You are here » Home » Companies » Company Overview » EID Parry (India) Ltd

EID Parry (India) Ltd.

BSE: 500125 Sector: Agri and agri inputs
NSE: EIDPARRY ISIN Code: INE126A01031
BSE 00:00 | 09 Apr 332.95 4.30
(1.31%)
OPEN

332.00

HIGH

339.00

LOW

330.00

NSE 00:00 | 09 Apr 333.45 4.55
(1.38%)
OPEN

329.90

HIGH

339.00

LOW

329.90

OPEN 332.00
PREVIOUS CLOSE 328.65
VOLUME 22602
52-Week high 371.25
52-Week low 132.50
P/E 48.18
Mkt Cap.(Rs cr) 5,897
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 332.00
CLOSE 328.65
VOLUME 22602
52-Week high 371.25
52-Week low 132.50
P/E 48.18
Mkt Cap.(Rs cr) 5,897
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

EID Parry (India) Ltd. (EIDPARRY) - Director Report

Company director report

To the Members of E.I.D.- Parry (India) Limited

Dear Shareholders

Your Directors have pleasure in presenting the Forty Fifth AnnualReport together with the audited financial statements for the year ended March 312020.

FINANCIAL PERFORMANCE

Rs in Crore

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Revenue from operations 1874.88 1845.17 17128.92 16555.53
Gross Revenue 2015.57 2046.44 17147.80 16517.82
Profit Before Interest and Depreciation (EBITDA) 235.18 414.21* 2015.69 1533.79
Depreciation 119.56 113.77 318.96 272.33
Profit Before Interest and Tax (EBIT) 115.62 300.44 1696.73 1261.46
Finance Charges 135.66 113.43 430.49 424.51
Net Profit Before Tax (20.04) 187.01 1266.24 836.95
Tax Expenses (21.87) 23.88 377.36 399.30
Net Profit After Tax Before Non-controlling interest 1.83 163.13 888.88 437.65
Non-controlling interests NA NA 421.01 284.16
Net Profit After Tax and Non-controlling interest 1.83 163.13 467.87 153.49

* includes profit on sale of Bio-pesticides division and investment inParry America of Rs 243.92 crore

DIVIDEND AND RESERVES

The Board has not recomended any Dividend for the year ended March312020.

The Company has not transferred any amount to the reserves for the yearended March 312020.

SHARE CAPITAL

The Paid-up Equity Share Capital of the Company as on March 31 2020was Rs 17.70 Crore.

CONSOLIDATED OPERATIONS

Consolidated Revenue from operations for the year was Rs 17129 Croreas against Rs 16556 Crore in the previous year. Overall expenses for the year was Rs15879 Crore as against Rs 15657 Crore in the previous year. Operating Profit (EBITDA)excluding Exceptional items was Rs 2016 Crore as against Rs 1558 Crore in the previousyear. Profit after Tax and minority interest for the year was Rs 468 Crore as against Rs153 Crore in the previous year.

STANDALONE OPERATIONS

Standalone Revenue from operations of your Company for the year was Rs1875 Crore as against Rs 1845 Crore in the previous year. Operating Profit (EBITDA) wasRs 235 Crore as against Rs 170 Crore (excluding profit from the sale of Bio Division& Sale of shares in Parry America) in the previous year. Profit after Tax for the yearwas at Rs 2 Crore as against profit of Rs 4 Crore (excluding profit from the sale of BioDivision & sale of shares in Parry America) in the previous year.

Your Company's performance during the year marginally improvedover the previous year despite a challenging operating environment. The Sugar Businessimpacted by stock holding restrictions under the new Regulatory regime a subdued pricesharpened its focus on cost optimisation and retail sales delivering quality productsthereby consolidating its market share. The better realisation from sugar retail sales andalcohol sales facilitated in improving the Company's bottom line to a large extentamidst a subdued demand environment. The business grew reasonably recording modest growthin revenue and profitability despite heightened competition and elevated input costs.

Like last year this year was an equally challenging year for theCompany as the sugar surplus situation continued both at the global and domestic level.The downward spiral in sugar prices which begun in 2018-19 continued to have its impactand presence felt during the year affecting the entire industry. The Government which cameout with a slew of measures in the year 2018-19 to rescue the beleaguered industryincluding the Minimum Selling Price (MSP) sustained most of the measures and incentivesto maintain a systemic balance between demand and supply and to maintain the prices. Thesemeasures initiated by the Government though with a noble objective keeping in mind of theinterest of farmers and Industry could only have a short-term impact to contain anadverse situation and ultimately the natural forces of demand and supply will rule thesugar prices.

Against the backdrop of a challenging operating environment as statedabove your Company sustained its position as one of the top sugar producing Company insouth India leveraging a robust portfolio of brands a slew of products customised toaddress regional tastes and preferences like Parry's Jaggery and Parry's AmritBrown Sugar along with an efficient supply chain and distribution network. During theyear the Business implemented several initiatives encompassing cost management supplychain optimisation smart procurement alternative fuel usage and productivity improvementwhich helped in absorbing the escalation in input costs. During the year the businessmigrated from erstwhile SAP ECC 6 system to SAP HANA which successfully went liveeffective from October 03 2019.

The exponential surge in demand for hand sanitizers in view of thecoronavirus (COVID-19) outbreak and the clarion call by the Government to step upproduction has led the Company to commence manufacture of sanitizers. The Company hasintroduced hand sanitizers under its Brand HandKleen and STERISAFE in the market. TheCompany has also stepped in offering to use its supply of extra neutral alcohol (ENA) usedto make sanitizers amid an increasing need for the product. The growing awareness towardspersonal hygiene and the increased prevalence of frequent viral outbreaks in severalgeographies have propelled the demand for hand cleaners and your Company is well poised toenter this arena.

Your Company is constantly aligning its products processes andstrategies to the changing market conditions to stay ahead of competition and leveragingtechnology to further develop and build new capabilities to redesign the key businessprocesses across functions. The focus on customer centricity and service excellence willbe a source of our business competitiveness. We continue to improve our consumer-relevantquality standards thereby enhancing customer delight and overall consumer experience. Weare reducing costs as well as uncovering new and innovative ways of working and have anenterprise-wide savings programme driven through crossfunctional teams. The Company willconstantly work towards driving efficiencies across the value chain to grow the businessfurther. Our

People are our biggest strength and are fully empowered to excel in ourfast-changing environment marked by uncertainty. We are creating a more flexible and agilemindset in the organisation and striving to develop the right capabilities and skillsneeded for different ways of working and new leadership qualities through collaborationand experimentation.

ECONOMY & INDUSTRY SCENARIO Global Outlook

Global growth decelerated markedly in 2019 with continued weakness inglobal trade and investment. This weakness was widespread affecting both advancedeconomies - particularly the Euro Area - and Emerging Market and Developing Economies(EMDEs). Various key indicators of economic activity declined in parallel approachingtheir lowest levels since the global financial crisis in particular global trade ingoods was in contraction for a significant part of 2019 and manufacturing activity slowedmarkedly over the course of the year.

Near-term projections for global growth masked different contours inadvanced economies and EMDEs. Growth in advanced economies was projected to slow to 1.4%this year below previous projections in part reflecting lingering weakness inmanufacturing and was expected to improve slightly over the rest of the forecast horizon.In contrast after decelerating to an estimated weaker-than-expected 3.5% last yeargrowth in EMDEs was projected to increase to 4.1% in 2020. Nonetheless the recovery inaggregate EMDE growth this year which assumed continued monetary policy support in manyeconomies no major swings in commodity prices and generally benign borrowing costs wasnot envisioned to be broad-based.

During the end of the last quarter of the financial year 2019-20COVID-19 outbreak brought considerable human suffering and major economic disruption.Growth prospects remain highly uncertain. Annual global GDP growth is projected to drop to2.4% in 2020 as a whole from an already weak 2.9% in 2019 with growth possibly evenbeing negative in the first quarter of 2020. The adverse impact on confidence financialmarkets the travel sector and disruption to supply chains contributes to the downwardrevisions in all G20 economies in 2020 particularly ones strongly interconnected toChina.

The World Trade Organization (WTO) predicts that the world trade isexpected to fall by 13% to 32% in 2020 as the COVID-19 pandemic has disrupted normaleconomic activity and life around the world. The WTO economists believe the decline willlikely exceed the trade slump brought by the global financial crisis of 2008-09. Estimatesof the expected recovery in 2021 are equally uncertain with outcomes depending largely onthe duration of the outbreak and the effectiveness of the policy responses. Theunavoidable declines in trade and output will have painful consequences for households andbusinesses on top of the human suffering caused by the disease itself.

Indian Economy

Global headwinds and challenges in the domestic financial sectormoderated the growth of Indian economy in 2019-20. The real GDP growth moderated to 5.0%in 2019-20 as compared to 6.8% in 201819. Despite a temporary moderation in the GrossDomestic Product (GDP) growth in 2019-20 the fundamentals of Indian economy remainedstrong and it was expected that GDP growth would rebound from the first quarter of2020-21. Fiscal situation remained close to the consolidation path and consumer priceinflation was within the targeted limits set by the monetary policy committee of ReserveBank of India (RBI). Despite continuing sluggishness in global demand the Current AccountDeficit (CAD) narrowed to 1.5% of GDP in first half of 2019-20 from 2.1% in 2018-19.Global confidence in the Indian economy improved as reflected in growing inflows of netForeign Direct Investment (FDI) and an all-time high accumulation of foreign exchangereserves of US$ 457.5 billion as in end December 2019. India moving up by 14 positions to63rd rank in 2019 World Bank's Ease of Doing Business 2020 Report has among otherscontributed to the increase in global confidence in Indian economy India has emerged as animportant player in the world on the back of high GDP growth andannouncement/implementation of critical measures in the current year and last few years.

The measures announced / implemented in 2019-20 include reduction incorporate tax rate; policy initiatives for development of textiles & handicrafts andelectric vehicles; outreach programme for growth expansion and facilitation of microsmall and medium enterprises; incentives for start-ups in India; recapitalization ofpublic sector banks relaxation of ECB guidelines for affordable housing; and streamliningof many labour laws at the central government level. Government has also taken variousmeasures from time to time to stabilize prices of essential food items throughinter-alia trade and fiscal policy instruments like customs duty minimum export priceexport restrictions imposition of stock limits besides advising States for effectiveaction against hoarders & black marketers to regulate domestic availability andmoderate prices.

Prior to the outbreak of COVID-19 the outlook for growth for 2020-21was looking up. First the bumper rabi harvest and higher food prices during 2019-20provided conducive conditions for the strengthening of rural demand. Second thetransmission of past reductions in the policy rate to bank lending rates had beenimproving with favourable implications for both consumption and investment demand. Thirdreductions in the goods and services tax (GST) rates corporate tax rate cuts in September2019 and measures to boost rural and infrastructure spending were directed at boostingdomestic demand more generally. However the COVID-19 pandemic has drastically alteredthis outlook.

As per the Reserve Bank of India COVID-19 the accompanying lockdownsand the expected contraction in global output in 2020 weigh heavily on the growth outlook.The actual outturn would depend upon the speed with which the outbreak is contained and

economic activity returns to normalcy Significant monetary andliquidity measures taken by the Reserve Bank and fiscal measures by the government wouldmitigate the adverse impact on domestic demand and help spur economic activity oncenormalcy is restored. Risks around the inflation projections appear balanced at thisjuncture and the tentative outlook is benign relative to recent history. But COVID-19hangs over the future like a spectre.

Policy initiatives post COVID-19

The Government of India has initiated a slew of policy initiatives totackle the sluggish economy post COVID-19. This includes a number of stimulus and reformmeasures including announcement of a Rs 20 Lakh Crore package. A highlight of the stimuluspackage was the legal reforms proposed for agriculture. It has been likened to the 1991reforms which transformed industry and financial markets. Agriculture remains shackled byantiquated laws and moreover progress in creation of a national market for agriculturalproduce has been slow. Therefore proposals to amend Essential Commodities Act (ECA)create a central law to expand marketing options through interstate trade and electronictrading platforms and introduce a facilitative legal framework to enhance farmerengagement with retailers and aggregators have drawn praise from various quarters.Similarly the APMC Act created monopsony powers and erected entry barriers for newagents. A functioning market needs many buyers and sellers making the Centre's plansto create a legal architecture to facilitate it is important. But laws alone will notunlock agriculture's full potential and the Government needs to play a more proactiverole as it did in the 1991 reforms to create market infrastructure. The Governmentlaunched e-NAM four years ago an electronic pan-India link of wholesale markets and theaim was to connect the existing mandi system to create a national market for farmers.However only about 9% of about 6946 markets are linked to e-NAM since the Marketinfrastructure for quality assessment dispute redressal mechanism and logisticsinfrastructure are inadequate. Government needs to take a more proactive role and the leadhere as markets evolve only when legal changes come with a complementary ecosystem.

