Shree Hanuman Sugar & Industries Ltd Management Discussions

During the year under review Companys 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 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

Geographical and Procurement Risks

The Company is exposed to various geographical and procurement risks on account of distance between its unit and cane fields and non-availability of adequate sugarcane.

However, Companys 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. Currently the cane development activities are suspended due to non-operational factory unit. 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.

Industry risk

The Companys growth is largely dependent on the growth of the sugar industry.

However, Indias 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.

Credit, Liquidity and Financial risk

Operations of company are suspended since 2014, hence major risks of Credit, liquidity and financial risk due for management by the company are restricted to outstanding balances in the books which are primarily non moving.

Company does not have any operational debtors outstanding balance, hence the trade credit risk is absent.

Financial and Liquidity risks are restricted to the outstanding loan balances which are not being repaid.

Regulatory risks

The sugar industry is regulated by the Central and State Governments. Sugar cane price, known as FRP, is fixed by the Central Government well before the start of the season while the State Government fixes the State Advised Price (SAP), always significantly higher than FRP. The State Government controls the sugar cane command area while the Central Government regulates Exports and Imports.

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

No Income during this financial year under review, and in the previous financial year.

Profits/(Loss)

Net Loss after Tax was registered at Rs. 26.44 lacs as against Net Loss after Tax of Rs. 715.39 lacs in the previous financial year.

Total Comprehensive Loss stood at Rs. 23.44 lacs compared to total Comprehensive loss of Rs. 731.36 lacs in the previous financial year.

Earnings per Shares (EPS)

The Company recorded an EPS of Rs. (0.13) per equity shares of Rs. 10/- each during 2023-24.

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 Companys 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.