Piccadily Agro Industries Ltd Management Discussions

The Indian Sugar Mills Association (ISMA) has cut its estimate to 32.8 MT from the earlier estimate of 34 MT sugar production in the country dipped over 8 per cent to 32.1 Million Tonnes (MT) until May 15 in the current sugar season (October 2022-September 2023) against 34.92 mt in the previous season, industry sources said. nearly 500 mills have closed their operations, while 37 factories are still continuing with crushing (as on May 15), including 16 mills in Tamil Nadu and 15 units in Uttar Pradesh,

Sugar Availability

Sugar season 2022-23 started with opening stock at 70 Lac Tons. All India Production is estimated at 328 Lac Tons and the closing stock is estimated to be around 61.5 Lac Tons Sugar Exports

Indian sugar mills exported entire quota of 6.1 million tonnes against a record 11 million tonnes of sugar in the previous year 2021-2022 season, but government allowed exports of only 6.1 million tonnes in the current year due to an unexpected drop in production. Indian mills have shipped out the entire 6.1 million tonnes of sugar allowed for exports,

Ethanol

India will achieve 20% ethanol-blended petrol target by 2025. The blending of ethanol with petrol has increased to 10 per cent in 2021-22 from just 1.53 per cent in 2013-14.The supply of ethanol to oil marketing companies (OMCs) increased to 408 crore litre in 2021-22 from 38 crore litre in 2013-14.. Also, the ISMA said that it sees Indias sugar mills diverting 4.5-5.0 MMT of sugar to ethanol production in 2022-23.

Distillery

The Excise & Taxation Department of Haryana in its Excise Policy for the year 2022-2023 has fixed the sale price of country Liquor (Ex Distillery issue price) as per following details:

Year	Sale Price for country Liquor
	Quart	Pint	Nip
2022-23	301	322	360
2023-24	301	322	360

The company has introduced new brands viz Kamet & Indri Trini (Single Malt Whisky) in Indian made Foreign Liquor (IMFL) in the market, which are receiving tremendous response in the national as well as international market.

Segment wise performance is under:

(Rs.in Lacs)

Particulars	Amount
Sugar	27462.50
Distillery	36172.25
Total	63634.75

Opportunities & threats

1) The incidence of certain insect pests such as Top Borer, Early Shoot Borer etc. in sugar cane crop has increased over last one year. The major impact of Top Borer is seen in Cane Variety CO-238 which occupies the major portion of Companys cane area. Efforts are being made to control its incidence by integrated pest management techniques and also replacing the CO-238 cane variety in the coming years so that its impact in Companys command area is minimize.

2) Sugar consumed in moderation is a part of a healthy, balanced lifestyle. While this is a fact, there is a lot of misinformation floating all around making ‘sugar the villain and blaming it solely for some lifestyle diseases. This negative perception around sugar is unfortunately spreading like wildfire amongst the gullible and misinformed masses in our country. There is absolutely no scientific evidence or any research paper which concludes or establishes that consumption of sugar in itself leads to any particular disease, be it diabetes, obesity or dental caries.

3) Government guideline regarding drinking is injurious to health was effect the revenue of the company.

Out Look / Projection:

The companys projection on crushing of sugarcane for the current year 2022-23 is 70 lacs quintals and production /sale of 60 lac cases of country liquor.

Risk and Concern

The steep escalation in the prices of sugarcane & raw materials will adversely affect profitability of sugar mill & other products of the company.

Competition from the other distilleries in the state of Haryana may affect the sale of Country Liquor.

Internal Control System & their Adequacy

The auditor have felt that the company has a reasonable system of authorization at proper levels with necessary controls on the purchase of sugar cane, issue of materials and components & other related system of Internal control is commensurate with the size of the company. They also felt that the company has a reasonable system of recording receipts of raw materials and components and the company is recording the sales and purchase through the software. The Software engineers regularly check software programme.

Material Development in HRD/IR

The company has appointed regular staff of 324 persons in various departments along with contractual & seasonal staff for the efficient working of all the units of the company.

Other Key Indicators

DETAILS OF SIGNIFICANT CHANGES (i.e. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE:

Sr. No. Particulars	2022-23	2021-22	% Increase /Decrease	Explanation For Change
i Debtors Turnover Ratio	10.63%	11.40	(6.77)	-
ii Inventory Turnover Ratio	2.59	2.57	0.47	-
iii Interest Coverage Ratio	3.74	4.03	(7.20)	-
iv Current Ratio	1.07	1.06	1.10	_
v Debt Equity Ratio	0.67	0.65	2.08	Due to increase in the amount of GECL provided by Government of India to counter CoVID-19
vi Operating Profit Ratio (%)	7.44	9.59	(22.41)	Due to increase in Turnover
vii Net Profit Ratio (%)	3.88	5.10	(23.91)
viii Change in Net Worth Ratio (%)	10.29	11.91	(13.56)	--