Global Sugar

According to Platts Kingsman global sugar balance moved from a surplusof 3.98 Million Metric Tonne (MMT) in Sugar Year (SY) 2018-19 to a deficit of 3.35 MMT inSY 2019-20. 2019-20 started against a backdrop of record production in India and Thailandincreased global stocks and falling raw sugar prices in international exchanges. Globalprices were under a great deal of pressure ultimately bottoming out in September 2019.However Weather Gods came to the rescue of the industry. Indian production dropped due tofloods whilst Thailand losts more than 35% of its record crop of last year due tounprecedented drought. Brazil's focus on ethanol for the second successive year meantthat their sugar production remained capped at previous year levels. International rawsugar prices continued to climb from 10.68 c/lb in September 2019 to over 15.5 c/lb inFebruary 2020. Dry weather in US added to the

tightness especially of refined sugar triggering a rally in refiningwhite premiums. Due to sudden fall in oil prices in March 2020 the raw sugar marketplunged again to 10 c/lb levels.

As per estimates made by Platts Kingsman global deficit for the SY2020-21 is expected to narrow down to 1.7 MMT An explosive combination of falling oilprices and weakening Brazilian Real has led to Brazilian mills maximising their sugarproduction. Brazil is estimated to produce 7 to 8 MMT of additional sugar in 2020-21 whencompared to 2019-20. A normal monsoon predicted for India should mean a sugar productionof more than 30 MMT Thailand is the only major producer which is expected to have lowerproduction due to dry weather. Initial estimates indicate that the sugar consumptiongrowth could be flat in 2020-21 due to loss of demand due to COVID-19 pandemic relatedlockdowns although a lot will demand on the nature of recovery of economic activities in2020-21.

Indian Sugar Market

India has of late became the world's largest sugar producerbeating Brazil and is also the largest sugar consumer. Excess sugar production in the lastcouple of years has resulted in surplus sugar. The primary reason for this exponentialrise in sugar production is the introduction of an early maturing cane variety the Co0238 (Karan 4). This cane variety gives very high cane yield and sugar recovery. Thisvariety was released in 2009-10. and currently in Uttar Pradesh the plantation of thisvariety is above 90% which has increased the sugar production upto 12 to 13 MMT per year.This coupled with increase in Fair & Remunerative Price (FRP) over the years hascontributed to the highest ever sugar production in India during the past few seasons. Infact Sugarcane is the most profitable crop for farmers in India as the return is assuredand 50-60% higher than the return from any other crop. The increase in the FRP ofsugarcane in the last 10 years has outpaced the increase in the MSP of other crops likewheat paddy coarse grains cotton etc. causing a distortion in the farm economics.This along with the fact that sugarcane has an assured buyer is a sturdy crop and getsthe promised assured price is the main reason why sugarcane is one of the most preferredcrop in the country.

Indian Sugar Production has historically been cyclical in nature with3-4 years of bumper crop usually followed by 2 years of shortfall. The shortage yearshelped restore MillsRs health by liquidating excess stocks and lifting market prices forSugar thereby benefiting farmers. However this cyclical pattern has been broken latelywith Sugar production outpacing consumption since the Year 2010-11 except the Year 2016-17when Sugar production dipped to the level of just 20.3 MMT mainly due to droughtconditions.

According to ISMA the production in the sugar season 2019-20 isexpected to be 26.5 MMT The season started in October 2019 with 14.5 MMT of openingstock. The domestic consumption in 2019-2020 is estimated to be 26 MMT and exports nearly5 MMT The closing stock on September 30 2020 is expected to be nearly 10 MMT

The sugar industry is going through transformational changes throughvarious Government & Industry efforts to make business models more sustainable byincreasing the ethanol-blending target to 10% by 2022 & 20% by 2030. Moreover withthe introduction of the concept of MSP for sugar losses in the sugar business expected tobe avoided to a large extent. With new biofuel policy introducing ethanol productionthrough ‘BRs heavy & syrup route most sugar companies are expanding theirdistillery capacity. Also the government has approved a Ethanol Blending Program (EBP)loan with interest subvention @ 6% per annum or 50% of rate of interest charged by bankswhichever is lower for nearly 114 projects. This would lead to building of more than 200Crore litre of annual capacity by 2023. These measures can be a long-term solution toescape the sectoral cyclicity and reinstate sustainable earnings for sugar companies.

Government of India Sugar Policies

The Central Government came out with a slew of corrective measures andsupportive mechanisms during the year 2018-19 providing much needed succor to the sugarindustry reeling under pressure to be rescued from the mounting cane arrears and the highdebt burden. Most of these measures continued during 201920 with the Government continuedto cap the quantity of sugar which mills in the country could sell and at a minimumselling price. These measures stabilized sugar price in the country with greater degree oftransparency discipline and accountability. Some of the important policy directionsissued pertaining to the sugar industry are as follows:

Maximum Admissible Export Quantity (MAEQ): In view of the highinventory levels with the sugar industry and to facilitate achievement of financialliquidity mill-wise MAEQ of 60 Lakh Metric Tonne (LMT) have been fixed for the sugarseason 2019-20. Sugar mills are required to export their MAEQ entitlement by September 302020. The Government vide notification dated September 12 2019 has notified a scheme forproviding a lump sum assistance at Rs 10448 / MT to sugar mills to facilitate the exportduring the sugar season 2019-20.

Scheme for creation and maintenance of Buffer stock: In order tomaintain demand supply balance in the domestic market and to stabilize sugar prices theGovernment has notified a scheme on July 312019 for creation of buffer stock of 40 LMT ofsugar for a period of one year from August 012019 to July 312020. The Government toreimburse the carrying cost of Rs 1674 Crore to sugar mills for maintaining such bufferstock.

Soft Loan: On March 02 2019 the Central Government announced ascheme of soft loan of Rs 10540 Crore with interest subvention of 7% on actual rate ofinterest charged by bank for a period of one year. The Government also said that allloans sanctioned & disbursed by May 31 2019 would be covered by the scheme. Videnotification

dated July 24 2019 the Government stated that all loans sanctioned byJuly 312019 and disbursed by August 312019 by lending banks would now be covered underthe scheme.

Government of Tamil Nadu (TN) G.O. - reimbursement of freight cost:The Tamil Nadu Government on April 03 2020 issued a G.O. allowing reimbursement offreight cost incurred by mills for transporting cane from field to mill for SY 2018-19.The salient features of the G.O. include the following:

a. Transport cost will be reimbursed to mills only if they have settledFRP

b. Transport cost reimbursement will be restricted to Rs 100 / MT oractual cost incurred whichever is lower.

c. Non own cane not eligible for reimbursement.

Budget Allocation by TN Government: The Tamil Nadu Government hasmade a budgetary allocation for the year 2020-21 of Rs 165 Crore towards TransitionalProduction Incentive which is the difference between erstwhile State Advise Price (SAP)of Rs 2750 / MT and FRP of Rs 2612.50 / MT for 9.50%. The Government has furtherallocated Rs 110 Crore towards Transport subsidy up to Rs 100 / MT of cane for the SY2019-20.

Cogeneration of Power: On 28th June 2019 Ministry of PowerGovernment of India issued an order directing Regional Load Despatch Centres (RLDC) andState Load Despatch Centres (SLDC) to open Letter of Credit (LC) in favour of powergenerating companies for the agreed quantum of power supply. The order provides forencashment for LC by the generating company after the agreed credit period of 45 or 60days as the case may be. This was a welcome move by the GOI to facilitate timelycollection of debtors which has come into effect from 01.08.2019.

Ethanol

Molasses is a viscous by-product obtained from raw sugar during themanufacturing process. Cane-based ethanol can be produced in three different ways directlyfrom cane juice and from B-heavy and C molasses. In 2003 the Government of India (GOI)had launched the Ethanol Blending Programme (EBP) on a pilot basis which was subsequentlyextended to the Notified 21 States and 4 Union Territories to promote the use ofalternative and environment-friendly fuels. The programme is a part of the long-termstrategy to reduce India's dependency on crude imports and insulate the nation fromglobal oil price volatility as well as give the domestic sugar sector a boost by divertingexcess sugar stocks towards ethanol manufacture. While the programme initially targeted a10% blending of petrol with the biofuel by 2022 later the target was enhanced to achieve20% ethanol blending with petrol by 2030.

The Ministry of Petroleum & Natural Gas have released EthanolProcurement Policy on a Long-Term Basis under Ethanol Blended Petrol (EBP) Programme. Thesalient features of this policy include the annual procurement quantity as estimated byOMCs to remain firm for ESY (Ethanol Supply Year: Dec to Nov). A mechanism to beintroduced by OMCs for change in transportation rates with the change in fuel rates.

Currently sugar companies are able to supply 230-240 Crore litre toOMCs. With the opening up of the B heavy and Syrup route sugar companies in totalitycan supply maximum 500-550 Crore litre. However current capacities are insufficient toutilise the B heavy route with optimum potential. This has led the government to offersoft loans of Rs 15000 Crore to companies wanting to create greenfield/ brownfield ethanolcapacity.

Though the government seems to be serious about its 10% and 20% ethanolblending programme historically it has faced multiple issues like lack of capacity lowerfeedstock availability lower crude prices and OMC resistance to adopt 10% ethanolblending. Hence any change in government policy can derail the EBP and negatively impactsugar millers. However this looks unlikely as the government has approved a soft loan to114 projects for increasing distillery capacity.

During the year the Central Government announced that no separateenvironmental clearance will be required to produce additional ethanol from B-heavymolasses as it does not contribute to the pollution load. To obviate the need forundertaking fresh Environmental Impact Assessment (EIA) or public consultation in all suchcases of increase in production capacity the Government has given a clarificationrelating to issuance of environmental clearance in order to facilitate the sugar mills toundertake additional production of ethanol from B-Heavy Molasses in place of using C-HeavyMolasses without any increase in the total pollution load.

Cogeneration

Bagasse is the fibrous matter that remains after sugarcane stalks arecrushed to extract their juice and is a by-product generated in the process of manufactureof sugar. It can either be sold or be captively consumed for generation of steam. It iscurrently used as a biofuel and in the manufacturing of pulp and paper products andbuilding materials. The bagasse produced in a sugar factory is however used for generationof steam which in turn is used as a fuel source and the surplus generation is exported tothe power grids.

For each 10 tonnes of sugarcane crushed a sugar factory producesnearly 3 tonnes of wet bagasse. Since bagasse is a by-product of the cane sugar industrythe quantity of production in the country is in proportion to the quantity of sugarcaneproduced.

The power produced through co-generation substitutes the conventionalthermal alternative and reduces greenhouse gas emissions. In India interest inhigh-efficiency bagasse-based cogeneration started in the 1980s when electricity supplystarted falling short of demand. High-efficiency bagasse cogeneration was perceived as anattractive technology both in terms of its potential to produce carbon neutral electricityas well as its economic benefits to the sugar sector. In the present scenario wherefossil fuel prices are shooting up and there is a shortage and non-availability of coalco-generation appears to be a promising development. The thrust on distributed generationand increasing awareness for cutting greenhouse gas emissions increases the need forcogeneration.

The electricity production through cogeneration in sugar mills in Indiais an important avenue for supplying low cost non-conventional power. However severalfinancial regulatory and technical challenges are required to be overcome for realizingthis potential.

BUSINESS OVERVIEW Sugar

Sustained growth and profitability of sugar business depends uponcontinuous availability of high-quality sugarcane. During the year the sugarcaneavailability in TN was lower due to the widespread drought affecting major section of thecommand area however the cane crushed was better than the previous year. The Cane areain TN has seen considerable decline during the last few years caused by deficit rain andfarmers shifting to other competing crops. This has adversely affected the Company'sTN operations where most of its plant capacity continued to remain idle. The continuousnonavailability of sugarcane forced the Company to close down its Factory operations atPudukottai after completing the main season in May 2019. The Company could resume itsoperation at Pugalur from July 2019 after a gap of nearly 2 years only after the caneavailability in the said area shown modest improvement. Due to decrease in Caneavailability in TN year after year several mills have shut down their operations duringthe last few years significantly affecting the sugar production in TN.

