We are glad to report a steady improvement in the companys financial performancefor the year 2015-16. This has been possible through a combination of favourable marketconditions and improved internal efficiencies. CommoditypricesinbothChemicals and Sugarbusinesses edged up to reflect their true cost of production. Realistic and proactivegovernment policies ensured that the Sugar Industrys health was restored and allsegments in its value chain benefited. Consistent policies in the future are key to thelong term growth of this industry. Given that both sugar and chemicals are traded freelyacross the world cost competitiveness continues to be a focus area for us; and thereforeour effort is to consistently be the least cost producer. The Agri Inputs business Fertilizers Bioseed and Shriram
Farm Solutions were adversely affected due to unfavorable weather conditions forthe second year in succession. Business swings were minimized through rigorous planningand limiting exposure to high inventory. It is hoped that the 2016 monsoon would befavourable as predicted; it will raise the growth prospects for the agri-input industry aswell as improve farmer incomes. We continue to focus on strengthening our product offeringled by strong in-house research and market development activities to achieve high growthin these businesses.
We are happy to report that our Fenesta Windows business achieved PBT breakeven duringthe year. We are focusing on strong customer engagement and product innovation to drivevolume growth in this business.
We are undertaking a total capital investment of Rs.725 Crores in Chemical and Sugarbusinesses for long term growth and improvement in cost structures. Chemicals businesswill see substantial enhancement in capacity which will contribute to increasing both thetop and bottom line. In Sugar co-gen capacity is being added for improving businessviability. All the projects will be fully commissioned in during the second half of the2016-17.
A large part of the Capex is being financed through internal cash accruals and debtlevels have been kept at prudent levels. With efficient cash management it has beenpossible to lower finance charges by approximately 20% as compared to last year.
During the year the company successfully implemented the State of Art businessoperation software S4/HANA. This is the latest platform launched by SAP worldwide and itwill provide a competitive edge across all businesses.
Our employees are our biggest resources and we continue to invest to further improvetheir competencies. The Companys endeavor has always been to foster an environmentwhich promotes innovation learning and development which will lead to growth of thecompany and employees.
Your company remains committed towards ensuring highest standards of CorporateGovernance. We continue to adopt best practices to ensure highest levels of accountabilityand transparency.
As a responsible corporate citizen we are conscious of the need to give back tosociety. We are actively engaged in several initiatives in this direction with particularemphasis on education water conservation skill development and improving rural incomes.We would like to take this opportunity to thank our stakeholders members of theboard business associates employees suppliers government agencies lenders andshareholders who have contributed to the growth and development of our company overthe years. With their cooperation we are confident of delivering superior value to allstakeholders.
With best wishes
|(Vikram S. Shriram) ||(Ajay S. Shriram) |
|Vice Chairman & Managing Director ||Chairman & Sr. Managing Director |