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EID Parry (India) Ltd.

BSE: 500125 Sector: Agri and agri inputs
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VOLUME 49680
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P/E 34.05
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Sell Qty 0.00
OPEN 584.00
CLOSE 581.50
VOLUME 49680
52-Week high 591.20
52-Week low 377.10
P/E 34.05
Mkt Cap.(Rs cr) 10,287
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 Seventh AnnualReport together with the audited financial statements for the year ended March 31 2022.

Rs. in Crore




2021-22 2020-21 2021-22 2020-21
Revenue from Operations 2496.30 2024.25 23527.93 18555.92
Gross Revenue 2772.22 2409.65 23743.78 18630.60
Profit Before Interest and Depreciation (EBITDA) (Earnings before Interest Tax Depreciation and Amortisation) 491.82 555.93 2628.74 2218.71
Exceptional Gains/(Losses) (13.73) 715.17 (13.73) (112.08)
Depreciation 120.11 119.99 333.99 331.70
Earnings Before Interest and Tax (EBIT) 357.98 1151.11 2281.02 1774.93
Finance Charges 46.09 92.72 151.91 235.61
Net Profit Before Tax 311.89 1058.39 2129.11 1539.32
Tax Expenses 28.39 193.53 555.41 539.50
Net Profit After Tax Before Minority Interest 283.50 864.86 1573.70 999.82
Non - Controlling Interests NA NA 666.87 552.45
Net Profit After Tax and Minority Interest 283.50 864.86 906.83 447.37


The Company has not transferred any amount to the reserves for the yearended March 31 2022.


The paid-up Equity Share Capital of the Company as on March 31 2022was ' 177386525 consisting of 177386525 equity shares of ' 1/- each.

During the year the Company has allotted 284134 equity shares of '1/- each under the Employee Stock Option Plan 2016.


Consolidated Revenue from operations for the year was ' 23528 Croreas against ' 18556 Crore in the previous year. Overall expenses for the year was ' 21615Crore (including exceptional items) as against ' 17093 Crore in the previous year.Operating Profit (EBITDA including exceptional items) was ' 2615 Crore as against ' 2107Crore in the previous year. Profit after Tax and minority interest for the year was ' 907Crore as against ' 447 Crore in the previous year.


Standalone Revenue from operations of your Company for the year was '2496 Crore as against ' 2024 Crore in the previous year. Operating Profit (EBITDA)(including exceptional items) was ' 478 Crore as against ' 1271 Crore in the previousyear. Profit after Tax for the year was at ' 284 Crore as against ' 865 Crore in theprevious year.

FY 2020-21 was a volatile and challenging year followed by theaftermath of Covid-19 which had changed almost every aspect of human life in ways neverimagined. While the economic and humanitarian toll of the pandemic was unparalleledoperational challenges mounted due to restricted movement and disrupted supply lines. Whenthe country navigated through the crisis the Government and the Reserve Bank of Indiatook effective measures to support a speedy economic recovery. The Union Budget 2021focused on regaining the growth momentum in the economy through several measures. Thepandemic-led change in ways of working has led to increased online transactions and highreliance on Information Technology for conduct of business operations. There have alsobeen significant shifts in demand across product categories on account of changingconsumer behaviours. The heightened concerns on health and safety has reflected inconsumer demand trends in the space of protection and hygiene with a surge intechnology-driven commerce.

While the pandemic has not impacted our business it has the potentialrisk of re-emergence leading to uncertainties for the future. To navigate this challengingbusiness landscape we need to continue to develop and deliver consumer-relevantinnovations and enhance our capability to face business disruptions. At EID Parry wecontinued to strengthen our core areas by leveraging on our brand leadership and buildinga portfolio of innovative consumer-driven segment specific products participating inthe value pyramid.

Our Performance in FY 2021-22

We decided the best way to manage our business was to leverage on thestrength built over the years by focusing on a competitive and profitable growthtrajectory and the resilience lent by a strong cash book. We have performed creditablywell against these objectives with the sugar division reporting standalone profitabilityfor the second year in succession. The performance of the sugar division surged withstrong volume of sugarcane crushed aided by higher recovery higher export realizationenhanced process efficiencies cost optimization and go-to-market strategies. We expectthe momentum to continue with the strategic positioning of our sugar assets enlargementof our cane command area heightened cane procurement activity and expansion into moreprofitable areas in adjacencies. Both bagasse and molasses the two by-products of sugaroffer unlimited potential for growth with technological innovation and opportunities forapplication in a variety of fields. EID Parry has embarked upon a number of collaborativeprograms and technical tie-ups with leading scientific institutions and establishments toexplore the potential opportunities in these adjacencies.

Our reported turnover growth stood at 23% EBITDA margin at 19%remained healthy while our Profit after Tax of '284 Crore and our cashflow fromoperations (after taxes) was '439 Crore. Your Directors were pleased to declare a firstInterim Dividend of '5.50 per equity share and second Interim Dividend of '5.50 per shareon a face value of '1/- for the year ended March 31 2022. The total Dividend for thefinancial year ended March 31 2022 amounts to '11/- per share of face value of '1/- eachthe highest ever dividend declared by the Company.

The performance during the year has been remarkable in comparison tothe previous year. This was made possible despite the inherent challenges and risks of thesugar industry straddled with a host of regulatory mechanisms both for the input andoutput and governed by pricing and release control systems. The sugar business postedrobust growth driven by crushing of strong sugarcane volume which led to an improvedperformance in sugar power and distillery. Enhancing process efficiencies reducinginterest cost prudent working capital management and higher sales volumes in sugar bothtrade and retail and higher realization in alcohol sales contributed to improved margins.A significant uptick in realization from sugar export and sale of power on the back of afirm international sugar price and higher power tariff coupled with a relentless focus onoperational competence and structural cost-saving interventions resulted in the much-improved performance. We demonstrated the resilience of our business and revealed newlevels of agility in responding to the fluctuations in demand and the complex challengesthat are inherent in the sugar industry. Our focus on execution excellence repurposingour brands and portfolio interventions enabled us to build our competitive strength.