During the year the Company was allotted additional cane area atKammapuram Vridhaclalam South Firkas and also 15 villages in Pennadam Firka to itsNellikuppam unit on a temporary basis. The Company has initiated cane developmentactivities in these areas to increase the area under sugarcane cultivation.

In TN despite lower cane availability there was an improvement incane crushed by the Units at 13.77 LMT @ 8863 TCD per day as against 12.46 LMT @ 8097 TCDper day in the previous year. The average recovery recorded was at 8.69% as against 8.82%in the previous year. The recovery would have been better if the plants

would have operated continuously during the peak period of March 2020.Due to the outbreak of COVID-19 the plants were stopped for a short duration during thelast week of March 2020.

In Karnataka (KN) majority of the farmers depend on the canal waterfor irrigation. During April - July 2019 there was severe drought in the area in andaround the Company's unit at Ramdurg & Bagalkot and the crop was estimated to be lowerby around 40% as compared to previous year. In August the heavy rainfall caused floodsacross the entire North Karnataka which was the highest in last 5 years. This helped inthe revival of the crop and the crop condition improved and finally the crop estimated tobe 18 - 20% lower than last year. Since good rainfall received across all KN Units theplantation this year expected to increase by 12 - 15% as compared to previous year. In KNthe cane crushed was lower at 17.62 LMT as compared to 19.68 LMT in the previous year. Theaverage recovery was at 11.35 % as against 11.15% in the previous year.

During the year the Company took a number of initiatives to streamlineand improve the KN cane procurement and management function reeling under the pressure ofa heightened competition and the menace of unauthorized cane poaching. Efforts were madeto reduce the harvesting & transportation (H &T) advance and to ensure accuratebooking of gangs so as to decrease yard balance vehicle waiting hours and to improverecovery. Early start of the units helped the Company to ensure adequate reporting ofH&T gangs. Centralized H&T planning and execution facilitated smooth inter-unitmovement and reduced yard balance. Deployment of mechanical harvesters was increased tocover a large part of the area to counter the shortage of harvesting labour. Prompt Canepayment even before the statutory deadline of 14 days also helped the Company to procurecane till end of the season across all KN Units.

During the year despite stiff resistance from various quarters theCompany's unit in KN stuck to its stand of paying only the statutory mandated FRPwhile a few neighbouring mills reportedly paid higher price. In spite of competitionpaying higher price than the FRP the Company procured maximum cane till the end of theseason across all the KN units. This was made possible by timely payment to all thefarmers without any arrears. We are proud to say that our stand of paying our valuablesuppliers the farmers on time over the years has helped us in building trust andcredibility in the minds of the farmers.

With respect to the Andhra Pradesh (AP) unit the cane crushed was at5.33 LMT as compared to 5.05 LMT in the previous year. The average recovery was at 8.83%as against 9.23% in the previous year. In AP at the state level there has been asubstantial dip in recovery due to the changing weather patterns.

The overall cane crushed by the Company as a whole was at 36.72 LMT asagainst 37.19 LMT in the previous year. The average sugar recovery was at 9.99% as against10.11% in the previous year.

The sustained availability of cane being a major concern a number ofinitiatives are being taken up by the Company including supply of clean seed providingresources for drip and micro irrigation and facilitating the various agronomy servicesthrough agencies and agri service providers. As part of the farmer centric and inclusivestrategy the Company operates soil testing labs which provide ‘soil health cardsRsto farmers for improving soil health and fertility. These initiatives will help inincreasing the yield per acre which in turn will increase the income per acre to thefarmer. To interact with the farmers throughout the life cycle of cane crop FarmerConnect App has been effectively utilised in TN AP & KN and a large number of farmershave been registered by using the Farmers App. By this the cane and extension team are inregular touch with the farmers during the entire life cycle of the crop and assist thefarmers immediately as and when the need arises. To improve mechanised farming theCompany has also practised aggregator model for farm implement services. To mitigate theimpact of drought around 65 borewell recharges are established around the unit atPugalur TN. Since Pugalur was the affected area due to low rainfall the company has alsodesilted 7 Ponds and continuing the initiative further to improve the ground waterresources.

The Company has been working closely with the Government on a number ofsubsidy schemes to promote drip irrigation Sustainable Sugarcane Initiative (SSI) etc.The company has embarked on a program of ensuring clean seed for planting. In TN and APthe 3-Tier nursery programme has been strengthened and varietal purities are beingimproved through quality seed sourcing from Breeding Institutes and Company's owntissue culture seedling production centres. In TN and AP seedling production throughshade nets were effectively utilised. All these activities will pave the way for yieldimprovement and ensure sustained sugarcane availability.

To ensure continuous supply of water for the farmers the Company isworking towards getting the maximum benefit from the key irrigation projects beingimplemented by the Government in Haliyal Sankili and Bagalkot which would provebeneficial in the long term.

Price - Sugarcane & Sugar

For the Sugar Season 2019-20 the Department of Food and PublicDistribution Ministry of Consumer Affairs Food and Public Distribution fixed the FRPfor sugarcane at Rs 275 per quintal for a basic recovery of 10.00% and a premium of Rs2.75 for every 0.1% increase in the recovery rate as recommended by the Commission ofAgricultural Costs and Prices (CACP). Also for 9.5% and less recovery the FRP was fixedat Rs 261.25.

The 2018-19 season started with a record opening stocks of 14 MMT. Theproduction during the season touched 32.6 MMT. This was almost at par with the productionin previous season. With high production of sugar the GOI continued the controls on salesand pricing with the Release Order mechanism and enforcement of MSP at Rs 31 per kg inorder to support the industry and cane farmers. The other measures taken by the CentralGovernment were in the form of soft loans cane production subsidy transport subsidy onsugar exports and interest subvention scheme for setting up of ethanol capacities. Thevarious State governments also granted incentives in the form of soft loans and canesubsidies which provided some respite to the sugar industry which was reeling under supplypressures. While the announcement of cane production subsidy towards the end of September2019 along with sugar exports of 6 MMT resulted in some improvement in sugar prices toaround Rs 32500 / MT in October 2019 with the commencement of the cane crushing pricedeclined to around Rs 31500 / MT in November 2019 and then gradually to around Rs 31000/ MT in December 2019 and continued to remain at that level till the end of the year.

Manufacturing Operation

The Company continues its expedition towards achieving manufacturingexcellence and achieve better efficiencies in steam energy and chemicals consumptionbesides reduction of total losses. The Company has accelerated its cost optimisation driveacross the value chain to further improve its operational efficiency. The executionexcellence initiatives pursued to optimise efficiencies reduce cost and eliminate wastagehas been adopted across functions and processes. TPM deployment has been aggressivelypursued and initiatives on safety environment and quality under TPM helped the Company toachieve manufacturing excellence operational safety and higher level of qualityawareness. During the year the CII - TPM Strong Commitment audit has been completed atBagalkot and also FSSC-22000 Version 5.0 Certificate has been received. Your Companycontinues to accord the highest priority to manufacturing excellence. Severalmanufacturing units of your Company competing with both the best within and outside theindustry received various awards and accolades during the year bearing testimony to yourCompany's focus on manufacturing excellence safety and quality.

During the year the Sankili Unit has begun setting up of anincineration boiler in place of the existing IE & ATFD systems which will increasethe number of operating days of the distillery by 70 days per year from 2020-21 and willalso address the key environmental issues associated with handling of effluent. The boileris expected to be commissioned in the current year.

The Company has ensured compliance with stipulated parameters withrespect to emission and effluent generation with stringent online monitoring systems whichare hooked up to the SPCB/ CPCB monitoring systems.

The Company has enhanced its production capacity of Parry Amrit NaturalBrown Sugar to 40 TPD at Nellikuppam Plant and has erected machinery & equipment tocater to the increased production.

The Company continued to source Molasses for its Tamil NaduDistilleries. During the year the Company sourced 79750 MT Molasses thus improving theoperating days of its distilleries. The Company has enhanced the alcohol productioncapacity at Sankili to 48 KLPD from 40 KLPD and In this regard Fed Batch Fermenters havebeen commissioned at Sankili in January 2020. Post stabilization of the plant the Unitis expected to achieve 48 KLPD.

Consequent to closure of the sugar factories at Pondicherry andPudukkottai the Company is exploring various options for better utilization of the saidassets at other locations including sale of the remaining surplus assets including land asmay be deemed necessary and appropriate.

During the year in March 2020 the nationwide lockdown on account ofoutbreak of COVID-19 impacted the cane crushing sale of alcohol and export of power.Nellikuppam Pugalur and Sankili mills were stopped for a short duration on 25th March2020 due to imposition of Section 144 of the Indian Penal Code.

Manufacturing Initiatives: The Company pursued its ‘gobeyondRs strategies to optimise efficiencies reduce cost eliminate wastage and achievestretch targets for growth. The following were some of the initiatives which wereundertaken during the year:

• Feb batch Fermentation system has been commissioned at Sankiliand effluent generation reduced from 9m3 / ltr of alcohol to 7.5m3 /ltr of alcohol on running with B-Heavy molasses and alcohol % was increased from 8% to10.5%.

• First in AP to produce Ethanol from Sugar syrup and to receivevalidation report from the NSI Kanpur for the production of ethanol from B-Heavy molassesand sugar syrup.

• Bagasse Pellet machine commissioned at Sankili and the fine-tuning works are in progress. In Bagalkot the civil works are under progress for BagassePellet Plant erection.

• Obtained EC from the State Environment Impact AssessmentAuthority Karnataka for distillery project at Bagalkot.

• Utilisation of the excess condensate instead of raw waterreduced the raw water consumption from 678 m3 / day to 533 m3 / dayat Ramdurg. Totally around 776 m3 / day excess condensate water cooled andutilized for cooling and process use and reduced the effluent generation below 60 litresper ton of cane crushed.

• ESP Revamping of 120TPH Boiler has been done at Haliyal Unit tomaintain the emission standards.

• ICT - Spentwash treatment technology trials under progress inNellikuppam and the resin replacement has been planned and methanol recovery is underprogress to the expected level.

Sales and Marketing

The Company's strategy continues to de-risk itself from thecyclicality of sugar business by way of value addition and in the process the company hasbeen diligently working towards several strategies to meet the changing needs andaspirations of the consumers. The Company continues to strengthen its presence in thebranded sugar market in view of the higher realisation healthy long-term prospects lowlevels of per capita consumption rising disposable incomes increasing urbanisation andgrowing consumer preference for different value-added products. Your Company is wellpositioned to seize the opportunities in whatever form it comes and continues to investin creation of vibrant brands consumer-centric products and a robust supply chain toemerge as a important player in this space. Technology and rapid digitisation are changingthe consumer landscape around the world. Consumers today are taking newer paths forpurchasing brands. We are constantly innovating across our portfolio and creatingcategories of the future to address the evolving needs of our consumers. Your Companyseeks to significantly scale up the retail businesses leveraging its institutionalstrengths viz. deep consumer insight proven brand building capability strong rurallinkages a deep and wide channel-tailored distribution network.

The Company's retail brand of brown sugar ‘Amrit' hasmade significant strides and is well accepted by the consumers. During the year theCompany launched Parry's Amrit Jaggery powder to meet the changing needs of consumers whoare health conscious. Parry's Amrit Jaggery Powder undergoes rigorous tests duringthe manufacturing process to prove that it's the purest and safest form of jaggerythat benefits consumer. Prepared using state-of-the-art technology with no harmfulchemicals or added artificial flavours the Company ensure that the consumers get pureready-to-use factory packed jaggery that is untouched by hand. With no impurities itrequires no straining or melting and is ready to use by consumers in their favouriterecipes.

Post March 2020 the Company forayed into the disinfectants market withthe launch of its brand Handkleen and Sterisafe sanitizer. Owing to its large populationthe country is highly exposed to infections and several pandemics such as COVID-19. A lotof initiatives have been taken across the country for increasing awareness of hygienepractices and solutions owing to the frequent hardship involved in the day-to-dayactivities. Improving hand hygiene is considered a core strategy to decrease the incidenceof healthcare associated infection in the country and the Company is fully geared up tocash on this opportunity.

During the year the Company sold 2.91 LMT of sugar in the domesticmarket as against 3.58 LMT in the previous year 2018-19. The drop- in sales quantity wasmainly due to the release mechanism of the Government (Release Quota). The Company focusedon achieving better price realisation through targeting select Institutional customers andincreased the market share in the retail segment significantly and introducing value addedproducts.

