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Dharani Sugars & Chemicals Ltd.

BSE: 507442 Sector: Agri and agri inputs
NSE: DHARSUGAR ISIN Code: INE988C01014
BSE LIVE 15:40 | 24 Nov 32.25 -0.90
(-2.71%)
OPEN

34.00

HIGH

34.00

LOW

31.00

NSE 15:57 | 24 Nov 32.25 -1.15
(-3.44%)
OPEN

33.50

HIGH

33.50

LOW

31.90

OPEN 34.00
PREVIOUS CLOSE 33.15
VOLUME 23080
52-Week high 43.40
52-Week low 20.80
P/E
Mkt Cap.(Rs cr) 107
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 34.00
CLOSE 33.15
VOLUME 23080
52-Week high 43.40
52-Week low 20.80
P/E
Mkt Cap.(Rs cr) 107
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dharani Sugars & Chemicals Ltd. (DHARSUGAR) - Chairman Speech

Company chairman speech

1995 DHARANI SUGARS AND CHEMICALS LIMITED CHAIRMAN'S SPEECH I have great pleasure in welcoming you all to this Eighth Annual General Meeting. The Report of the Directors and the Audited Accounts for the year ended 31st March 1995 have been with you for some time now and therefore I seek your permission to treat them as read. YEAR IN REVIEW The year ending March 1995 has proved to be the best in your Company's history both in terms of physical and financial performance. The Company crushed 6.30 lakhs metric tonnes of cone during the year under review which is the largest quantity handled by your Company since commissioning in 1989-90. This also registered nearly 200% increase over last year's crushing figure of 2.11 Lakh metric tonnes. The total income increased by 177% and reached Rs. 6424 Lakhs as against Rs. 2319 lakhs for the year 1993-94. Profit after tax has reached a record figure of Rs. 648 lakhs registering an increase of 214% over previous year's profit of Rs. 207 Lakhs. This spectacular achievement is the result of your Company s sustained cane development efforts coupled with a favourable monsoon and the efficient management of resources by the dedicated team of your employees. DIVIDEND I believe that shareholder value is a combined function of growth and profitability. The year under review being a milestone year of performance, your Directors have recommended a handsome dividend of 25%, subject to your approval as against 20% in 1993-94. INDUSTRY POSITION India has emerged as one of the largest producers of Sugar in the world accounting for 12.4% of world's total Sugar production. However, we continue to have a very low per capita consumption of sugar at 13 kgs. per year against the average world per capita consumption of 23 kgs. per year. It is paradoxical that a country which has emerged as the largest producer of Sugar has a law per capita intake and suffer at certain times due to scarcity of sugar. The managements of the individual Companies in the industry, have therefore, to monitor their operations very carefully while the Government also has a special responsibility in this regard. Any adhoc policy decision relating to the sugar industry will cause considerable harm to the country's interest in view of the magnitude of the industry. A surplus or shortage situation in the availability of sugar should be handled very delicately by export or import of sugar at the best possible price and also at the opportune time. The Government should involve the industry in planning for the necessary export or import of sugar. In my view, the private sector is better equipped to handle the export and import of sugar by optimum management of resources. I need hardly point out here that the developments in the 1993-94 and 1994- 95 seasons have come about in an entirely unexpected manner. The situation now is in strong contrast with the conditions noticed in the second quarter of 1994 when price for free sugar increased in anticipation of a shortage of sugar and due to delay in taking decisions for import. While the shortage of sugar experienced in the fiscal year 1994-95 was overcome with imports, the rebound in production to an all time peak of 145 Lakh metric tonnes in the 1994-95 season from 98.30 Lakh metric tonnes in the 1993-94 has enabled the country to completely dispense with the imports and also effect large exports. The Government has understood the need for enabling larger soles by sugar mills in regions like ours to sell sugar in remotely located centres by granting a rebate in railway freight charges. Exports also have been permitted in the required quantities in the light of performance by the industry. With internal sugar consumption also improving, the record output is coming in handy. The opportunity for building-up buffer stocks should also be utilised. I am sure, with all these new developments, the sugar industry will be able to achieve reasonable profit ability and meet also the requirements of domestic consumers in full measure. The prospects for the 1995-96 season also are promising. You will appreciate, therefore, the importance of timely decisions regarding import and export. The industry is unnecessarily bearing an avoidable burden in the form of Levy Sugar and this cannot continue for a long time. The industry has to become competitive in the truest economic sense and has to be enabled to compete with international giants in the sugar industry. This can be achieved only by scrapping the levy sale and allowing the market to decide the price. Here, I would hasten to add that, keeping in view the dispersal of sugarcane production and the location of sugar factories, de-licensing of setting up new factories would affect the sugarcane producers and therefore the licensing of new sugar capacity by Central Government should continue for some more time. In fact, any step