Global trade dynamics volatile commodity cycles and climate concernscontinue to create challenges and uncertainties for companies and industries across thespectrum. New technologies are changing the landscape of the consumer goods marketbringing opportunities for products and consumers alike. Consumers are shopping throughmore diverse channels while digital-first brands are increasingly entering the market. Asthe consumer and channel landscapes rapidly evolve we continue to be agile and responsiveto leverage market opportunities and deftly navigate through the challenges. Riskmanagement is integral to your Company's strategy and to the achievement of its long-termgoals. Our success as an organization depends on our ability to identify and exploit theopportunities generated by our business and the markets we operate in. In doing this wetake an embedded approach to risk management which puts risk and opportunity assessment atthe core of our agenda.

During the last few years the Company has been able to offer aresilient portfolio of products which straddles across the pricing pyramid. Our flexiblebusiness model allows us to adapt our portfolio and respond quickly to develop newofferings that suit consumers and their changing needs both in the food and nutritionspace. We believe that many years of exposure to the industry and our long term valuedrelationship with our biggest stakeholders the farmers have given us the experience ofoperating and developing our business successfully even during periods of volatility andinstability both of the economy and the sugar industry.

Our success depends on the value and relevance of our products to ourconsumers and on our ability to innovate and remain competitive. Consumer tastespreferences and behaviours are changing more rapidly than ever before. We see a growingtrend for consumers preferring brands which address their functional needs and have anexplicit social purpose. During the year the Company launched a new product 'ParrysJaggery Powder' manufactured using the highest standards in hygiene and rich in fourvital minerals essential for the body i.e calcium magnesium potassium and iron.Extracted from high quality sugarcane the ready-to-use powdered jaggery ensures taste andnourishing sweetness and has immense market potential. In India there are very fewcorporates who have ventured into Jaggery manufacturing and provided to the customersproduced in factory and untouched by hand ideal for a wide variety of recipes. Thistraditional Indian Sweetener has many takers in the market with the right kind ofpositioning with consistent quality. 'Parrys Sweet Care' the Company's brand of Low GISugar continued to expand shelf space with continued validation by health-consciousconsumers. In line with its aspiration of establishing itself as a Bio energy Food andNutrition company EID Parry has ambitious plans to foray into the high potential food andsweetener space with a range of segment specific consumer-driven innovative products.

Our people are our key assets who deliver our strategy and enable us torealize our mission. In a rapidly evolving business environment we believe that theability to attract develop and retain a diverse range of skilled people is critical forthe growth of the Company. In line with this we are equipping our employees with theskills they need to adapt to a digitally accelerating and changing world of work andbusiness. Skill development capability building and culture embedding programmes are partof the strategic imperatives that we focused on to build an agile and empowered peopleforce.

Maintaining high standards of Corporate Governance has been fundamentalto the business of your Company. Our employees are aligned to the principles and valuesdefined in our Code and Policies. The Corporate Governance Policy guides the conduct ofaffairs of your Company and clearly delineates the roles responsibilities and authoritiesat each level of its governance structure and key functionaries involved in governance.Your Company is on a sustainability journey strengthening the mechanisms of engagementwith key stakeholders identification of material sustainability issues and progressivelymonitoring and mitigating the impact along the value chain of each business. Your Companywill update these systems and processes in line with the evolving disclosure standards andEnvironmental Social and Governance (ESG) requirements.


The International Monetary Fund (IMF) in its World Economic Outlook(WEO) report has slashed its forecast for India's FY'23 gross domestic product growth to8.2 percent from 9 percent saying that higher commodity prices will weigh on privateconsumption and investment. This was one of the steepest cuts for emerging economiescompared to the IMF's January WEO forecasts. Saying that global economic prospects haveworsened significantly due to commodity price volatility and disruption of supply chainscaused by the war in Europe IMF cut its global growth outlook for calendar year 2022 to3.6 percent from 4.4 percent and said both Russia and Ukraine could experience large GDPcontractions. IMF cut the calendar year 2022 (or fiscal year 2022-23 in case of India andsome other nations) GDP forecast for almost all developed and emerging economies. It isalso expected India's FY'23 current account deficit to be 3.1 percent compared with 1.5percent expected for FY'22. There was also a cut in India's FY'24 GDP growth forecast to6.9 percent from 7.1 percent estimated in IMF's January report. The IMF's projection ofIndia's retail inflation is at 6.1 percent higher than the Reserve Bank of India's(RBI's) forecast of 5.7 percent.

As per RBI the global economic and financial environment has worsenedwith the escalation of the geo-political conflict and accompanying sanctions. Commodityprices have shown a substantial rise across the board amidst heightened volatility withadverse fallouts on net commodity importers. Financial markets have exhibited increasedvolatility. Crude oil prices jumped to 14 year high in early March; despite somecorrection they remain volatile at elevated levels. Supply chain pressures which wereset to ease are rising again. The broad- based jump in global commodity prices hasexacerbated inflationary pressures across Advanced Economies (AEs) and Emerging MarketEconomies (EMEs) alike causing a sharp revision in their inflation projections. Theglobal composite Purchasing Managers' Index (PMI) eased to 52.7 in March from 53.5 inFebruary with output growth slowing in both manufacturing and services sectors whileworld merchandise trade momentum has weakened substantially.

Several central banks especially systemic ones continue to be on thepath of normalization and tightening of monetary policy stances. Resultantly sovereignbond yields in major AEs have been hardening. Overall the global economy faces majorheadwinds from several fronts including continuing uncertainty about the pandemic'strajectory.

Domestic Economy

The Second Advance Estimates (SAE) for FY 2021-22 released by theNational Statistical Office (NSO) on February 28 2022 placed India's real gross domesticproduct (GDP) growth at 8.9 percent 1.8 percent above the pre-pandemic (FY 2019- 20)level. On the supply side real Gross Value Added (GVA) rose by 8.3 percent in FY 2021-22with its major components including services exceeding pre-pandemic levels. GDP growthin Q3:FY 2021-22 decelerated to 5.4 percent. In Q4: FY 2021-22 available high frequencyindicators exhibit signs of recovery with the fast ebbing of the third wave but thepicture is however mixed.