Institutional Sales

The Company has established a benchmark brand across sugar industrywith its strong product customisation expertise stringent quality systems globalcertification standards and timely deliveries. Due to the said factors and the strategiclocations the Company has gained the position of a major supplier of sugar to variousinstitutional customers across country. The customer base includes institutions acrosssectors ranging from pharmaceutical soft drinks beverage food Juices confectionerymodern trade sweets dairy ice cream and biscuit manufacturers.

During the year the company sold sugar directly to institutionsaccounting for nearly 59% of its domestic sales as against 41% of the previous year. TheCompany increased the focus on premium refined sugar sales to pharma and food companies todeliver higher realizations. Like last year the Company continued to sell Bonsucrocertified sugar produced from sustainable sugarcane both from TN and KN Units. With largemultinationals focusing on sustainability and sustainable raw materials theCompany's Bonsucro certified sugar is gaining a competitive advantage and willcontinue to do so in the long run as well.

Retail Sales

In the retail segment the Company sold sugar contributing nearly 18%of the annual domestic sales as against 9% in the previous year achieving a 75% growth involumes over the previous year. Its strategy of expanding market presence and marketpenetration has worked positively in gaining market share of retail sugar.

Brand Building

The Company invested in building the brand Parry in the consumer marketby building the portfolio of value-added products. The value- added product portfoliowitnessed a sharp growth of 60% after it was supported on media. The media exposure givenin TN and Bangalore has strengthened the brand further.

Quality

During the year the Company continued to focus on the retail andinstitutional segment with quality product and processes. During the year the BagalkotUnit got accredited with FSSC 22000 version 5 for the first time and became the third unitof the Company to obtain this from the DNV GL Certification Body. Further as per theCustomer requirements two of its Units in TN and KN were qualified to receive Koshercertifications.

In addition to the above new certifications the Company's unitsin Nellikuppam and Haliyal qualified in the recertification audits of FSSC 22000 and ISO9001:2015. The Company's refinery Unit in Nellikuppam successfully qualified insustaining its GMP certifications to continue to supply Drug Manufacturing Customers andother Pharmacopeia accreditations of Indian Pharmacopeia European United StatesJapanese and British.

During the year the Company in its endeavour to provide qualityproducts to customers started producing refined sugar by adoption of sulphur freeprocess. The Unit in Haliyal KN has sustained the production of Sulphur free processsugar with Quality.

Quality Initiatives

• Nellikuppam and Haliyal Units qualified for KosherCertification.

• Sankili unit successfully recertified for Integrated Managementsystem certifications which includes Quality Management System ISO 9001:2015Environmental Management System ISO 14001:2015 and OH & S ISO 45001:2018

• Nellikuppam and Haliyal Units upgraded to Food Safety SystemCertifications ISO 22000 Version 5.

• Haliyal Units recertified for Quality Management System ISO9001: 2015 Version.

• Nellikuppam and Haliyal qualified for SMETA 6.0 (Sedex MembersEthical Trade Audit).

Research & Development and Extension Services

The company has a pioneering vision to improve the yield and reduce thecost of sugarcane cultivation for farmers and to improve the sugarcane quality forefficient factory operation. To attain this vision

a robust and business aligned R&D and extension function is inoperation with state-of-the-art Research laboratories and farms. The R&D wing operateswith focused mid-term and long-term strategies that are bound to reap rich dividends interms of capacity and quality of raw material supply from farmers within stipulatedtimelines.

The year witnessed many varieties that were developed and launched andnew initiatives pursued in line with the business strategy through in-house productresearch and collaborations with leading institutions NGO's and supply chainpartners. Notable achievement in developing new varieties were the launch of two new“super early maturing varieties” for commercial cultivation by farmers inSankili and Nellikuppam. A project titled “P240” was chartered in 2017-18 todevelop varieties that can mature in 8-9 months and enable farmers to reap three harvestsin two years instead of the conventional two crops in two years coupled with increase insugar recovery by 0.5%. The two varieties occupy 22% of the plant area in Sanklili and 35%of plant area in Nellikuppam. The company has currently developed the highest area of thenew varieties in the country. This initiative done in a span of just two years wasfostered through a collaborative project with Sugarcane Breeding Institute (ICAR) andIndian Sugar Mills Association (ISMA) in-house varietal development program and augmentedwith rapid seed multiplication through In-house Tissue Culture technology and captive seedfarms is well received by farmers and lauded by the Government.

In the field of crop agronomy notable achievement was the developmentof IOT enabled automatic soil moisture recorder in farmer fields linked to the canemanagement system. This soil moisture based harvest scheduling which is expected tomaximize sugar recovery by 0.5% as evinced in trials is being taken up for large scaleapplication. Soil mapping based fertilizer prescription through integration with canemanagement system has been carried out to enable need based and precision nutrientrecommendation as health cards and application by farmers resulting in significant costsavings for farmers and enhancing sugarcane quality.

The company has pioneered in initiating R&D on a novel ICT basedsystem of autonomous irrigation in sugarcane for the first time in the country inpartnership with Companies in Israel and UK and aided by its supply chain partner. Thesystem will transform the way irrigation water is applied where precise quantities ofwater with intervals is solely decided by the crop based on its own requirement andwithout any intervention by the farmer. This technology will pave the way for watersavings up to 35% especially in sugarcane which is considered as a water intensive cropand with added benefits of crop yield and quality maximization.

In the field of pest and disease management novel products launched in2018-19 elicited excellent reception amongst farmers and hence the technology was adoptedin around 3000 acres during the financial year. The company is also in the process ofevaluating alternate crops like tropicalized sugar beet and sweet sorghum for sugar andethanol production as intercrop and relay crops to maximize

farmer income. To foster sustainability in business the company hassigned an Memorandum of Understanding (MOU) with World Wide Fund (WWF) India and RaboBank for developing an integrated Decision Support Tool (DST) by March 2022 for thefarmers. This tool will foster complete IOT enabled solutions to the new generationfarmers for precision farm management. Pilots have been initiated across two factorieswith promising results and is under the process of development.

As a testimony to our stewardship in R&D and Extension servicesthe company was conferred the Agriculture Leadership Award for 2019 in the 9thAgricultural Leadership Conclave by the Hon'ble Union Minister of Agriculture.

Value Added Projects

• In India most of the distilleries have installed incinerationboiler and started operation. The ash generated from the boiler contains potash between 5to 12%. As per FCO norm the potash content in potash fertilizer should be 14.5% as watersoluble potash. The Company has undertaken a pilot study to establish the extraction ofpotash from ash. As the opportunity for potash fertilizer availability in India is plentyand since the Company is already a pioneer with established technology & product theCompany propose to carry out a pilot study on this concept.

• The Company is exploring opportunities to convert SugarDistillery & Nutra By-products (waste) into value added Product suitable forAquaculture Poultry & Animal Husbandry.

• The Company has developed nutrient rich eco-friendly soil lessmedia from sugar cane bagasse for the international and domestic market. The company hasdeveloped green grow media from bagasse by a mechanical process by sustaining EC and PHsuitable to grow all kinds of plants and to conserve soil and water and to improvefertility of the soil and productivity. The Company has already designed the pilot scaleplant and started trial production. Green grow media samples of 100 MT in differentcombinations has been produced and demonstration plots have been laid out in tea peppersugarcane avocado mushroom vegetable ornamental crops avenue tree crops and cutflower nurseries in India. This has also been demonstrated to improve soil & waterconservation in neem avocado and pomegranate plantations.

• The Company has developed mineralised salt lick for smallruminants from Nutra process waste with the collaboration of Tamil Nadu University ofVeterinary and Animal Sciences Madhavaram (TANUVAS).

• The Company has signed MOU with TANUVAS to develop nutrient richdry fodder block for cattle. Animal adaptation trial completed.

• Project to develop Bioplastic i.e degradable mulching sheet andpoly bags from Bagasse is under progress.

• The Company has started Scientific field trial and demonstrationin Organic and Inorganic Tea plantation with UPASI Coonor.

SUGAR DIVISION - PERFORMANCE Operational Performance

Particulars 2019-20 2018-19
Cane Crushed (LMT) 36.72 37.19
Recovery (%) 9.99 10.11
Sugar Produced (LMT) 3.60 3.76
Power Generated (Lakh Units) 3572 3274
Alcohol Produced (Lakh Litres) 634 647
Sugar sold (LMT) 3.73 4.04

Cogeneration- Power

The Company has an aggregate saleable co-generation capacity of 160megawatts. Of the total power generated the Company exports nearly 52% to the stateelectricity grid. The cogeneration segment accounted 7% of the Company's revenuesduring the year same as in 2018-19. Revenues from the segment during 2019-20 stood at Rs131 Crore as against Rs 125 Crore in 2018-19.

Tamilnadu: The units in Tamilnadu generated 1554 units andexported 793 Lakh units of power during the year as against 1338 Lakh units and 652 Lakhunits respectively in the previous year. The increase was mainly on account of higher canecrushing.

Financial Performance

Particulars

Sugar

Cogen

Distillery

Total

2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
Revenue 1377 1386 131 125 357 317 1865 1828
EBITDA** 53 (30) (5) (2) 79 44 127 12

** Earnings before interest tax depreciation and amortization.

Segment wise Performance & OperationalHighlights Sugar

The sugar segment constituted the largest share of the Company'srevenues. The segment contributed 73% of the Company's revenue from operations during2019-20 as against 75% in 2018-19. Revenues from the sugar segment during 2019-20 was atRs 1377 Crore as against Rs 1386 Crore in 2018-19.

The Company has eight sugar plants with a combined capacity of 43800TCD. During the year the total cane crushed in Tamilnadu plants increased to 13.77 LMT asagainst 12.46 LMT in the previous year. There was a decline in overall recovery in TamilNadu from 8.82% in 2018-19 to 8.69% in 2019-20. Crushing in the Company's Sankiliplant at Andhra Pradesh also increased to 5.33 LMT as compared to 5.05 LMT in the previousyear with recovery of 8.83% as against 9.23% in the previous year. In AP at the statelevel there has been a substantial dip in recovery due to the changing weather patterns.

The total cane crushed by the units in Karnataka was at 17.62 LMTagainst 19.68 LMT in the previous year. The average recovery was at 11.35% as against11.15% in the previous year.

The overall cane crushed by the Company was 36.72 LMT in 2019-20 asagainst 37.19 LMT during the previous year. Overall recovery of all the units of theCompany went down from 10.11% to 9.99% in the current year. While the recovery was betterin KN it was lower in TN and AP

During the year the Company produced 3.60 LMT of Sugar and sold 3.72LMT of sugar.

During the year the Company obtained in-principal approval for sale ofpower under open access-bilateral from TANGEDCO and accordingly it commenced third partypower sale from January 01 2020 in addition to sale of power through exchange from itsNellikuppam generation plant. This initiative fetched an additional realization of Rs 0.75- Rs 1.00 per unit of export.

Karnataka: The cumulative power generated and exported by theKarnataka Plants stood at 1653 Lakh units and 960 lakh units as against 1615 Lakh unitsand 887 Lakh Units respectively in the previous year.

Andhra Pradesh: The unit in Sankili generated 364 Lakh units andexported 121 Lakh units as against 321 Lakh unit and 97 Lakh units respectively during thelast year.

Distillery

The Company has four distilleries located at Sankili HaliyalNellikuppam and Sivaganga engaged in the production of industrial alcohol and ethanol witha cumulative capacity of 234 kilolitres per day. Almost the entire distillery capacity ofthe Company is dedicated towards ethanol & ENA (Extra Nutral Alcohol). In addition 90KLPD new distillery at Bagalkot is under construction.

The distillery segment contributed to 19% of the Company's revenuefrom operations during the year under review as against 17% in 201819. Revenues from thedistillery segment during 2019-20 stood at Rs 357 Crore as against Rs 317 Crore in2018-19.

The Company's alcohol production from molasses a by-product ofsugar saw a downward dip at 634 Lakh liters in 2019-20 as against 648 Lakh liters in2018-19 a decrease of 2% over the previous year.

Ethanol

The Company has mapped out expansion plans for Ethanol production atits integrated Plants. The Company is setting up a 60 / 90 KLPD Molasses based distillerywith production volume of 60 KLPD ENA from C - Molasses 90 KLPD Ethanol from B heavymolasses / sugar cane syrup at Bagalkot Karnataka. Expansion of the existing distilleriesat Nellikuppam Haliyal and Sankili and the commissioning of a new distillery at Bagalkotare part of the strategies for growing the ethanol stream as a revenue earner subject tosustained availability of molasses.