towards de-licensing will have a far reaching negative impact on the stability and productivity of the sugar industry. Instead of solving problems, it will open up a Pandora's Box of bottlenecks, problems and conflicts. The industry and the country will be better off if the present sugar licensing policy continues. PREPARING FOR THE FUTURE Your company has been taking efforts to strengthen itself to meet the impact of the cyclical nature of sugar industry by economically exploiting the by-products, namely, molasses and bagasse. We have already set-up a Distillery with a capacity of 30 KLPD Industrial Alcohol in the existing complex in Dharani Nagar, Vasudevanallur, Nellai Kattabomman District. I have pleasure in informing you that this Distillery has been recently commissioned successfully. Our project for executing a 2500 TCD Sugar Mill at Polur, Tiruvannamalai Sambuvarayar District alongwith a 15 MW Co-generation Power Unit has been progressing as per schedule and, subject to unforeseen circumstances, this should become operational by end of this year. This planning will be facilitating the achievement of significant economies, besides, effective utilisation of by-products. The project cost on this expansion involving a capital outlay of Rs. 7710 Lakhs is being financed partly by Term Loan from ICICI, SCICI and IREDA to the extent of Rs. 5000 Lakhs and an equity/internal accruals of Rs. 2710 Lakhs. The Fourth Unit at Bhadrak, Orissa is also taking shape well and commercial production is expected in 1996-97 season. The total acreage under sugarcane and the quality of the standing crop in all our factory command areas are extremely good and we hope to crush more than 13.00 Lakh metric tonnes during the coming season. Better capacity utilisation and captive utilisation of molasses and bagasse in our Distillery and Co-generation Unit will help your Company to achieve still better results for the period ending March '96. You, the Shareholders, have been our great source of strength all these years and we are committed to maximise the value of your investment. Our continuing aim is to ensure that this objective is achieved by sustained growth and planned expansion and diversification. Our existing units and the new projects will enable us to become one of the leading Integrated sugar companies in India. We are planning to raise additional equity through a Public issue shortly and we seek your cooperation to make it a big success. NATION - AT CROSS ROADS We are now at a crucial stage in our nation's life. India is currently facing severe political, economic and social challenges. But, looking of India's past, I am hopeful that we shall meet these challenges successfully with the required will and determination. During the Pre-Independence and the period immediately following the Independence, we were a nation of well defined goals and clear vision. We had a definite direction of development and growth. We had a philosophy of social upliftment and human values. At present, we appear to have last all these. It is so depressing to note that we do not seem to look at the long term future of our country. Most of the programmes, plans, and activities, are of a short term nature and most of the time they are politically motivated. I am also afraid that the intelligenzia of India has taken a detached view of society and they are not playing the dynamic role which is expected of them in shaping and formulating the character of India. Besides promoting industrialisation and development, we need to make a concerted attempt to build the character of our nation. A nation without character will eventually destroy itself. Politics without commitment to the nation's welfare will further accelerate the path of degradation. At Dharani, we are committed to do our share for character building and social development. And, as a taken of our efforts, your company has been supporting many educational causes to benefit the cone growers, employees and the general public in rural areas. The Group today manages three Matriculation Schools, two Industrial Training Institutes and an Arts and Science College. A lot more has to be done, and with your continued support, we hope to do more in the near future. ACKNOWLEDGEMENT I take this opportunity to thank every member of Dharani Family for having displayed vision, creativity and rare ability to achieve higher productivity in every sphere. We are implementing many new projects and we would not have achieved the current status without the dedicated and committed service of our people. I express my heartfelt appreciation to you, the shareholders far the support and encouragement and look forward to your continued support for our efforts in the future. We have received the needed assistance and active support from the All India Financial Institutions, namely, ICICI, SCICI, IDBI, IFCI, IREDA & IRBI in all our ventures and we would like to record our sincere appreciation far their help and guidance. Our bankers Indian Bank, State Bank of India and Federal Bank are always helpful to us and we thank them far their assistance. We are also thankful to the Government of India and the Governments of TamilNadu and Orissa far their encouragement and support. I and the fellow Members of the Board thank the sugarcane growers who are the foundation of our factories. Their enthusiasm and co-operation have been valuable far our continued success and I assure them of our commitment towards their welfare. Once again I thank you all. Dr. PALANI G. PERIASAMY Chairman Place : Madras Date : 21th September, 1995