Looking ahead the inflation trajectory will depend critically upon theevolving geopolitical situation and its impact on global commodity prices and logistics.On food prices domestic prices of cereals have registered increases in sympathy withinternational prices though record food grains production and buffer stock levels shouldprevent a major flare-up in domestic prices. Elevated global price pressures in key fooditems such as edible oils and in animal and poultry feed due to global supply shortagesimpart high uncertainty to the food price outlook warranting continuous monitoring. Inthis scenario pro-active supply management is critical to contain inflation.International crude oil prices remain volatile and elevated with considerableuncertainties surrounding global supplies. With the broad-based surge in prices of keyindustrial inputs and global supply chain disruptions input cost-push pressures appearlikely to persist for longer than expected.

Going forward good prospects of rabi output augur well for ruraldemand. With the ebbing of the third wave and expanding vaccination coverage the pick-upin contactintensive services and urban demand is expected to be sustained. Thegovernment's thrust on capital expenditure coupled with initiatives such as the productionlinked incentive (PLI) scheme should bolster private investment activity amidst improvingcapacity utilisation deleveraged corporate balance sheets higher offtake of bank creditand congenial financial conditions. At the same time the escalation of the geopoliticalsituation and the accompanying surge in international crude oil and other commodityprices tightening of global financial conditions persistence of supply-side disruptionsand significantly weaker external demand pose downside risks to the outlook. The futurecourse of the pandemic and the uncertainties about the pace of monetary policynormalization in major advanced economies also weigh on the outlook. Taking all thesefactors into consideration the real GDP growth for FY 2022-23 is now projected at 7.2percent.

Global Sugar

Record Indian production overshadowed the lower output in othercountries bringing FY 2021-22 supply and demand to a surplus of 1.26 MMT. According toCzarnikow global per capita sugar consumption was hit during the pandemic year to as farback as 2009 levels. Therefore it is poised to recover and grow more than 1.5% per annum.Ongoing hostilities in Ukraine will negatively impact sugar consumption in Ukraine andRussia.

According to Czarnikow China's sugar production may not reach 10 MMTin current year for the first time since FY 2016-17 leading to increase in imports of rawsugar. Strong Indonesian demand and toll refiners' offtake (driven by higher whitepremium) will keep raw sugar trade buoyant in FY 2022-23. Raw sugar market remains wellsupplied due to robust exports from India. Refined sugar demand is expected to be robustkeeping trade flows balanced. India is expected to export significant volumes in SY 22-23on the back of record exports in SY21-22.

According to S&P Platts the surplus for FY 2022-23 is expected tobe 2.82 MMT on the back of India adding another 1 MMT of sugar more than compensating thecut in Brazil and in the northern hemisphere countries such as Ukraine Russia and the EUgiven lower acreage. Higher global energy prices are supportive for hydrous ethanol pricein Brazil leading to lower sugar-mix estimates for the Center-South. Higher level ofsugar diversion to ethanol is also expected in India. The recent rally in the energycomplex and the spike in grain prices also raises the question of to what extent sugarbeet producers could switch to better-paying crops in EU.

Indian Sugar Market

After Brazil India is the largest sugar producer globally and itleads in sugarcane production. The Food and Agriculture Organization of the United Nationsstates that 124 countries produce sugar. However if alternative sweeteners such askhandsari (sort of raw sugar) and gur (jaggery) are included in the fold India would bethe most significant overall sugar producer.

The sugar industry in India is the largest agro-based industry aftertextiles. It employs over 500000 farmers directly and acts as a livelihood for about 50million sugarcane cultivators supporting over 12% of the rural population directly orindirectly. Sugar industry is an agricultural industry that still provides the maximumamount of employment in India. The sugar industry in India also happens to be the secondbiggest agro-based economic activity - a fact that goes on to show how important it is tosustain the national economy. Sugar production is 'cyclical' and it is also highly'politically sensitive' because its demand is inelastic. Despite forming a relativelyinsignificant portion of a family's budget a small rise in price triggers inflation inall commodities. The sugar industry is divided into two sectors comprising the organizedand unorganized sectors. Sugar factories belong to the organized sector and those whichproduce traditional sweeteners fall into the unorganized sector. Gur and Khandsari are thetraditional forms of sweeteners.

In India the primary sugar-producing states include MaharashtraGujarat Uttar Pradesh Haryana Tamil Nadu Punjab Karnataka Bihar and Andhra Pradesh.Sugar production is practiced all across India however the peninsular region has been abetter performer than the North Indian states. Due to this there has been a gradual shiftfrom north to south for the sugar industry. One of the primary reasons is the betterconditions available for cultivation in the peninsular region. Maharashtra istraditionally the leader when it comes to sugar production in India. Before MaharashtraUttar Pradesh was the leader. There are several reasons why Maharashtra occupies thisplace in the pantheon of Indian states that produce sugar. The state has a longer crushingperiod than other states and its recovery rate is also significantly higher. The sugarindustry in India is also highly localized owing to problems in transporting sugarcane.

Sugar Exports and Imports

The farmers receive protection in the form of a Fair and RemunerativePrice which the mills pay them. Since the domestic production is costly the industrydemands subsidy to export the surplus raw and white sugar to compete internationally.During the last two sugar seasons the Government has provided large sums of money towardsincentives to millers to ship surplus sugar through transport subsidy.

Thanks to stable prices of sugar in the international market Indiathe world's second largest sugar producer after Brazil has exported 7 MMT of thesweetener in the ongoing 2021-22 marketing year and exports from the country may touch anew record of 10 MMT. The sugar being exported this year is without the governmentsubsidies.

The Indian Government has a rather strict policy when it comes to theimport of sugar. Thanks to the increased import duty refiners find it rather hardeconomically unfeasible to be precise to bring in sugar especially from countries suchas Brazil Pakistan and Thailand.