During the year the Company secured approval from the Government ofAndhra Pradesh to use sugar syrup for the manufacture of Ethanol. The Sankili plant isthe first unit to get such approval in Andhra Pradesh.

The Company has already obtained approval from the Department of Food& Public Distribution for its expansion projects under the Central Government Schemeextending financial assistance to mills for Enhancement & Augmentation of EthanolProduction Capacity.

During the year the Company secured permission from the Government ofTamil Nadu to utilize 10000 MT of molasses for production of Ethanol for manufacturing ofalcohol-based sanitizers for combating the outbreak of COVID-19 epidemic. Similarly theCompany secured license to manufacture Ethanol Hand Sanitizer at its Haliyal Plant for aperiod of 5 years from March 26 2020. The Company's Sankili Unit also has beenpermitted to produce hand sanitizer to the tune of 1 lakh liter.

Performance Analysis Opportunity & Threats

The Company is a large integrated sugar producer and among the top fivesugar producers in South India. It has the capacity to crush 43800 MT per day (TPD) ofsugarcane co-generation units of 160 megawatt and distilleries with capacity of 234 Kilolitres per day. Besides it operates a sugar refinery of 3000 TPD through its wholly ownedsubsidiary Parry Sugars Refinery India Private Limited (PSRIPL). Large scale integratedoperations with power and distillery business along with nutraceuticals provide modestcushion to the Company from the sugar business cyclicality. Sugar crushing in Tamil Naduhas continuously declined over the past 3-4 years and is expected to marginally improvein the current sugar season. Lower cane availability and volatile sugar prices have led tomoderation in the Company's performance in recent past. However co-generation anddistillery business have partially stemmed the impact of weak performance of sugarbusinesses. While the input prices are driven by the Government sugar prices oflate arealso controlled by the Government through MSP and regulating the export of sugar leadingto volatility in sugar business profitability. The Government has also been regulating thedomestic demand-supply through restrictions on imports and exports and stock holdings.Regulatory mechanisms and dependence on monsoons have rendered the sugar industrycyclical.

While the Company's operating profitability may improve marginallydue to cost reduction initiatives and shut down of non-operating plants in Tamil Nadu dueto inadequate cane operating profitability will be impacted by reduction in industrialusage of sugar lower demand for ethanol and fall in exports of sugar.

The industrial usage of sugar which accounts for nearly two-thirds ofthe annual demand of around 26 MMT may be impacted as several food manufacturing unitsincluding soft beverages chocolates confectionery bakeries hotels restaurants andcafes are either shuttered or running at low capacities. As a result overall domesticdemand is expected to be lower by 1.5 - 2 MMT in the current sugar season (SS) 2020 asreflected in the trend in softening sugar prices.

Further oil marketing companies may reduce the ethanol off-take sincethe lockdown due to the COVID-19 pandemic has lowered the demand for petrol and diesel.Besides they have also limited storage capacity. Production of potable alcohol fromethanol may also be impacted due to lower demand from distillers.

In the milieu sugar inventory becomes the key monitorable. India hadstarted the SS 2020 with an opening stock of 14.5 MMT However despite around 20% lowerproduction the closing inventory is likely to be at 10 - 11 MMT which is equal toapproximately five to six monthsRs consumption because of slack industrial demand andexports.

The saving grace for domestic sugar mills is the MSP of Rs 31 per kgfixed by the government. But for this sugar realisations would have fallen further giventhe high stock levels. Consequently lower accruals and higher inventory are expected toelevate debt levels especially on working capital front for most sugar producers. Withsugar output expected to increase by at least 15-20% in SS 2021 performance for mostsugar players is expected to remain subdued in the financial year 2021- 22.

The Company's financial performance moderated in the financial year2019-20 as cash accruals were impacted following subdued performance of the sugarbusiness. Further stockholding restrictions imposed by the Government led to piling up ofinventory a large portion of which was funded through bank borrowings. However thefinancial risk profile has gradually recovered with better realisations from domesticsugar and distillery businesses.

The Company is expected to incur a capex of about Rs 160 Crore duringthe financial year 2020-21 towards setting up of new ethanol capacities by availing softloans announced by the Government and expansion projects at its Haliyal unit and otherreplacement capex on need basis. The expected dividend flows from subsidiaries andpossible proceeds from sale of surplus assets are expected to help lower the volatility inoperational cash flows. While short term debt levels of the Company were expected toremain range bound and long term debt repayments of around Rs 330 Crore during 2021 and2022 were expected to lower consolidated debt levels by around 5-10% over the medium termat year end the position changed significantly in the first quarter of 2020-21 after thecompany prepaid

its debt of Rs 365 Crore from the proceeds of the sale of 1.99% sharesheld in its subsidiary Coromandel International Ltd. The long-term debts of the Companyare now at a comfortable level which will allow the Company to substantially reduce itsinterest costs and will leverage its borrowing power further.

Outlook

The Company expects to register marginal growth in the financial year2020-21 due to better realisation from sugar and alcohol. Retail and institutionalsegments are expected to register modest growth over last year and exports quotas areexpected to be fulfilled with better price. However institutional sales which account for20 - 25% of the company's sugar volumes may be affected by lower demand from end-userindustries due to reduction in sugar consumption following the Covid-19 pandemic. Besidesrevenues from distillery operations too are expected to to be slightly affected due tolower offtake for blending of ethanol with petrol by oil refining companies and formanufacture of potable alcohol though the sale of ethanol for manufacture of sanitisersmay increase.

During the financial year 2020-21 due to higher expected sugar outputin the country sugar price will remain under pressure. Despite flattish sugar anddistillery revenues the closure of loss making plants in Tamil Nadu the cost reductionmeasures including rationalization of work-force reduction of debt along with theexpectation that there will not be any increase in cane procurement cost is expected tosupport the operating profitability over the medium to long term.

The performance of the Company's subsidiary PSRIPL is expected to bebetter in the financial year 2020-21 as spreads have been locked in for substantialvolumes at higher than current trending rates. Earlier in the previous two financialyears PSRIPL reported sub-par performance due to weak global sugar prices coupled withdelay in off-take by its customers owing to falling spreads.

The Company's established market position in sugar businessderived from integrated nature of operations with diversified revenue profile andfinancial flexibility are partially offset by the susceptibility of its businessperformance due to cyclicity of the sugar business and regulatory changes in the sugarindustry.

Impact of COVID-19 Pandemic

The spread of COVID-19 has severely impacted businesses around theglobe. In many countries including India there has been severe disruption to regularbusiness operation due to lock downs disruptions in transportation supply chain travelbans quarantines social distancing and other emergency measures.

The Company's significant business is sugar and it has beenidentified as an essential service. The Company's factories were operating during thelockdown by strictly adhering to the laid down safety guidelines and norms and the Companywas able to complete the crushing of entire sugar cane available albeit with slight delay.

However there were delays in dispatches on account of logisticalissues. We hope that the pandemic is going to be a temporary phenomenon and we expect theeconomy recovers quickly and the normalcy is restored.

NUTRACEUTICALS DIVISION Industry Overview

The nutraceutical ingredients market was valued at US$ 36.75 Bn in 2019and is projected to grow at a CAGR of 7.3% to reach US$ 62.06 Bn by 2027. Thisconstitutes around 8% of the total Nutraceuticals market (US$ 459 Bn). World demand forminerals and vitamins consumed in nutraceutical applications was US$ 7.8 Bn in 2019growing at an annual rate of 6 - 7% fuelled by growth in food and beverage fortificationadult and paediatric nutritionals and dietary supplements. Rising consumer awareness andan increase in purchasing power due to economic developments widespread acceptance ofhealth and wellness benefits will keep minerals and vitamins among the most widely usednutraceutical ingredients.

By Region Asia-Pacific is projected to be the fastest-growing marketfor nutraceutical ingredients during this period. While USA and Europe are going to driveinnovations APAC will drive the volumes. Based on projected investment levels in theseindustries and rising consumer incomes China is expected to evolve as the largest globalproducer and consumer of nutraceutical ingredients and may surpass the United States andWestern Europe. Japan is the fastest-growing country market in the Asia-Pacific region.This is due to the rapidly aging population in Japan. Global microalgae-basednutraceutical ingredient market currently valued at US$ 0.8 Bn is expected to grow at ahealthy CAGR 7% in the next 8 years.

Business Overview

The Company's Spirulina volumes was subject to more pressure dueto commoditisation across markets. The business proposes to stick to its value propositionas a quality player and work on expanding markets in Europe and the US in selectiveniches. For more price sensitive markets in Asia the business aims to adopt a moreaggressive approach in the coming year in order to be competitive with global rivalries.

Chlorella is gaining importance as an essential micro-algae supplementalong with Spirulina. With the increase in popularity and adoption of vegan diets acrossevolved health-oriented consumers Chlorella is seen as a powerful detox agent with richvitamin profile. In 2019-20 the Company started scaling up of commercial production ofChlorella and achieved reasonable success in stabilizing the cultivation and harvestingprocesses. In 2020-21 it has been envisaged to double the volume of production over theprior year.

The launch of the Phycocyanin product will further strengthen thecompany's product portfolio and add another pillar of growth.

The business in addition to the Organic and USFDA approval hasembarked on a journey to upgrade its overall Quality Management System from supplier toend consumer. During the year various projects such as laboratory control batchtraceability facility and equipment qualification QMS and training were implemented aspart of the process and will be further extended to all Good Manufacturing Practice(cGMP) procedures and norms. In addition as a part of clean label program OrganicSpirulina and Chlorella received the Non-GMO verification.

The Company continued its Compliance journey by putting in place cGMPprocesses across its Units. There is also a big focus on Sustainability from a WasteWater and Energy perspective. The Company believes that this is its first responsibilitytowards society and the environment and will also strengthen its business operations andefficiencies over time.

During the financial year 2019-20 the US Nutraceuticals Inc. (Valensa)gained higher Saw Palmetto based products sales by applying better supply chain strategy.Alimtec had produced with sustainable quality and yield with profit of 449 K US$ asagainst 478 K US$ of the previous year.

Micro - Algae Market Share - Regions

The Company continues to be a leading player in the EU markets fororganic grade spirulina and over the last 3 years the business in this region has doubled.

Operating Results

During the year the Nutraceuticals Division of the Company achieved arevenue from operations of Rs 58 Crore about 79% of which represents exports as againstRs 69 Crore during the previous year representing 3% of the Company's revenue. Lossbefore interest and tax for the year stood at Rs 8 Crore as against a profit of Rs 2 Croreduring the previous year. The overseas wholly owned subsidiary

US Nutraceuticals Inc. achieved sales of US$ 21.52 million against US$20.19 million of previous year. On a consolidated basis revenue remained flat at Rs 210Crore for the years 2019-20 and 2018-19.

The sales of Spirulina and Chlorella affected across all the regions 6to 9% over last year due to continuous price pressure and Chinese competition. Thebusiness was impacted in Q4 2019-20 due to the outbreak of the Pandemic Globally.

Outlook

Global trends in nutraceutical ingredients will result in developingregions achieving much faster growth in both consumption and production than developedregions. The Company's Joint venture with Synthite Industries (Algavista GreentechPrivate Limited) launched Natural Blue colour (Phycocyanin) in the global colour marketduring the year after successfully commenced its operation. This will propel growth forvalue-added products from Spirulina. The Company's R&D efforts would be focusedon 3 broad areas - Green foods Protein and Algal Omega 3. The Company expects to launchproducts under these categories in the coming years. Further the business is embarking ona journey of sustainability in the areas of Water Waste and Energy. Water will be a bigarea of focus with the Company aiming at conservation and recycling as two primaryobjectives.

COMPANY FINANCIAL PERFORMANCE (STANDALONE) Revenue

Rs in Crore

BUSINESS SEGMENTS 2019-20 2018-19
Sugar 1377 1386
Cogen 131 125
Distillery 357 318
Sugar Total 1865 1829
Nutraceuticals 58 69
Total 1923 1898

Note: Above includes inter segmental revenue.

EBIDTA

The Earnings before Interest Depreciation Tax and Amortization forthe year was Rs 235 Crore representing 12% of total revenue as against Rs 414 Crorerepresenting 20% of total revenue in the previous year 2018-19.

