Dear Shareholders

On behalf of Avadh Sugar & Energy Limited it's my pleasure to address you on theclose of the Financial Year 2018 - 19 of your company. We sincerely thank you all for yoursupport during the challenging phase of the industry and company. Proactive policymeasures and a pragmatic approach to peculiarities of the industry will help the companyand its shareholders to tide over difficult times.

Indian economy started the fiscal year 2018-19 with a healthy 8.2 percent growth in thefirst quarter ofthis year.The economy faced some challenges like the Indian Rupee sufferedbecause of the crude price increase and conditions exacerbated as recovery in someadvanced economies caused faster investment outflows. Despite softer growth the Indianeconomy remains one of the fastest growing and possibly the least affected by globalchaos. The Indian economy is projected to grow at the range on 7 per cent to 7.5 per centfor the year ahead. Growth would be backed by rise in consumption and a gradual revival ininvestments especially with a greater focus on infrastructure development added by theimproving macroeconomic fundamentals are improving backed by implementation of reformswhich would boost the investments and ease banking sector concerns. India has become thesixth-largest economy and it is marching towards achieving the position of the fifthlargest economy in the world.

Government's rightful measures and active support towards revival in the sugar industryfollowed by India's strong growing rural consumption will help the Indian sugar industryin the coming future.

Industry Insight

Sugar output is expected to reach 33.0 mn tonnes in SS 2018-19. and is set to exceedIndia's annual demand by 8.0 mn tonnes. The Government has initiated various proactivesteps to support the sugar millers. Centre revised Sugar Minimum Selling prices (MSP) by7% from its current level of Rs 29 per kg to Rs 31 per kg a major step towards pushing upsugar industry. The government had set a sugar export quota of 2.0 mln tonnes for the2017-18 (October/September) season under the Minimum Indicative Export Quota (MIEQ) schemein order to clear surplus stocks and improve the cash flow to millers for making paymentto sugarcane farmers. The subsidy (INR 45 / tonne) was paid directly to farmers on behalfof the mills and adjusted against the cane price payable to the farmers towards the Fairand Remunerative Price (FRP) including arrears relating to previous years. Governmentfixed export target of 5 million tonnes of sugar in current sugar season 2018-19 byallocating mill-wise minimum indicative export quotas (MIEQ) which was at 2 million tonnesof sugar in sugar season 2017-18 which would aid to improve the liquidity of sugar mills.Focus to encourage ethanol production is a major step towards addressing the glut in thesugar industry. Ethanol production will help millers to drive their profitability. Sugarbeing a cyclical industry is governed by several external variables has its share ofheartaches and its fate is determined by the Government in power.

Business Performance

The Company has faced numerous challenges in this fiscal which it being a fullyintegrated sugar player we were able to withstand the headwinds. At the end of second halfof this fiscal we saw a slight revival in the sugar industry which also reflected incompany's performance; we believe government's support for sugar millers and focus onincreasing ethanol blending will continue to improve the company's performance goingahead.

During FY19 our revenue stood at Rs. 2133.68 crores against Rs. 2372.57 in FY18Operating profit stood at Rs.154.37 crore in FY19 against Rs. 114.24 in FY18 and ProfitAfter Tax was at Rs.119.87 in FY19 as against Rs.88.16 in the same period last year.

Our Core Strategies

Avadh Sugar and Energy Limited a conglomerate has a strong essence of values forbuilding a strong and sustainable company. Our core business philosophy is based on strongprinciples we always with day to day business activities take under consideration tofulfill the aspirations of farmers customers employees financers and the society atlarge; to excel in the manufacturing of sugar and allied products. We manage our businessaround responsible governance practices; employees being the most valuable asset weprovide opportunity for employees and business associates to realize their full potential.We keep in consideration growth of all its stakeholders with the growth of the company.Another focus area in FY18 is to achieve fiscal discipline and operational efficiencies.

Way Forward

Government's focus on increasing ethanol blending and changing market dynamics willhelp to curtail the glut situation in the country. We are well positioned to grasp themarket opportunities which will help us enhance our performance in imminent years. Severalinitiatives have already been taken early results of which we are already witnessing.

Warm regards

Nandini Nopany

Chairperson