Sugar Production

As per a Report published by ISMA the Sugar mills across the countryhave produced 34.2 MMT of sugar between October 1 2021 and April 30 2022. This is about4.2 MMT higher than 30 MMT produced at the same time last year. Sugar production inMaharashtra the country's leading sugar producing state has increased to 13.20 MMT tillApril of the current marketing year compared to 10.56 MMT in the year-ago period.Production in Uttar Pradesh the country's second largest sugar producing state howeverdeclined to 9.89 MMT so far this marketing year from 10.56 LMT in the year-ago period.Sugar production in Karnataka the country's third largest sugar producing state hasincreased to 5.9 MMT till April of this year from 4.24 MMT in the year-ago period.

As per ISMA the all India sugar production in SS 2021-22 is expectedat 35 MMT after considering diversion of 3.4 MMT of sugar equivalent into ethanol. Thehigher sugar production is due to significantly higher yields per hectare as also highersugar recovery. The area under sugarcane has not seen any significant increase in the lastfew years. The higher yields and recoveries are due to better seed varieties and timelyapplication of fertilizers and water including good rainfall last year.

Considering an opening stock of about 8.2 MMT as on October 1 2021domestic consumption of 27.5 MMT sugar exports of over 10 MMT and the estimated sugarproduction of 36 MMT the closing stock as on September 30 2022 is expected to be ataround 6.7 MMT. The sugar sales by end of March 2022 was estimated at 13.6 MMT as against12.9 MMT in the corresponding period last year which is higher by 0.66 MMT.

Sugar Consumption

Consumption of sugar and related sweeteners in India have increased inthe last few years. One of the primary reasons for the increasing demand for sugar is thegrowing population of India and improving economic conditions. The major consumers of thesugar that is produced directly by mills are bakeries local sweets and candymanufacturers. Together with the soft drink manufacturers they comprise almost 60% of theclientele. The primary consumers of Khandsari are locally operating sweet establishmentswhile Gur is used in the rural areas in its standard form both as a sweetener and asfeed. Manufacturers of biscuits and food products pharmaceutical companies hotels andrestaurants also consume fair quantities of sugar.

The data provided by the ICAR - Sugarcane Breeding Institute shows thatthe total consumption of sugar in India was 21.13 lakh tonnes in 1960-61 which rose to254.50 lakh tonnes in 2017-18. As per the latest trends OECD-FAO's Agricultural Outlook2019-2029 expects increases in worldwide sugar consumption over the next 10 yearsexclusively from the developing countries. In Asia India followed by Indonesia Chinaand Pakistan will go through the most significant increases in sugar consumption.

The future of sugar industry though looks encouraging but there aresome persisting concerns which need urgent attention. The government has been alwaysproactive and supportive to the industry keeping in mind the size of the sugar industryand the number of livelihoods associated with it. Nevertheless the focus needs to beshifted towards arriving at a resolution of the problems with regard to Fair andRemunerative Price (FRP) Minimum Selling Price (MSP) and cane arrears. The Government hasbeen largely supportive when it comes to the sugar industry whether higher Fair andRemunerative Price (FRP) or increase of Minimum Selling Price (MSP) or promoting efficientways of fuel production to the likes of ethanol and other measures in the interest of theindustry. Under the Sugar Export Policy for evacuation of surplus stocks during last fewseasons the Government has provided lump sums to sugar mills to facilitate the export.

FRP for sugarcane has been revised for SS 2022 at '290 per quintal fora basic recovery rate of 10 percent providing a premium of '2.90/quintal for each 0.1percent increase in recovery over and above 10 percent and reduction in FRP by'2.90/quintal for every 0.1 percent corresponding decrease. The Government has taken careof the interests of the sugarcane farmers but the concerns of the sugar mills also need tobe addressed.

The industry has been demanding the Government to increase the MSP forsugar to possibly '35/kg from the current '31/kg. As per Niti Ayog MSP at '31/kg doesnot even cover the cost of manufacture given the FRP which is at a reasonably highfloor. One way of improving the liquidity situation of mills is to further raise theMinimum Selling Price of sugar to '33 /kg. It would also help sugar mills to cover thecost of production including interest maintenance costs etc. Keeping in view theemerging developments MSP for sugar needs to be reviewed after six months of thenotification.

Serious policy distortions in sugar sector are continuing to result inexcess sugar production over domestic demand and rendered domestic prices highlyuncompetitive for trade.

Therefore there is a need for complete restructuring of sugar industryin a phased manner. To prevent the problem of arrears for sugarcane farmers and to keepthe sugar industry in sound financial health sugarcane prices must be linked to sugarprice. The (Rangarajan) Revenue Sharing Formula (RSF) needs to be introduced with a PriceStabilization Fund (PSF) to protect farmers from receiving prices below the FRP.

The search for a better alternative to sugar also ends at sugarsector's safety net i.e. ethanol. If India is a structural surplus sugar producer itneeds to export regularly. High cane prices make Indian sugar manufacturers uncompetitiveand dependent on government subsidies for exports. With the probability of export subsidybeing phased out after 2023 (as per WTO) Indian mills will have to deal with a formidableproblem of diversion of surplus sugar into ethanol to improve liquidity and checks thefall in sugar price.

Government of India - Policies affecting sugar industry Sugar &Sugarcane:

1. Maximum Admissible Export Quota (MAEQ):

The Central Government on December 29 2020 issued a notification tofacilitate export of sugar during the sugar season 2020-21 along with financialassistance. The said assistance was reduced to '4000/MT from '6000/MT w.e.f May 20 2021to facilitate export of sugar for expenses on export of 60 LMT of sugar during SS 2020-21.In pursuance of the scheme notification dated December 29 2020 60 LMT of sugar wasallocated amongst sugar mills under Maximum Admissible Export Quantity (MAEQ) for exportof sugar during the sugar season 2020-21. By a Notification No.1 (6)/2020-SP-I datedSeptember 30 2021 the Central Government extended the timeline to export sugar as permill-wise Maximum Admissible Export Quantity (MAEQ) in sugar season 2020-21 (October-September) beyond September 30 2021 and was allowed to export the balance quantity oftheir export quota by November 30 2021.