EBIT

EBIT for the year 2019-20 was Rs 116 Crore as against Rs 300 Crore inthe previous year 2018-19.

Finance Charges

The finance charges was Rs 136 Crore for the year 2019-20 as against Rs113 Crore in the previous year 2018-19.

DEPRECIATION

Depreciation was Rs 120 Crore for the year 2019-20 as compared to Rs114 Crore in the previous year 2018-19.

PBT

Loss Before Tax for the year 2019-20 stood at Rs 20 Crore as againstprofit before tax of Rs 187 Crore in the previous year 2018-19.

PAT

Profit After Tax for the year 2019-20 stood at Rs 2 Crore as against Rs163 Crore in the previous year 2018-19.

FINANCIAL OVERVIEW Networth

The Networth as on March 312020 was Rs 1714 Crore same as on March312019.

Borrowing

The borrowings of the Company increased from Rs 832 Crore in 201819 toRs 1035 Crore in 2019-20. The Long-Term Debt is 0.32 times of equity as against 0.27times of equity in the previous year. Working capital borrowing utilized was Rs 492 Croreas on March 312020 as against Rs 375 Crore as on March 312019.

Fixed Assets

The Company has incurred Rs 93 Crore (Rs 52 Crore during the previousyear) on Capital expenditure during the year.

Investments

The total investment of the Company as at March 31 2020 was Rs 1003Crore (Gross) as against Rs 979 Crore as on March 312019. The following investments weremade during the year:

• Rs 15 Crore in Parry Sugars Refinery India Private Limited

• Rs 4 Crore in Algavista Greentech Pvt Ltd a Joint VentureCompany

• Rs 4 Crore in US Nutraceuticals Inc.

Sale of Holdings

The Company on June 02 2020 sold 5850000 equity shares (Fifty EightLakh and Fifty Thousand Shares) of Rs 1/- each held in its subsidary CoromandelInternational Limited (CIL) in the open market. Post the abovementioned sale the Companyholds 171305580 shares of Rs 1/- each representing 58.48% of the paid- up capital ofCIL.

Rating

During the year rating agency CRISIL has reaffirmed its credit ratingto the Company's Long-Term Rating to “CRISIL AA-/ Stable” and reaffirmedShort Term Rating as “CRISIL A1+” for its Short Term borrowings.

Book Value and Earnings per Share

Book Value of shares of the Company remained flat at Rs 97 per sharefor the year ended March 31 2020 and March 31 2019. Earnings per share decreased to Rs0.10 per share for the year ended March 312020 from Rs 9.21 per share for the year endedMarch 312019.

RATIOS

Particulars 2019-20 2018-19
Key Profitability Ratios
EBIDTA / Sales % (Operating Profit Margin) 12.54 22.44
PAT / Sales % 0.10 8.84
PAT / Networth % (ROE) 0.11 9.52
Key Capital Structure Ratios
Debt / Equity Ratio 0.60 0.49
Outside Liabilities / Networth 1.38 1.28
Net Fixed Assets / Networth 0.80 0.78
Debt Service Coverage Ratio 0.96 0.91
Interest Service Coverage Ratios 1.73 3.65
Liquidity Ratios
Current Ratio 0.81 0.79
Inventory Turnover (days) 188 207
Receivables (day gross sales) 31 34
Earnings and Dividend Ratios
Dividend % - 300
Earnings Per share (?) 0.10 9.21
Book Value Per share (?) 97 97
P / E Multiple 1390.50 22.22

In accordance with the SEBI (Listing Obligations and DisclosureRequirements (Amendment) Regulations 2018 the Company is required to give details ofsignificant changes (change of 25% and more as compared to the immediately previousfinancial year) in key financial Ratios.

Ratios where there has been significant change from financial year2018-19 to financial year 2019-20

Reduction in operating profit margin net profit margin return onnetworth Interest Service Coverage Ratio (ISCR) and Earning Per Share

Though the sugar business performed better as compared to last year dueto increase in Minimum Selling Price (MSP) by the Government the operating profit marginnet profit margin return on networth Interest Service Coverage Ratio (ISCR) and earningsper share were reduced on account of one time profit accounted in the previous year fromthe sale of Bio-Pesticides Business and sale of investments in Parry America Inc coupledwith reduction in Dividend income from the Subsidiary and increase in Finance cost.

P/E Multiple:

Though the market price of the share has declined PE ratio hasincreased because of decrease in net profit (reason explained above) and the EPS beingless than a rupee.

RISK MANAGEMENT

The Fourth Industrial Revolution fuses various technologies such asArtificial Intelligence (AI) the Internet of things (IoT) 5G telephony NanotechnologyRobotics Quantum computing and many more. Risks are becoming increasingly complex andinterconnected. The need for increased collaboration among all functions cannot beoveremphasized. A black swan event like the COVID-19 pandemic has turned our traditionalunderstanding of risk on its head. A clear and comprehensive Risk Management frameworkwhich is understood by all is paramount to eliminate blind spots to risk. Establishing aRisk Management framework with a clear understanding of the risk landscape and a clearlyidentified Risk appetite and ensuring that

all the business functions are aligned to this is important to avoiddisconnects.

The Company follows a well-defined Risk Management policy whichrequires the organisation to identify the risks the businesses are exposed to andcategorise them based on the impact and probability of occurrence. Mitigation plans arelaid out for each risk along with frequency of risk monitoring and identification of therisk owner thereof. The Company endeavors to continuously improve its systems processesand controls to mitigate the risks.

The Company has a robust Risk Management framework to identifyevaluate business risks and opportunities. This framework seeks to create transparencyminimize adverse impact on the business objectives and enhance the Company'scompetitive advantage. The Company's Risk Management framework defines the risk managementapproach across the enterprise at various levels including documentation and reporting.

Risk Category Risk Mitigation Plan
Business and disruption Risk Global pandemic with no predictable end point has resulted in revenue shortfalls changing regulator expectations health risk of workforce possibility of decline in product quality. The Company has ventured into the business of Hand Sanitisers which offers a good opportunity till the COVID-19 Pandemic subsides.

Essential visitors are only allowed in our facilities reinforcement of frequent use of hand sanitation stations throughout the plant Enhanced cleaning efforts using certified sanitation products and Antibacterial wipes in breakrooms and common areas are being strictily enforced.

Employees with flu-like symptoms are advised to stay at home and inform HR and also to advise if family member have flu-like symptoms.
Institution and Trade business would be impacted in the first half of the financial year 2020-21. Digital media is being used to highlight the hygiene aspects of packed retail sugar and jaggery.
Continuous dialogues are held with customers to allay their concerns.
Stress testing of financials is being done to understand the various scenarios and steps are being taken to improve the situation where necessary.
Availability of Migrant Labour for cane harvesting could be impacted. Deployment of local harvesting labour and selfharvesting is being focussed upon. Farmers are being encouraged for wider row planting and for increasing the share of mechanised harvesting.
Product quality risk due to contamination. Strengthening Good Manufacturing Practices (cGMP) and Quality Management Systems (QMS).
Adequate insurance cover for liability on product quality issues is in place.
Sensorial panels are established to track and stabilize quality.
Possibility of increased fraud risks due to possible Segregation of Duties (SOD) conflicts Manuals/SOPs not updated with relevant Business Continuity Plan and Disaster Recovery (BCPDR) procedures nonmaintenance of paper/digital trail lack of awareness and clarity of cyber security risks management override of controls etc. Controls are being reviewed in the revised scenario. Management override checks are being monitored regularly.

Awareness is being created and importance of cyber security risks is being frequently communicated and explained to the employees.

Sugar Price Risk Due to domestic surplus there could be a softening in the sugar prices affecting the profitability. The Company is focusing on increasing retail volumes by increasing retail outlet placements and expanding retail infrastructure. The Company is making efforts to increase the market share of Institutional business though robust quality systems obtaining customer certifications and retaining the existing customers.
Raw Material Availability Risk Due to the adverse weather conditions availability of water pests and diseases outbreak and farmers switching to alternate crops for higher remuneration etc. availability of sugarcane may be impacted thereby diminishing profitability. The Company connects with the farmers continuously by educating them on scientific and sustainable sugarcane cultivation methods besides providing them high yielding sugarcane seeds / saplings that give better yield. The Company also promotes mechanised harvesting for timely harvesting and making sugarcane a profitable crop. Cane team is working on reducing the cost of cultivation increasing the yield per acre and thereby the income per acre. The Company launched “Farmers Connect” app for better interaction and to support the farmers instantly. The Company enjoys a good brand value and trust amongst the farmer community by ensuring timely payments and is thus a preferred partner for sugarcane supply. The R&D initiatives of the Company takes control measures to mitigate and contain pests and diseases.
Water availability is a critical requirement of Nutra Business. For the Nutra business measures have been taken to treat wastewater maintain downstream water quality and minimise groundwater infiltration to minimise damage to aquatic ecosystems. Water conservation project has been taken up with AMM foundation.
Raw Material Pricing The Central and State Governments decide sugarcane prices in a manner that is not linked to sugar prices. Unviable sugarcane prices may impact the profitability of the Sugar division. The Company is a member of Indian Sugar Mill Association (ISMA) and the South Indian Sugar Mills Association (SISMA) and works closely with them towards developing appropriate policy recommendations to represent the industry needs to the government.
Investment Risk The company has invested in Parry Sugars Refinery India Private Limited and Valensa all wholly owned subsidiaries. Any non- performance of the invested entities will have a risk of sub-optimal return on investment. Periodical review mechanism is in place to monitor the investment risk of the portfolio of assets and to oversee the strategic decision.

There is an emphasis on entering new customers segments increased spreads low process loss by the subsidiary Parry Sugars Refinery India Pvt Ltd.

Cyber Security Risk The Company may encounter non-availability of service or failure of multiple systems which may lead to disruption in business operation due to lack of adequate processes cyber security backup and disaster recovery systems. Information Systems Backup and Disaster Recovery Policies and periodical review of the same are in place. Robust Firewall and Security Event Information Management Systems are in place to monitor all types of Security breaches and take corrective measures.
Risks may be encountered in the COVID-19 scenario due to remote workforce work-from-home options (WFH) unsecure platforms network connectivity threats risks due to increased VPN and mobile device usage for work etc. Further user awareness about cyber security risks are being spread by periodical training/information through emails etc.

Provided rental / own device systems with adequate software installed.

Secure connection (VPN - Virtual Private Network) is made mandatory for accessing applications from remote location.
All servers are monitored through SIEM tool (Security Information and Management Tool). Logs are analysed by Murugappa group information security team.
All meetings/conferences are being conducted through licensed secured collaboration tool (Microsoft Office 365). Blocked freeware tools like ZOOM etc.
Phishing emails are getting monitored by security team if any such incidents are identified.
Non-compliance to changing statutory regulations As a listed organization the company has to comply with laws such as Companies Act SEBI (Listing Obligations and Disclosure Requirements) Contract labour Taxation Foreign Exchange & Export Controls Health Safety and Environment (HSE) regulations etc. Failure to comply with these regulations could result in penalties and reputational damage.

COVID-19 could bring about regulatory changes which could result in operational interruptions business restrictions.

A comprehensive e-compliance management system has been deployed across the company to manage the compliance to all the applicable statutory regulations. Further respective functional teams track the changes to applicable regulations across various jurisdictions and functional areas and update the e-compliance management system and also create awareness of the changes across the respective functions.

INTERNAL FINANCIAL CONTROLS

The Company has aligned its current systems of Internal FinancialControl (IFC) with the requirement of the Companies Act 2013. The Company has establisheda robust framework of IFC which includes entity level policies processes and operatinglevel standard operating procedures. The Company has a well-established processes andclearly- defined roles and responsibilities for people at various levels.

The Company's internal controls are adequate with its size and thenature of its operations. These have been designed to provide reasonable assurance withregard to recording and providing consistent financial and operational informationcomplying with the applicable statutes safeguarding assets from unauthorized useexecuting transactions with proper authorization and ensuring compliance with policies.Processes for formulating and reviewing annual and long-term business plans have been laiddown. The Company uses a state-of- the-art enterprise resource planning (ERP) system SAPas a business enabler to record data for accounting consolidation and managementinformation purposes. During the year the business migrated from erstwhile SAP ECC 6system to SAP HANA and successfully went live effective from 03.10.2019.

