudice to the rights of the holders of classes of shares issued upon special conditions.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following Contract (not being contracts entered in to in the ordinary course of business carried on by our Company or entered into more than two years before the date of this Letter of Offer) which are or may be deemed material have been entered or are to be entered in to by our Company. These Contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of the Company situated at Mahaveer Nagar, Sangli-416 416.from 10.00 a.m. to 1.00 p.m., from the date of this Letter of Offer until the date of closure of the Subscription List.

A) MATERIAL CONTRACTS

1 Mandate Letter dated September 28, 2007 received from the Company appointing BOB Capital Markets Limited to act as Lead Managers to the Issue.

2 Memorandum of Understanding dated September 29, 2007 entered into with the Lead Managers to the Issue.

3 Memorandum of Understanding dated October 15, 2007 entered into with the Registrars to the Issue. 4 Memorandum of Understanding dated September 09, 2005 between Sadashiva Sugars Ltd, our company and promoters of our company. 5. Agreements of Company with CMD/WTD/ED regarding renumeneration. B) DOCUMENTS 1 Memorandum and Articles of Association of the Company. 2 Certificate of Incorporation of the Company dated September 11, 1939. 3 Copy of Letter of Offer for Rights Issue in the year 1998. 4 Copy of the resolution passed at the meeting of the Board of Directors held on August 18, 2007

approving this Issue. 5 Consents of the Directors, Company Secretary, Auditors, Lead Manager to the Issue, Bankers to

the Issue and Registrars to the Issue, to include their names in the Letter Of Offer to act in their respective capacities. Letter dated October 24, 2008 from the Auditors of the Company confirming Tax Benefits as mentioned in this Letter Of Offer.

6 The Report of the Auditors, M/s P.G.Bhagwat as set out herein dated October 24, 2008. 7 Annual Report of the Company as also that of Subsidiaries (wherever applicable, if any) for the last five Financial years. 8 Copies of the initial listing application made to the Stock Exchanges. 9 Letter No. CFD/DIL/PB/RA/135729/2008 dated August 22, 2008 issued by the Securities and Exchange Board of India for the Issue. 10 Due Diligence Certificate dated January 25, 2008 from BOB Capital Markets Limited 11 Tripartite Agreement dated October 16, 2001 between The Ugar Sugar Works Limited,

Big Share Services Pvt. Limited & NSDL for offering depository option to the investors. 12 Tripartite Agreement dated September 5, 2001 between The Ugar Sugar Works Limited, Big

Share Services Pvt. Limited Limited & CDSL for offering depository option to the investors. 13 Techno Economic Viability Report of August 2006 prepared by MITCON Consultancy Services Ltd 14 Term Loan sanction letter dated 25.09.2006 from State Bank of India 15 Term Loan sanction letter dated 09.10.2006 from State Bank of Mysore 16 Term Loan sanction letter dated 15.11.2006 from State Bank of Indore 17 Updated deployment certificate dated 22.10.2008 18 Auditor certificate with respect to loan obtained fron Bank of India. 19 Auditor Certificate in respect of compliance of AS 23.

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DECLARATION

No statements made in this Letter of Offer shall contravene any of the provisions of the Companies Act, 1956 and the rules made there under. All the legal requirements connected with the said issue as also the guidelines, instructions etc. issued by SEBI, Government and any other Competent Authority in this behalf have been duly complied with.

The Company accepts no responsibility for statements made otherwise than in the Letter of Offer or in the Advertisement or any other material issued by or at the instance of the Company and that any one placing reliance on any other source of information would be doing so at their own risk.

The Directors of the Issuer Company certify that all the disclosures made in the Letter of Offer are true and correct. Yours faithfully,

For The Ugar Sugar Works Limited

Mr.R.V. Shirgaokar Chairman & Managing Director Sd/- Mr. P.V. Shirgaokar Executive Director Sd/- Mr. Shishir S. Shirgaokar Wholetime Director Sd/- Mr. V. Balsubramanian Director Sd/- Mr. M.B. Karmarkar Independent Director Sd/- Mr. S.N. Inamdar Independent Director Sd/- Mr. B.N.Kalyani Independent Director Sd/- Mr. D.B. Shah- Independent Director Sd/- Mr. M.G. Joshi Independent Director Sd/- Mr. M.R. Desai Independent Director Sd/- Mr. A.B. Kage Independent Director Sd/- Mr. B.S. Patil Director Sd/- Sd/- Mr. B.G. Kulkarni – Company Secretary …………………… Sd/- Mr. R.V. Desurkar – Finance Manager ………………………

Place : Pune Dated : 24/10/2008

FLO_RightsIssue.pdf - Ugar Sugar

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Transcript of FLO_RightsIssue.pdf - Ugar Sugar