2. Amendment of The Sugarcane (Control) Order 1966:

Vide notification dated May 31.2021 the Government amended certainprovisions of the Sugarcane (Control) Order 1966. As per the amendment the definition ofsugar factory includes any premises where ethanol is manufactured from sugarcane juice orsugar or sugar syrup or molasses including B-Heavy molasses. Similarly producer of sugarmeans a person carrying on the business of manufacturing sugar by vacuum pan process or athis own option manufacturing of ethanol from sugarcane juice or sugar or sugar syrup ormolasses including B-Heavy molasses.

3 FRP for SY 21-22:

The Cabinet Committee on Economic Affairs has approved FRP of sugarcanefor sugar season 2021-22 (October-September) at '290/quintal for a basic recovery of 10%providing for a premium of '2.90 / quintal for each 0.1% increase in recovery over andabove 10% & reduction in FRP by '2.90/quintal for every 0.1% decrease in recovery.Where recovery is below 9.50% farmers will get '275.50 / quintal in ensuing sugar season2021-22 in place of '270.75 /quintal in the previous sugar season 2020-21.

4. The Central Government vide notification dated December 27 2021directed that 20% of the sugar produced shall be packed in jute bags compulsorily. Thisnotification is valid till June 30 2022 from December 27 2021. The notification has beenissued u/s 3(1) of 'The Jute Packaging Materials (Compulsory Use in Packing Commodities)Act 1987' in the interest of production of raw jute and of persons engaged in theproduction thereof.

5. In October 2021 the Central Government included Potash derived fromMolasses (PDM) in Nutrient based Subsidy (NBS) scheme and also fixed subsidy at '1467/MT

6. The Expert Advisory Committee to the Ministry of Environment &Forest Climate Change has notified that manufacture of dry ice will not be insisted uponas a condition while granting Environment Clearance to distillery projects.

7. Department of Food & Public Distribution Ministry of ConsumerAffairs have issued a clarification that quantum of sugar sold by mills to Army PurchaseOrganization will not come under the ambit of release order mechanism.

8. Scheme for extending financial assistance to set up distilleries:

Central Government with a view to increase production of ethanol andits supply under Ethanol Blended with Petrol (EBP) Programme especially in the surplusseason and thereby to improve the liquidity position of the sugar mills enabling them toclear cane price arrears of the farmers notified the scheme namely "Scheme forextending financial assistance to sugar mills for enhancement and augmentation of ethanolproduction capacity". Thereafter schemes for extending financial assistance to sugarmills & molasses based standalone distilleries for enhancement and augmentation ofethanol production capacity were notified on March 8 2019 vide notifications No. S.O.1227(E) & S.O. 1228(E). Initially vide notifications No. S.O. 3135(E) & S.O.3136(E) dated September 15 2020 a window was opened for 30 days for invitingapplications under the scheme from molasses-based standalone distilleries and from sugarmills. Further the Central Government notified a modified scheme namely "Schemefor extending financial assistance to project proponents for enhancement of their ethanoldistillation capacity or to set up distilleries for producing 1st Generation (1G) ethanolfrom feed stocks such as cereals (rice wheat barley corn & sorghum) sugarcanesugar beet etc" vide notification No. S.O. 148(E) dated January 14 2021. Now videNotification 1(10)/2018-SP-I dated April 26 2022 the said timeline has been extended forfurther six months under the said modified scheme dated January 14 2021 for invitingapplications from those Project Proponents (PPs) who have acquired land for ethanolproject and obtained Environmental Clearance (EC) for enhancement of their existingethanol distillation capacity or to set up new distillery for producing 1st Generation(lG) ethanol.

9.. The Ministry of Environment Forest & Climate Change (MOEFCC)vide its Notification No. S.O. 2339 (E) dated June 16 2021 has further amended the EIANotification 2006. The effects of the amendments are:

a. Grain based distilleries have now been segregated by introducing anew entry in the Schedule as Sl. No. 5 (ga). Such grain-based distilleries in Category Bof the Schedule shall be appraised as Category B2 project subject to submission ofnotarized affidavit by the project proponent that ethanol produced from proposed projectshall be used completely for EBP Programme.

b. Expansion of sugar manufacturing units or distilleries forproduction of ethanol having prior Environment Clearance (EC) for existing unit to beused completely for Ethanol Blended Petrol (EBP) Programme only as per self-certificationin form of an affidavit by the Project Proponent shall be appraised as category 'B2'projects. (Note: A B2 project is one which does not require EIA).

c. Subsequently if it is found that the ethanol produced based on theEC granted as per this dispensation is not being used completely for EBP Programme or ifethanol is not being produced or if the said distillery is not fulfilling therequirements based on which the project has been appraised as category B2 project the ECshall stand cancelled.

10. Vide notification dated March 2 2021 Ministry of EnvironmentForest & Climate Change exempted the requirement of obtaining Environment Clearance(EC) for any increase in production capacity in existing or areas contiguous to theexisting area for which prior EC has been granted provided there was no increase inpollution load. The notification further said that the project proponent shall furnish a'no increase in pollution load' certificate from an environmental auditor or reputedinstitutions empaneled by CPCB or SPCB to avail the benefit of this notification. Videoffice memorandum dated August 23 2021 the Ministry had further clarified thatenvironmental auditors shall include all QCI-NABET (Quality Council of India - NationalAccredited Board for Education & Training) accredited EIA consultants & CSIRlaboratories specialized in their respective sectors.

11. Vide notification dated May 25 2021 the Central Governmentamended the 'Scheme for extending financial assistance to sugar mills for enhancement andaugmentation of ethanol production capacity'. As per the amendment the applicant shouldget the loan disbursed from the bank within three years from the date of 'in principleapproval of DFPD' (prior to the amendment this was 2.5 years)

12. By a Notification F.No. 4/1/2018-(BP&E) Part dated January 132022 the Department of Food & Public Distribution directed standalone distilleriesproposing to produce ethanol from sugarcane juice by crushing sugarcane in its premises isrequired to follow the provisions of Sugarcane (Control) Order 1966 including maintaininga distance of 15 kms from the neighboring existing sugar mills or the distance higher than15 kms fixed by the concerned State Governments. Such distilleries which are procuringsugarcane juice/ syrup from other sugar mills and sugar mills which are selling B-Heavymolasses or C-heavy molasses or cane juice / sugar syrup/ sugar are required to adhere tomodalities indicated in the guidelines issued by DFPD vide letter dated December 02 2021regarding diversion / sale of B-Heavy/ C-Heavy molasses or cane juice / sugar syrup/ sugarincluding sale of B-Heavy molasses.