In the post-COVID scenario the company propose to increase the use oftechnology data analytics rely on electronic work paper and adopt an agile InternalAudit plan. To further strengthen assess and report on the internal financial control anin-house Management Audit Division has been established by the Company which is ISO9001:2015 certified. The internal audit is conducted based on the Annual Audit Plan whichis reviewed and approved by the Audit Committee. The Internal Audit reports are presentedto the Audit Committee on a quarterly basis for review and deliberation. The CompanyManagement has assessed the effectiveness of the Company's internal control overfinancial reporting as of March 31 2020 and found the same to be adequate and effective.Going forward your company has decided to have a blend of both in-house and outsourcedInternal Audit team which will help us to leverage our business knowledge and process andcombine it with the expertise of the outsourced auditors in specialised areas.

SUBSIDIARY COMPANIES

There has been no change in the nature of business of the subsidiariesduring the year under review. In accordance with Section 129(3) of the Companies Act2013 the Company has prepared a consolidated financial statement of the Company and allits Subsidiary Companies which forms part of the Annual Report. A statement containingthe salient features of the financial statements of the Subsidiary Companies Jointventures and Associates are given in Annexure-A to this Report.

In accordance with the provisions of Section 136(1) of the CompaniesAct 2013 the Annual Report of the Company containing standalone and consolidatedfinancial statements has been placed on the website of the Companywww.eidparry.com/financials/. Further the audited accounts of the Subsidiary Companiesand the related detailed information have also been placed on the website of the Companywww.eidparry.com/financials/. The annual accounts of the Subsidiary Companies will also beavailable for inspection by any shareholder/ debenture trustees at the Registered officeof the Company and of the Subsidiary Companies concerned during working hours upto thedate of the Annual General Meeting. A copy of annual accounts of subsidiaries will be madeavailable to shareholders seeking such information at any point of time.

Parry Sugars Refinery India Private Limited (PSRIPL)

During 2019-20 global sugar market turned from a surplus to deficitdue to lower sugar production in key producing nations such as Brazil (due to betterethanol prices) and India (due to weather). An unprecedented drought in world'slargest white sugar exporter Thailand reduced its sugar production resulting in tightsupply of refined sugar. Consequently the white premiums and refining spreads improvedsignificantly in 2019-20. Refined sugar demand was particularly strong in the second halfof the year. Capitalising on this market opportunity PSRIPL established its position asone of the globally renowned re-export refiner of sugar offering a range of qualityproducts for international trade and institutions.

During the year despite competition from subsidised exports fromIndian mills (under MAEQ scheme) the company's sugar export volume grew by more than40% from 5.35 LMT in 2018-19 to 7.59 LMT in 2019-20. Consequently the turnover increasedfrom Rs 1434 Crore in 2018-19 to Rs 2009 Crore in 2019-20. During the year the companyincreased its sales through containers by more than 50% and also scaled up its exports toprestigious institutional customers. Company's refining operations continues to setnew records in throughput and efficiencies.

During the year Parry International DMCC (a wholly owned subsidiarybased out of Dubai) successfully continued its sugar trading operations and recorded arevenue of AED 19.5 Million.

Due to steep fall in oil prices and depreciation of Brazilian RealBrazilian mills are expected to maximise their sugar production in 2020-21. This coupledwith a normal monsoon predicted for India is expected to move the global sugar market toa small surplus in 202021. However continuing dry weather in Thailand is helping to keeprefined sugar supply tight with higher spreads for refining. Impact of Covid-19 pandemicseems to be muted on global sugar consumption. PSRIPL with well hedged spreads is betterpositioned to grow its sales with increasing focus on value added segments whilst makingfurther improvements in refining costs during the year 2020-21 .

US Nutraceuticals Inc

During the year the Company's wholly owned subsidiary USNutraceuticals Inc achieved sales of US$ 21.52 million against US$ 20.19 million ofprevious year. The Ingredients segment grew at 24% over previous year. The drop-informulation segment sales were due to lower sales of prostrate and joint health products.The business faced margin loss in the year due to stiff competition. During the year thebusiness launched its B2C channel with the brand called “Flomentum” in thelocal market. The response has been a very positive since its launch and from the endconsumers. Through this the Company expects to grow in significant way in the comingyears. The company has been investing a lot in clinical trials for developing newformulations which would improve the business significantly in the coming years. Duringthe year US Nutraceuticals Inc acquired the balance stake of 51% in its AssociateLabelle Botanics LLC at a cost of US$ 650000 strengthening the supply chain of its sawpalmetto business.

Alimtec SA

Alimtec SA Chile the wholly owned subsidiary of the company has seenanother significant year in terms of sustainable production with better quality and yieldduring the year. The company has been constantly working towards bringing goodmanufacturing practices which will improve productivity with lower cost of production.Also from the investments made in the prior years on water quality improvements andarsenic filtration system has resulted in better productivity levels without anycontamination in the product during the year.

Coromandel International Limited (CIL)

The country witnessed an above normal south west and north east monsoonduring the year resulting in improved crop sowing and consumption of agri input products.CIL had a good performance in financial year 19-20. During the year the company made anall-round progress by improving its customer engagement branding capabilities andfurthering its operational efficiencies. Phosphatic sales volumes increased by 4% to 31.4lakh tons. Consumption as reflected through point of sales from retailers to the farmersincreased by 12% to 31.6 lakh tons. Sales of manufactured products went up by 11% to 30.7Lakh tons. Market share for primary sales marginally came down to 15.7% from 16.3%. Thecompany however maintained its market share for PoS sales at 15.8%. The Fertilizerbusiness relaunched GroSmart which has been well-received by the customers and has createda niche in the market. A second Phosphoric Acid plant was successfully commissioned duringthe third quarter of the year and is running smoothly. With this CIL's vizag plant is nowself-sufficient for its Phos Acid requirement.

Crop Protection Business registered a decline of 6% in revenue impactedby lower production from its Sarigam facility. Sarigam

facility resumed operations in July 2019. The business introduced 6 newproducts including two inhouse manufactured technical - Pymetrozine and Pyrozosulfuronand 4 formulated products in the market. All the new products have received encouragingresponse from the market. CIL has also commissioned 3 new plants in the crop protectionsegment for manufacture of Pymetrozine Pyrozosulfuron and Mancozeb WDG. Warehouse andother infrastructure upgrades were done at Dahej and Sarigam plants.

CIL continues to focus and invest in its R&D and productdevelopment initiatives. The CIL Lab at IIT Bombay in collabration with the Monash Academyhas made significant progress. A collaborative project has been initiated with IITKharagpur for the rapid testing of soil and petioles. The R&D facilities at Hyderabadand Thyagavalli focuses on crop protection & bio pesticide products and applications.Company's large retail network continues to promote balanced nutrition and yieldimprovements. Retail business strengthened its technology interventions in the areas ofcrop diagnostics farm advisory and farm mechanization. With the increased focus onorganic products bio pesticides bio stimulants and bio surfactants CIL continues topromote greener solutions in improving soil health and farm productivity.

During the year the employee engagement levels have improved acrossthe functions and relevant actions have been initiated based on the survey findings. CILssocial and environment commitment remains firm and it continues to work towards upliftmentof society in areas of health education community development and environment.CIL's revenue from operations for the year was at Rs 13117 Crores vs Rs 13204 Crorein the previous year. The Profit before Interest Depreciation and Taxation grew by 22% toRs 1763 Crore from Rs 1450 Crore in the previous year.

CILs response to COVID: CIL has prioritized the safety of itsemployees and the sustainability of its operations. All the plants are operating as pergovernment guidelines with utmost care for the safety and social distancing. Retailcentres are following social distancing norms while dealing with customers and utilizingdigital tools to fulfil customer requirements. To ensure business continuity and swiftresponse to any situation a “Rapid response team” has been formed acrossbusiness units and functions.

JOINT VENTURE COMPANY

Algavista Greentech Private Limited (AGPL)

The Company's Joint Venture AGPL is a leader in clean extractionand by crafting optimal processes in terms of performance product safety andenvironmental concerns AG PL guarantee an organic product of unparalleled quality. AGPLscertified spirulina extract rich in phycocyanin is a viable alternative for companiesconsidering a

transition from synthetic food dyes like the ‘BrilliantBlue'. AGPLs new plant at Oonaiyur Tamil Nadu was commissioned during the year andthe Commercial Production started w.e.f January 12020. AGPL has obtained Halal and Koshercertification for all their Product variants including Organic Variants. AGPL have alsoobtained Organic certifications for US-NOP EU Organic and India NPOP During the yearAGPL achieved sales of 698 Kg of Phycocyanin amounting to Rs 96 Lakh. AGPL has beenengaging with majority of Colour houses and CPG companies based in USA and Europe.

HUMAN RESOURCES

The Company believes that the people are its key assets and focuses onnurturing and developing human talent that delivers quality products manufacturingexcellence continued growth customer delight and business leadership. Company's HRvision of “Building Organizational Capability to deliver superior businessperformance” is delivered by a high level of policy deployment initiatives andcontemporary HR practices focusing on four key imperatives: Capability Development TalentManagement Employee Engagement and Productivity & Cost.

The Company enables every employee to achieve high standards ofperformance and take up challenging goals by institutionalizing Competency DevelopmentFramework. The Company scales up capabilities across various functions by creatingspecialist knowledge / subject matter experts in Sugar Distillery Cogeneration &Value Added Products to enhance the internal efficiencies. A lot of interventions havebeen rolled out in terms of enhancing the capabilities of executives especially theleadership team through individual development plans leadership coach accreditationprogram etc.

The Company is committed to build the ‘Best EmployerRs brand forthe organisation and most importantly provide a happy nurturing ecosystem for theemployees. An ecosystem that is not only empowering but also builds capabilities to helpthem to meet the challenges of a fast changing dynamic world environment. The companybelieves that a motivated employee with a passion for innovation in a given environment oflearning & growth would engage and succeed in all initiatives.

What began as ‘Project SmileRs in August 2017 really spread itspositivity with a winning culture across the Company bringing laurels earning accoladesand creating an environment of happiness. Smiles travelled across miles across locationsas team members applauded excellence expressed their appreciation and registered theirsatisfaction through a number of ‘smileys'. The ‘My SMILE App'tracked the smiles culminating in the SMILE Awards for members

who had earned the largest number of ‘SmilesRs within a span of 18months have crossed 1 million SMILES across the organisation.

The number of permanent employees on the rolls of the Company as onMarch 312020 was 2251. Industrial relations remained cordial at all the Company'sunits during the year under review.

AWARDS & ACCOLADES

During the year the Company received the following Awards:

a) The South Indian Sugarcane & Sugar TechnologistsRs Association(SISSTA) have chosen Nellikuppam distillery as the Best Distillery for 2018-19 in TamilNadu region. The Plant received Platinum Award from SISSTA at a function held on28.6.2019.

b) SISSTA have chosen the Sivaganga distillery as the Best Distilleryfor 2018-19 in Tamil Nadu region. The Plant received Golden Award from SISSTA at afunction held on 28.6.2019.

c) Sankili unit received “Silver award” from SISSTA forbeing Best Distillery for 2018-19 in AP & Telangana Region.

d) In the 35th Kaizen Competition conducted by CII Institute ofQuality Nellikuppam plant presented the following kaizens under the category ofBreakthrough: Process breakthrough through change of technology:

a. Biofuel from impure alcohol

b. Zero effluent discharge

e) For its kaizen on ‘Bio-fuel from impure alcohol'Nellikuppam Plant won the First Prize.

f) Ramdurg unit received the National Safety Award from the RegionalLabour Institute Government of India Ministry of Labour & Employment for theperformance year 2017 at a function held on 17th September 2019.

g) In the 20th National Award Contest for Excellence in EnergyManagement held by CII Nellikuppam unit was declared as “Excellent Energy EfficientUnit”. The award was given for the plant's works in the following areas:

I. Cooling tower pumps reduction

II. Sulphur station waste heat recovery

III. Increase in no. of nozzles in roller to reduce bagasse moisture.

h) During September 2019 Nellikuppam Plant received 6 awards from theGovernment of Tamilnadu on safety as given below:

Award year Ranking Award received for
1st Prize Highest reduction in accident rate during the award year when compared with the previous year.
2014 2nd prize Lowest Weighted Frequency Rate during the award year when compared with other industries coming under the same classification and same group.
3rd Prize The Longest Accident Free Period in Man - hours during the award year.
2015 1st prize Highest reduction in accident rate during the award year when compared with the previous year.
1st prize Lowest Weighted Frequency Rate during the award year when compared with other industries coming under the same classification and same group.
2016 2nd prize Highest reduction in accident rate during the award year when compared with the previous year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year there was no change in the composition of Board.

