[Pursuant to Regulation 34 (3) read with Schedule V of SEBI (LODR) Regulations, 2015]
1. INDUSTRY STRUCTURE AND DEVELOPMENTS:
Sugar Industry is the second largest agro-based industry in India. It contributes
significantly to the socio economic development of the nation. It impacts the livelihood
of large number of farmers and their dependents. This industry is very incomparably
self-reliant. Over the years it has proven to be one of the largest contributors to a
nations economy. The sustainability of Sugar Industry in India is largely dependent on
supply and demand which often used to mismatch on account of its cyclicality. Sugarcane
and sugar production are seasonal with substantial production cycle witnessed in the
months of October to April.
The cyclic and seasonally driven factors in the industry are highly dependent on a
stable Government policy and favourable sugar market dynamics which can aid towards
improving sugar profitability. The Government has been in concerting efforts by
encouraging diversion of excess sugarcane and sugar to ethanol for blending purposes which
not only reduce import dependency on crude oil, but promote ethanol as a fuel that is
indigenous and environment-friendly and will also enhance the income of sugarcane farmers.
Government of Indias thrust for ethanol production will enable the sugar millers to
divert surplus sugar towards ethanol manufacturing, thus reducing the cyclically in sugar
business.
The Industry has also invented manufacturing of Green Manure for application in
agricultural fields in order to improve soil fertility and soil health management by
partially removing the application of inorganic fertilisers. This Green Manure called bio
compost is obtained from a waste product while manufacturing sugar namely, press mud.
Several micro nutrients and treated bio waste obtained from distillery effluent are
applied on the said press mud to convert the same as Green Manure. This is gaining more
importance in India as the said Green Manure has proven the improvement of soil fertility
and development of eco-friendly atmosphere.
2. OPPORTUNITIES AND THREATS:
(i) Opportunities:
The long term outlook for Sugar Industry remains positive and promising on account of:
• Growing robust and sustainable demand of ethanol will boost the revenue and
profitability of Sugar Mills;
• Environmental friendly method of power generation adopted by Cogeneration Units
equipped with high-pressure boilers and turbines intelligently uses the fuel to get
optimum energy output;
• Emphasize on bio-composting process by converting distillery discharge into
organic matter combining with press mud for application in agriculture to enhance the
fertility of the soil; and
(ii) Threats:
The Sugar industry is at present confronted by the following threats;
• Risk of surge in sugar cane prices and harvesting expenses.
• Rising fuel prices and inadequate tariff would limit the prospect for standalone
power production during off-season.
• Stressed finances and realization challenge for power dues.
• Rise in transportation costs could affect sugarcane growing and pricing.
• Cyclical nature of Sugar Industry and local climatic conditions will have an
effect on the quantity and quality of sugar cane and result in uncertain Production Output
& Short crushing season; and
3. PRODUCT WISE PERFORMANCE:
(i) Sugar :
SEASON WISE PARTICULARS
Nature of Particulars |
2022 -2023 |
2021 -2022 |
Crushing commenced on |
07/12/2022 |
08/12/2021 |
Crushing completed on |
06/03/2023 |
01/03/2022 |
No. of Days |
90 |
83 |
Cane Crushed (in MT) |
468743.13 |
421199.49 |
Sugar Bagged (in Qtls) |
422757 |
387796 |
Recovery (in %) |
9.02 |
9.22 |
Cane Price Paid (besides incentives and developmental activities) (in
Rs.) |
2,966 |
2,900 |
FINANCIAL YEAR WISE PARTICULARS
Nature of Particulars |
For the Financial Year ending |
|
31/03/2023 |
31/03/2022 |
Season (From / To) |
07/12/2022 to 06/03/2023 |
08/12/2021 to 01/03/2022 |
No. of Days |
90 |
83 |
Cane Crushed (in MT) |
468743.13 |
421199.49 |
Sugar Bagged (in Qtls) |
422757 |
387796 |
Recovery (%) |
9.02 |
9.22 |
(ii) Other Products:
Distillery Unit produced 44.76 Lakh Litres of Industrial / Anhydrous Alcohol for the
year ended 31/03/2023 as against 71.14 Lakh Litres during the previous financial year. The
said Unit sold 44.21 Lakh Litres of Industrial / Anhydrous Alcohol valued at Rs.2547.97
Lakhs during the year under review as against 74.15 Lakhs Litres valued at Rs.3822.00
Lakhs during the previous year.
Cogeneration Unit produced 21,120 MW of Power during the year under review as against
20,507 MW of Power in the previous year. Total Export of Electrical Energy is 6,160 MW
resulting in Turnover of Rs.323.38 Lakhs during the year under review was against 6,892 MW
at a Turnover of Rs.379.90 Lakhs during the previous year.
Calcium Lactate Plant contributed Rs.384.07 Lakhs towards the Turnover of the Company
during the year under review as against the Turnover of Rs.407.00 Lakhs during the
previous year.
