shree hanuman sugar industries ltd share price Management discussions


During the year under review Company’s Sugar Mill at Motihari, Bihar, remained nonoperational, and closed due to various factors, which mainly included cost ineffectiveness due to old plant and machinery, financial crunch and labour unrest at the Mill.

The management has been taking drive for making the unit operational and wants to undertake up- gradation programmed to make it cost effective at the cost of around 12.50 crores. The up-gradation programme is planned to be part-financed out of Term Loan from Banks/Institutions.

The up-gradation programme involves overhauling, up-gradation and addition of some balancing equipments to ensure immediate achievement of break-even point because of improvement in operational efficiency by way of high productivity, lower cost of production and improvement in quality of sugar, leading to higher sales realizations in the next five years.

The Company also has plans to expand its construction activities by undertaking housing as well as commercial projects.

SEGMENTWISE PERFORMANCE

Presently, the Company mainly deals in following segments:

I. Sugar

II. Construction

Segment Reporting as per note no. 22(2) of the Notes of Accounts.

RISKS & MITIGATIONS Industry risk

The Company’s growth is largely dependent on the growth of the sugar industry.

However, India’s low per capita sugar consumption compared with a global trend provides enough room for growth in the sector. Further, since sugar is an essential and preferred sweetener, it seldom faces any slackening demand in the country.

Raw material risk

Rising sugarcane prices and non-availability could adversely affect the Company.

However, Company’s Sugar Mill is located in the cane-rich areas of Bihar and its focused cane development team encourages farmers to enhance yield and plantation acreage. The proposed sector de-controls in terms of introducing the Fair price mechanism for purchase of raw material will adequately help the ailing industry to recover. Moreover, the proposed revenue-sharing formula by the Rangarajan Committee will ensure cane prices are fixed at 75 percent of the sugar price realization, strengthening the Industrys global competitiveness.

Cyclicality risk

Operating in a cyclical business, weak operational efficiency could affect profitability.

The Company’s immediate future plans to invest in its ancillary business, co-generated power by using by-product baggage and distillery plant, will impart a robust competitive edge to protect fortunes from cyclicality. Moreover, its infrastructure, which is suitable for 15000 TCD capacity, will enable the Company to run its assets beyond the sugar season.

Regulatory risks

Unfavorable government policies could derail business plans.

The government constituted the Rangarajan Committee to progressively de-control the sugar sector.

INTERNAL CONTROL SYSTEMS THEIR ADEQUACY

Our Company has a proper and adequate system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that the transactions are authorized recorded and reported correctly. The Internal control system is designed to ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets. There is an elaborate internal audit system which is done by Independent firm of Internal Auditors. Their reports on the internal controls and their adequacy are regularly discussed with the Management and corrective measures wherever required, are taken and continuously monitored.

The Audit Committee of the Board meets regularly to review the adequacy of internal controls; internal audit findings and the corrective actions are taken, if necessary. The Management is reasonably satisfied about the adequacy of these internal control systems.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Revenue

The Total Income during the year under review, stood at Rs. 20.41. lacs as against Rs. 21.48 lacs in the previous Financial Year.

Profits/(Loss)

Loss before Interest, Depreciation and Tax stood at Rs. 5975.95 lacs, showing a increase from previous financial year which stood at 47.10 lacs. Loss after Tax was registered at to Rs. 5975.95 lacs, compared to 47.10 in the previous financial year. Total Comprehensive Income stood at Rs. 7,570.00 lacs compared to total Comprehensive Loss stood at 47.10 in the previous financial year.

Earnings per Shares (EPS)

The Company recorded an EPS of Rs. 40.92 per equity shares of Rs. 10/- each during 2021-22.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT

A cordial industrial relations environment prevailed in the Company during the year, barring witness of recent agitation by workers to enforce their own demands. There was constant focus on all rounds organizational development. Regular promotions are granted and succession plans are effectively implemented. Our system of compensation is as per the market trends and job requirements. Other benefits to employees are provided for motivation.

CAUTION STATEMENT

The above mentioned statements are only "forward looking statements" based on certain assumptions/expectations. The Company’s actual performance could differ materially from those expressed/projected depending upon changes in various factors. The Company does not assume any responsibility to any change(s) in "forward looking statements", on the basis of subsequent development, information or events etc.

For & on behalf of the Board
SHREE HANUMAN SUGAR & INDUSTRIES LIMITED
Sd/-
Place: Kolkata Leonard Carvey
Date: 31.08.2022 Whole Time Director
DIN:08958275
Sd/-
Chinmoy De
Director
DIN:09057498