It is also clarified that distilleries including standalonedistilleries can produce ethanol from sugarcane juice/ syrup purchased from sugar millsonly (i.e. mills which are producing sugar from vacuum pan process) for supplying to OMCsunder Ethanol Blending Petrol (EBP) programme. Distilleries / standalone distilleries arenot allowed to procure sugarcane juice/ syrup from any Khandsari unit to produce ethanolfor supplying to OMCs under EBP as Khandsari units are not covered under the Sugarcane(Control) Order 1966.

13. The Tamil Nadu Government vide its Circular dated January 3 2022communicated that the State Pollution Control Board shall give 'Consent to Establish' toall applicants who are intending to set up a new ethanol production unit within theexisting sugar mills/distillery units located within 1KM/5KM from the water bodies. Thisconsent will be issued with the condition that the unit shall achieve zero liquiddischarge with reject management system and other conditions imposed by the PollutionControl Board.

14. The Government of India Ministry of Environment Forest andClimate Change vide its Memorandum dated March 29 2022 has clarified that only thefollowing activities can be undertaken for securing the land prior to grant ofEnvironmental Clearance for any project to which the provisions of Environment ImpactAssessment (EIA) notification 2006 is applicable:

a. Fencing of the project site by compound walls

b. Construction of temporary sheds for site office storing materialand machinery

c. Provision of temporary electricity and water supply for site office.

The office Memorandum further states that the above dispensation wouldNOT entitle to claim fait accompli with regard to grant of EC.

15. Publication of revised standards by BIS:

The Bureau of Indian Standards [BIS] have published revised standardsfor Cane Molasses & Refined Sugar. Following are the key features of the newstandards:

Cane Molasses: BIS have notified 3 grades of cane molasses (Grade 1Grade 2 & Grade 3) based on Brix Sulphated Ash & TRS.

Refined Sugar: as per revised standards Refined sugar shall have a POLof 99.8 (minimum) colour in ICUMSA units of 60 (maximum).

16. Plastic Waste (Management and Handling) Rules 2016:

The Ministry of Environment Forest and Climate Change (Ministry) hadpublished vide Notification No. S.O 249 (E) dated 4th February 2011 the Plastic Waste(Management and Handling) Rules 2016 which provides a regulatory framework for themanagement of plastic waste generated in the country. Further the Ministry videNotification No. G.S.R 320(E) dated 18th March2016 in exercise of the powers conferredby sections 36 and 25 of the Environment (Protection) Act 1986 (29 of 1986) and insupersession of the Plastic Waste (Management and Handling) Rules 2011 introduced thePlastic Waste Management Rules 2016.(Rules"). The said Rules were further amendedvide G.S.R.320 (E) dated 27th March2018 G.S.R No 571 ( E ) dated August 12 2021 and GSR229E) dated January 18 2022.

The Central Government notified the 'Plastic Waste Management(Amendment) Rules 2022' by a Notification No G.S.R 133 ( E ) dated February 16 2022. TheRules states that Producers Importers and Brand Owners using plastic sheets or like orcovers made of plastic sheets or multilayered packaging for packaging or wrapping thecommodity shall fulfil Extended Producer Responsibility (EPR) on plastic packaging wasteas per regulations issued these Rules from time to time..

17. Food Safety & Standards Act 2006:

The Food Safety & Standards Authority of India (FSSAI) launchedFood Safety Compliance System (FoSCoS) wef June 01 2020 which is an upgraded new foodsafety compliance online platform replacing the earlier system FLRS. Further FSSAI hasextended the implementation to w.e.f November 1 2020. All Central Licenses are issuedonline pan India through the FoSCoS with minimum documentation. All the manufacturerstraders restaurants who are involved in food business must obtain a 14-digit registrationor a license number through FLRS which must be printed on food packages as well asdisplayed in a prominent place.

The timelines for mandatory compliance of provisions relating to FSS(Labelling & Display) Regulations 2020 and FSS (Food Products Standards and FoodAdditives) Amendment Regulations 2021 which were earlier from December 2021 and January2022 have now been extended up to June 30 2022 and shall be complied from July 1 2022.

18. Legal Metrology (Packaged Commodities) Rules 2011 :

The Central Government has amended the Legal Metrology (PackagedCommodities) Rules 2011 vide Notification No G.S.R. 779(E) dated November 2 2021 andNotification No G.S.R. 226(E) dated March 28 2022. They shall come into force on theOctober 1 2022.

The following are the highlights of the Amendments.

• Rule 5 and Schedule II which specified certain products to bepacked in certain net quantities has been omitted. In other words there is no restrictionwith regard to the net weight that can be packed for any product.

• Previously style of declaration of MRP was defined. This hasbeen omitted. Presently the requirement is to declare the price in Indian Rupees - Theprice to be prefixed by INR or rupee symbol.

• In addition to MRP unit sale price is to be declared. Unitprice is declared per gm or ml or unit depending on the net weight declaration. To beexpressed as 'xx per g ( if net weight is less than 1 kg) or per kg ( if the net weight ismore than 1 kg).

• Unit sale price declaration is not required when the net contentis 1 kg or 1 litre.