As per the provisions of Section 152 of the Companies Act 2013 readwith the Articles of Association of the Company Mr. M. M. Venkatachalam Director retiresby rotation at this Annual General Meeting and being eligible offers himself forreappointment and the requisite details in this connection is contained in the noticeconvening the meeting and in the Corporate Governance Report.

The Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed undersection 149(6) of the Companies Act 2013 and also comply with Regulations 16 & 25 ofthe SEBI (LODR) Regulations.

Mr. S. Suresh Managing Director Mr. S. Rameshkumar Chief FinancialOfficer and Mr. Biswa Mohan Rath Company Secretary are the Key Managerial Personnel ofthe Company as per Section 203 of the Companies Act 2013.

Number of Meetings of the Board

Five Meetings of the Board of Directors were held during the year thedetails of which are given in the Corporate Governance Report.

Board Evaluation

In accordance with the Companies Act 2013 and SEBI (LODR) Regulationsthe Board has carried out an evaluation of its own performance the performance ofCommittees of the Board and also

the directors individually. The manner in which the evaluation wascarried out and the process adopted has been given in the Corporate Governance Report.

Policy on DirectorsRs Appointment and Remuneration and Other Details

The Board has on the recommendation of the NRC framed a policy forselection and appointment of Directors Senior Management and fixing their remunerationand also framed the criteria for determining qualifications positive attributes andindependence of directors. The Remuneration Policy and criteria for Board nominations areavailable on the Company's website at http://www.eidparry.com/investors/Policies-Codes.

DIRECTORSRs RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) of the Companies Act 2013 your Directorsto the best of their knowledge belief and according to information and explanationsobtained from the management confirm that:

• In the preparation of the annual accounts for the financial yearended March 31 2020 the applicable accounting standards have been followed and there areno material departures from the same;

• they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 312020 andof the profit of the Company for the year ended on that date;

• they have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

• they have prepared the annual accounts on a going concern basis;

• they have laid down proper internal financial controls to befollowed by the Company and such controls are adequate and operating effectively and

• they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

AUDITORS AND AUDITORSRs REPORT

Statutory Auditors M/s. Price Waterhouse Chartered Accountants LLP(FRNo.012754N/N500016) Chennai were appointed as Statutory Auditors of the Company by theshareholders at the 42nd Annual General Meeting held on August 4 2017 to hold office upto the conclusion of the 47th Annual General Meeting.

There are no qualifications reservations or adverse remarks ordisclaimers made by the Statutory Auditors in their report for the year 2019-20. TheAuditors have included an emphasis of matter para relating to COVID-19 in their auditorreport which has been duly explained in notes to the financial statements.

Cost Auditors

As per the requirement of the Central Government and pursuant toSection 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit)Rules 2014 as amended from time to time your Company's cost records are subject toCost Audit.

The Board of Directors on the recommendation of the Audit Committeehave appointed M/s. Narasimha Murthy & Co Cost Accountants as the Cost Auditors toaudit the cost accounting records maintained by the Company for the financial year 2020-21on a remuneration of Rs 850000/- plus applicable tax and reimbursement of out of pocketexpenses. A resolution seeking membersRs ratification for the remuneration payable to theCost Auditor forms part of the notice convening the Annual General Meeting.

The cost audit report for the financial year 2018-19 was filed with theMinistry of Corporate Affairs on September 6 2019. The cost audit report for thefinancial year 2019-20 would be filed with the Ministry of Corporate Affairs on or beforeSeptember 30 2020 as per the provisions of the Companies Act 2013.

Secretarial Auditors

The Board appointed M/s. R Sridharan & Associates PracticingCompany Secretaries Chennai as the Secretarial Auditors to undertake the SecretarialAudit of the Company for the year 2019-20. The Report of the Secretarial Auditors isprovided in Annexure-B to this Report.

There are no qualifications reservations or adverse remarks ordisclaimers made by the Secretarial Auditors in their respective reports.

The Secretarial Auditors have not reported any incident of fraud duringthe year under review to the Audit Committee of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company's CSR initiatives primarily focus on improving thequality of life of the communities where it operates through socio welfare initiatives.The various CSR initiatives undertaken by the Company during the last financial yearinclude the following:

• Healthcare

The Company pursues a well-managed Health Care programme across itsunits providing medical amenities for people living in neighbouring villages.‘Hospital on Wheels' a well-equipped mobile unit with diagnostic and medicalintervention amenities makes emergency care possible for people living in remote areas. Inaddition mobile medical units cater to the needs of the elderly in the cane growingvillages around the Units.

In addition to the comprehensive health and medical care programs foremployees across the different Units medical camps were conducted offering health check-ups and free medicines for cane growers harvesting and transport labourers.

• Education

As an important part of its CSR program the Company promotes educationin the neighbouring villages near its units. Besides contributing to infrastructurebuilding and facility upgradation at schools the Company provides educational assistanceto cane growers children and participates in their developmental needs. Baby care centresmid-day meals for Balawadi school children of labourers training programme foremployeesRs children are few of the ongoing initiatives.

• Community Welfare

The Company has always played a key role in extending relief support tovillagers during natural calamities and helping the Government in its disaster managementinitiatives. Drought relief measures were extended to farmers in TN KN and AP tomitigate crop loss. Community development works were also undertaken in the villages inand around the units. As part of its community welfare programs the Company undertook thedesilting of ponds and canals to augment the water supply to villages and schools. Treeplanting across schools and neighbourhoods were conducted as part of the green environmentinitiatives.

The Company has constituted a CSR Committee in accordance with Section135 of the Companies Act 2013. The CSR Committee has formulated and recommended to theBoard a CSR Policy indicating the activities to be undertaken by the Company which hasbeen approved by the Board. The CSR Policy can be accessed on the Company's websiteat www.eidparry. com.

As per the provisions of the Companies Act 2013 the Company was notrequired to spend any amount towards CSR activities for the year 2019-20. However theCompany has been actively involved in various CSR activities and an amount of Rs 88.81Lakh was spent during the year. The Annual Report on CSR activities is given in Annexure-Cto this Report.

RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered into by the Companyduring the financial year with the related parties were on arm's length basis andwere in the ordinary course of business. There were no materially significant relatedparty transactions with Promoters Directors Key Managerial Personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committeefor approval. Prior omnibus approval of the Audit Committee is obtained on a quarterlybasis for the transactions which are of foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted are placed before the AuditCommittee for their review on a quarterly basis. The policy on Related Party Transactionsas approved by the Board is available at the web link: www.eidparry.com/policies-codes/.

EMPLOYEE STOCK OPTION SCHEME

The Company has introduced Employee Stock Options Scheme 2016 duringthe year 2016-17 as approved by the shareholders. The details of the Options granted uptoMarch 31 2020 and other disclosures as required under the SEBI (Share Based EmployeeBenefits) Regulations 2014 is available on the Company's website atwww.eidparry.com.

CORPORATE GOVERNANCE

The report on corporate governance along with certificate from apracticing Company Secretary as required under the SEBI (LODR) Regulations is annexed tothis Report. The report also contains the details required to be provided on the boardevaluation remuneration policy implementation of risk management policy whistle-blowerpolicy / vigil mechanism etc.

The Managing Director and the Chief Financial Officer have submitted acertificate to the Board regarding the financial statements and other matters as requiredunder Regulation 17(8) read with Schedule II of Part B of the SEBI (LODR) Regulations.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act 2013 readwith the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 (“IEPFRules”) all dividends which remains unpaid or unclaimed for a period of seven yearsare required to be transferred by the Company to the IEPF established by the CentralGovernment. Further according to the IEPF Rules the shares in respect of which dividendhas not been encashed by the shareholders for seven consecutive years or more are alsorequired to be transferred to the demat account created by the IEPF Authority.Accordingly the Company has transferred the unclaimed and unpaid dividends as well as thecorresponding shares as per the requirements of the IEPF Rules details of which areprovided on our website at http://www.eidparry.com/Unpaid- Unclaimed-Dividend.

During the year the Company has transferred an amount of Rs7521674/- being the unclaimed dividend for the year 2011-12 and Rs 12784608/- beingthe unclaimed dividend for the year 2012-13 to the IEPF established by the CentralGovernment. The Company has

also transferred 466186 Equity Shares in respect of which dividendhas not been paid or claimed for seven consecutive years or more as enunciated underSection 124 (6) of the Companies Act 2013. Out of 466186 Equity Shares 320983 EquityShares of Re.1/- each were transferred to IEPF on April 24 2020.

DISCLOSURES Audit Committee

The Audit Committee comprises of Mr. V Manickam Independent Directoras the Chairman Dr. (Ms) Rca Godbole Independent Director Mr.M.M.Venkatachalam Non-Executive Non- Independent Director and Mr. Ajay B. Baliga Independent Director asMembers.

CSR Committee

The CSR Committee comprises of Mr. V. Manickam Independent Directoras the Chairman and Mr. V. Ravichandran Non-Executive Non-Independent Director and Mr. S.Suresh Managing Director as Members.

Vigil Mechanism & Whistle Blower Policy

The Company has a Vigil Mechanism for directors and employees to reportgenuine concerns and grievances and provides necessary safeguards against victimisation ofemployees and directors.

The Audit Committee reviews on a quarterly basis the functioning of theWhistle Blower and vigil mechanism. The Vigil Mechanism and Whistle Blower Policy havebeen posted on the Company's website at www.eidparry.com and the details of the sameare given in the Corporate Governance Report.

Business Responsibility Report (BRR)

The SEBI (LODR) Regulations mandate the inclusion of the BRR as part ofthe Annual Report for top 1000 listed entities based on market capitalisation. Incompliance with the SEBI (LODR) Regulations the BRR forms part of this Annual Report.

Dividend Distribution Policy

Pursuant to Regulation 43A of SEBI (LODR) Regulations the top 500listed Companies are required to formulate a Dividend Distribution Policy. The Company'sDividend Distribution Policy as approved by the Board is available on the Company'swebsite at www.eidparry.com/investors/Policies-Codes.

Prevention of Sexual Harassment at Workplace Policy

The Company has in place a policy on prevention of sexual harassment inline with the requirements of the Sexual Harassment of women at the Workplace (PreventionProhibition and Redressal) Act 2013.

An Internal Complaints Committee (ICC) is in place to redresscomplaints received regarding sexual harassment. All employees are covered under thispolicy. No complaints were received and disposed of during the year under review.

Conservation of energy technology absorption foreign exchangeearnings and outgo

The particulars relating to conservation of energy technologyabsorption research and development foreign exchange earnings and outgo as required tobe disclosed under Section 134 (3)(m) of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 is given in Annexure - D to this Report.

Loans Guarantees and Investments

During the financial year the Company has given guarantees and madeinvestments in subsidiaries/Joint venture within the limits as prescribed under Sections185 and 186 of the Companies Act 2013. Details of Guarantees and investments are given inAnnexure - E to this Report.

Particulars of Employees and Related Disclosures

In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names of the top ten employees in terms ofremuneration drawn and names and other particulars of the employees drawing remunerationin excess of the limits set out in the said rules forms part of this Report. Having regardto the provisions of the second proviso to Section 136(1) of the Act the Annual Reportexcluding the aforesaid information is being sent to the members of the Company. Anymember interested in obtaining such information may write to the Company to email id -investorservices@parrymurugappa.com.

The disclosure with regard to remuneration as required under Section197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is attached and forms part of this Report as Annexure- F.

Extract of Annual Return

The extract of the Annual Return of the Company in Form MGT-9 is givenin Annexure - G to this Report.

Compliance of Secretarial Standard

The Company has complied with the Secretarial Standards issued by TheInstitute of Company Secretaries of India and approved by the Central Government asrequired under Section 118(10) of the Companies Act 2013.

GENERAL

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:

1. Details relating to deposits covered under Chapter V of theCompanies Act 2013.

2. Issue of equity shares with differential rights as to dividendvoting or otherwise.

3. Issue of shares (including ESOP and sweat equity shares) toemployees of the Company under any scheme.

The Managing Director of the Company does not receive any remunerationor commission from any of the Company's subsidiaries.

No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operationsin future.

ACKNOWLEDGEMENT

The Board places on record its appreciation for the cooperation andsupport received from investors customers farmers suppliers employees governmentauthorities banks and other business associates.

On behalf of the Board
Place : Chennai V. Ravichandran
Date : June 112020 Chairman

.