Bio-Fertiliser Plant contributed Rs.738.19 Lakhs towards the Turnover of the Company
during the year under review as against the Turnover of Rs.696.57 Lakhs during the
previous year.
Engineering Division contributed Rs.910.82 Lakhs towards the Turnover of the Company
during the year under review as against the Turnover of Rs.494.42 Lakhs during the
previous year.
The Company has started processing of Urad Dal from January 2023.
4. FUTURE OUTLOOK:
The future outlook of Sugar Industry would depend on the following:
• Foresee opportunities in Ethanol production as Escalating ethanol price could
more likely prompt relatively lower cane mix for sugar;
• To develop high breed varieties of sugarcane suitable for Indian climatic
conditions and focus on vertical growth in sugarcane productivity;
• Invention of suitable sugarcane harvesting machine for Indian soil conditions
and operable in fragmented land holdings;
• Sugar recovery should stay firm while product prices are expected to stay
supportive.
• Swift adaptation of new cultivation method suitable for mechanised harvesting;
• Agro-climatic conditions in major sugar-producing States; and
• Permitting Green Energy producers to market directly to third parties.
5. RISK MANAGEMENT:
The Company has an effective Risk Management System under which all probable risks are
periodically identified, assessed and acted upon to minimize and mitigate their impact.
These processes are subject to periodical review by the Management. Some of the risks
identified are enumerated below:
(i) Raw Material Risk:
Sugarcane being the main raw material for sugar, any disturbance in its timely
availability will have a substantial impact on the operational cost. This in turn will
have a significant adverse effect since the market value does not factor the variable cost
determined by the climatic conditions and the cane economics.
Mitigation Measure:
The Company always maintains a healthy relationship with its farmers. It is one among
very few companies in Sugar Industry, paying its farmers within the stipulated time. The
risk of short supply of raw material is mitigated to a larger extent by the goodwill and
reputation for ethical dealings earned by the Company since inception. The experiments in
farm mechanization, drip irrigation, improved cane varieties, carefully monitored
scheduling of cane planting and harvesting boost the confidence of the Company in
mitigation of the risk.
(ii) Policy Risk:
The Sugar Industry is highly regulated by the Government of India by retaining the
respective State Governments as monitoring agencies. Therefore, the performance of the
Sugar Mills will depend on the policy decisions taken by such authorities from time to
time.
Mitigation Measure:
The Company is a member of South India Sugar Mills Association (SISMA). The Company
works closely with SISMA in the matter of developing appropriate policy recommendation to
the Government in line with the Industry needs. Formulation of policy on ethanol doping,
review of cogeneration policy and review of sugar weightage in WPI are some of the issues
addressed in close liaison with SISMA.
(iii) Cyclicality / Commodity Risk:
The sugar price mainly depends on the cyclicality of the sugar business which in turn
affects the profitability. Sugar being a commodity traded across the world, its price is
influenced by the various factors including the normal supply and demand.
Mitigation Measure:
The Company focuses on value-added downstream products and integrates sugar with
electricity and alcohol thereby insulating itself against price risk.
5. INTERNAL FINANCIAL CONTROL SYSTEMS:
Internal financial controls laid down by the Board of Directors of the Company are
adequate and operating effectively. The Company has a well-established internal control
system in place to ensure smooth functioning of operations. The control mechanism involves
well-documented policies, authorisation guidelines commensurate with the level of
responsibility and standard operating procedures. The Internal Auditor periodically
reviews and makes continuous assessments of the adequacy and effectiveness of the internal
control systems. The Board of the Company, Audit Committee and the Management review the
findings and recommendations of the Internal Auditor and take corrective action wherever
necessary. The Company is committed in its endeavor to ensure an effective internal
control environment that provides assurance on the effectiveness of operations, statutory
compliances and reliability of financial reporting and security of assets.
6. HUMAN RESOURCES AND INDUSTRIAL RELATIONS:
As on 31/03/2023, the number of Employees on roll including Seasonal Employees is 549.
The human resource is an important asset which has played pivotal role in the
performance and growth of the Company over the years. We aim to nurture careers and give
recognition to each employees efforts and performance. The relationship with employees of
the Company continued to be harmonious and congenial during the Financial Year under
review. The Company ensures high standards of safety for its employees and periodically
conducts meetings to minimize operational hazards. The Company believes that Employees are
the key to success and hence the Company proactively develops innovative and business
focused methods to attract, motivate, develop and retain talented and competitive
manpower.
7. FINANCIAL PERFORMANCE vis-a-vis OPERATIONAL PERFORMANCE:
All relevant information with regard to financial and operational performance of the
Company is as provided in Page No. 3 of this Annual Report.
// BY ORDER OF THE BOARD //
Place : Chennai |
VINOD R.SETHI |
Date : 29/05/2023 |
EXECUTIVE CHAIRMAN DIN:00106598 |
+91-9892691696