Sugar Industry - Adjacencies


Molasses is a viscous by-product obtained from raw sugar during themanufacturing process. Cane-based ethanol can be produced in three different ways -directly from cane juice and from B-heavy and C molasses. Both the end products (i.e.cane sugar and the molasses) could be used to produce ethanol. The difference lies in thequantity of ethanol produced. One tonne of cane can produce 10.8 litres of ethanol if itis produced from molasses. On the other hand the same cane can produce 84 litres ofethanol if used directly as an input. The Government of India (GOI) launched the EthanolBlending Programme (EBP) on a pilot basis which was subsequently extended to the notified21 States and 4 Union Territories to promote the use of alternative andenvironment-friendly fuels. The programme is a part of the long-term strategy to reduceIndia's dependency on crude imports and insulate the nation from global oil pricevolatility as well as give the domestic sugar sector a boost by diverting excess sugarstocks towards ethanol manufacture.

This high-value product has gained a reputation for being a cleanerfuel hence it is also called a biofuel. All countries including Brazil divert cane sugartowards ethanol production. In fact Brazil launched its first ethanol policy way back in1975. Indian gains however rely on Brazil's decision to opt for ethanol or sugar in aparticular season depending on which is more profitable. When Brazil increases ethanolproduction Indian exporters gain otherwise the surplus supply to the global market pullsdown sugar prices adversely affecting the Indian exporters and millers. Brazil hasattained this freedom because of the huge investment in ethanol equipment and storagefacilities made by the millers unlike India which still lags behind without suchfacilities. Brazil diverts 55% of its sugar cane to biofuel whereas there is nothingfixed in India.

India opted for a National Policy on Biofuels in 2018 which targets20% blending of ethanol in petrol by 2030. In order to boost country's ethanol productionthe Government has approved 362 projects with an investment of '18600 Crore for enhancingadditional ethanol production capacity of 400 Crore litres in the next two years. Thiswill take total ethanol production capacity to 755 Crore litres which will help thecountry achieve 20 percent ethanol blending with petrol by 2030. All these moves are aimedat diverting sugar to ethanol production. This industry can be expected to become moreprofitable in the near future as economies return to normalcy and demand for crude oilsurges.

Ethanol is an attractive option for three reasons. First its demandcuts across several industries. It is used as an additive in automotive gasoline asolvent in organic chemicals it is finding space in the chemical industry and is used asan intoxicating agent in beer wine and other alcoholic beverages. Now ethanol is mixedwith petrol as well.

Secondly it will relieve the Government from the compulsion ofsubsidizing exports. That amount can be allotted to some other productive sector and thesugar industry can become less dependence on Government Support.

Thirdly this will save India from allegations at the WTO that itssubsidy program is trade distorting - a claim made by countries like Brazil Australiaand Guatemala in WTO regarding New Delhi's sugar subsidies in 2019.

With increase in blend levels and higher use of ethanol there is needto increase ethanol storage capacities at depots of OMCs across the country. The IndianRailway Network must build the necessary infrastructure and pipeline while OMCs need tomake relevant changes at retail pumps /stations for dispensing higher ethanol blendedpetrol as well as pure ethanol.


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 every 10 tonnes of sugarcane crushed a sugar factory produces nearly3 tonnes of wet bagasse. Since bagasse is a by-product of the sugar cane the quantity ofbagasse production in the country is in proportion to the quantity of sugarcane produced.

The power produced through cogeneration 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 skyrocketing and there is a shortage co-generation appears to be apromising development. The thrust on distributed generation and increasing awareness forcutting greenhouse gas emissions increases the need for cogeneration.

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

India's recent electricity shortage has been at its worst driven by asurge in demand. As generators strive to meet requirements a fall in the national coalinventory forced the Government to withhold supply to other sectors and suspend fuelauctions by companies that do not have contracted supply. Many northern states sufferedlong hours of power outages when a crippling coal shortage caused the worst electricitydeficit in nearly five years. The deficit in March2022 was 574 million kilowatt-hours ameasure that multiplies power level by duration. That amounted to 0.5% of overall demandfor the period or half the deficit of 1% in October2021.

This surge in demand and shortage of coal leading to higher powertariff though a short-term phenomenon augured well for the sugar industry as theindustry was able to generate a higher revenue from cogeneration which was significantlyaffected due to the lower power tariff.



The success of the sugar business depend upon Cane availability andcane quality. During the year the sugarcane availability in Tamil Nadu (TN) units wasbetter as compared to the previous year. The thrust on the cane development activitiesinitiated by the Company including encouraging the farmers in various ways in all commandareas has helped to increase the area under sugarcane cultivation. In TN despite COVID-19lockdowns there was an improvement in cane crushed at 18.06 LMT as against 16.42 LMT inthe previous year. The average recovery recorded was at 9.42% as against 8.71% in theprevious year. The recovery was better due to the increasing percentage of High SugarVarieties (HSV) as well as supply of quality seeds through the clean seed programme. Inaddition the agro climatic condition of the year also favoured the increase in therecovery which would prove beneficial in the long-term to the farmers and the industry atlarge.

In Karnataka (KN)due to good rainfall there was an increase inplantation for the crushing season 2021-22. During the year the units in Karnatakareported highest ever crushing at 27.39 LMT as compared to 19.26 LMT in the previous year.The average recovery was at 11.52% as against 11.72% in the previous year. The early startof the sugarcane crushing operations and efficient supply-chain management helped us tomaintain our crushing volumes. The centralized H&T planning and execution for all the3 units of KN facilitated smooth inter- unit movement and reduced yard balance harvestingand transportation (H&T) advance vehicle waiting hours and ensured continuous canesupply all of which have resulted in improved cane operations and also recovery.

With respect to the Andhra Pradesh (AP) unit the cane crushed was 4.77LMT as compare to 4.00 LMT in the previous year. The average recovery was at 10.03% ascompared to 9.81% in the previous year. The recovery was better due to increasedpercentage of Raw Sugar production reduced process losses by consistent crush rate andalso due to HSV varieties as well as supply of quality seeds through clean seed program.Added to this the favourable agro climatic condition of the year facilitated the increasein recovery.

Over the years the Company has built a remarkable relationship withall the farmers in its command area and is attractively positioned to maximise farmervalue. The Company remunerate the farmers around a standard payment cycle strengtheningthe farmer's trust and income. The Company's prompt cane payment even before the statutorydeadline of 14 days has helped the Company to procure cane till end of the season acrossall Units and instilled confidence in the minds of the farmers. Several initiatives hasbeen taken by the Company including incentivizing farmers for cane planting supply ofclean seed providing clean seedlings and resources for drip and micro irrigation andfacilitating the various agronomy services through agencies and Agri service providers.The Company provides 'soil health cards' to farmers for improving soil health andfertility to help in increasing the yield per acre through right application offertilizers and other nutrients to the soil. To interact with the farmers throughout thelife cycle of cane crop Farmer Connect App has been effectively utilized and a largenumber of farmers have been registered by using the App. The new initiative of Call Centrefor Cane operations has been established to reach farmers of TN and AP and through thisapp the cane and extension teams are in constant touch with the farmers during the entirelife cycle of the crop and assist the farmers immediately as and when the need arises.

The Company's core objective has always been farmer prosperity. It isdeeply involved in cane development examining cane varieties and identifying the onesthat will result in maximum yield. Our deep-rooted relationships with farmers which wecontinued to actively nurture through strategic interventions and investments will be amajor factor in boosting our crushing volume and resultantly our production. Even thoughthe yields have decreased throughout the Country we managed to maintain higher recoveryand as we move forward we shall adopt a multi-pronged strategy to ramp up our canedevelopment and procurement initiatives.

Manufacturing Operation:

The Company's sugar units strictly adhere to best-in-classmanufacturing processes and quality benchmarks. The state- of-the-art six manufacturingunits equipped with best-inclass equipment and streamlined processes are locatedstrategically in the sugarcane-rich belt areas. The units are equipped with latesttechnological equipment and analytical labs to ensure the highest levels of productquality in a safe healthy and clean environment as the Company supplies sugar to majormultinational soft drink companies leading confectionery manufacturers and pharmaceuticalcompanies. The Company continues its journey towards achieving manufacturing excellence bya focused thrust on TPM deployment optimising process efficiencies and enhancingoperational safety environment and quality standards. An accelerated drive across thevalue chain to improve operational efficiencies reduce cost and eliminate wastage hasbeen adopted across functions and processes to raise the execution excellence metrics.

The company follows EHS ( Environment Health and Safety) standards andcomplies with Safety and Environment norms as prescribed by the enforcement agency. OurManufacturing facilities are eco-friendly and meet emission and discharge norms and waterand energy conservation efforts have been taken to continually improve performance. OurPlants have safety and environment management systems and periodic performance assessmentstake place to ensure sustenance.

Proactively some of our factories have obtained ISO 14001 Environmentsystem certification and are equipped with state of art pollution control measures such asan incineration facility to manage spent wash as stipulated by regulatory authorities.

The Company continued to pursue its strategies to optimiseefficiencies reduce cost eliminate wastage and achieve stretch targets for growth. Evenas we continue to focus actively on capacity and efficiency enhancement we aim to ramp-upthe diversification of our sugar portfolio. Some of the initiatives which were undertakenduring the year were as follows:


• For the first time in Nellikuppam production of ethanol fromB-Heavy Molasses started.

• The ethanol plant capacity was expanded to 65 KLPD from theexisting capacity of 45 KLPD

• Firewood boiler was commissioned Sankili

• CCTV cameras were installed at the Sugar-Bin and sugar qualitylab for monitoring purpose.

• 120 KLPD Grain Based Distillery project is under progressPugalur

• Steam saving project has been completed and the steam % cane forQ4 of FY 2021-22 was 38.31 as against the last year level of 44.21%.


• New molasses storage tank construction completed and permissionobtained from State Excise Department Bangalore for storage of B-Heavy molasses


• The Sugar and Cogeneration equipment of Pudukkottai Plant inTamil Nadu was shifted to Haliyal and the plant was commissioned enhancing the Haliyalcapacity to 12000 TCD & 49 MW Cogeneration.

5500 Cu.M of raw water was saved compared to 5500 in FY 2020-21.


• Commissioned the 60 KLPD distillery plant on June 30 2021

• Commissioned the Condensate polishing unit for disposal ofexcess water.

Sales and Marketing

The company is a market leader in packaged sugar segment in SouthIndia marketing its products under its iconic brand "Parrys". The consumersgoods land scape is changing rapidly with new technologies bringing opportunities forbrands and consumers alike. Consumers are shopping. through more varied channels andsmaller local brands as well as digital- first brands are increasingly entering themarket. In these times we continue to be agile and poised to enhanced brand propositionsand marketing investments to increase adoption in underpenetrated categories. The Companypoised to significantly scale up its retail business with a pervasive distribution networkincreasing the volume proportions sold in Institution and retail segments.

The Company continued its strong performance in the Retail andInstitution segment enabled with stringent quality systems global certifications highstandards of hygiene and process and the robust ability to customize products for thecustomers. The Company continues to hold the leadership share in many customer segmentsand today supplies to industries operating in various categories like beverages foodsconfectionery dairy bakery and pharmaceuticals. The Company's premium Brand Parryinstill confidence and trust among consumers and continues to drive volumes. Trademarksand brands are considered to have an indefinite life given the strength and durabilityfor which there is no foreseeable limit and the Company propose to fully seize thisopportunity. Going forward the Company propose to maximize growth by prioritizing thefocus areas and ramped up availability of products and brand presence across categoriesand population strata

The trend towards healthy eating was accentuated last few years as thepandemic enveloped the country. In response to this the Company focused on providinghealthy eating options through its Low GI Sugar "Sweet Care". With the power of7 herbal extracts Sweet Care is a clinically tested Low GI Sugar (Glycemic Index < 55)that supports a healthier diet. The Company has also signed a commercial partnershipagreement with food technology company Nutrition Innovation to create innovative sugarsolutions Nucane™ Low GI Sugar. This Low GI raw sugar utilises natural occurringpolyphenols in cane sugar that have been scientifically proven and independently testedto consistently lower the glycemic response of sucrose. The partnership with NutritionInnovation gives the Company unique access to Nucane Low GI Sugar technology to produce anew specification of naturally low glycemic raw sugar which both complement and extend ourexisting range of products and supports the growing global trend for less processed lessrefined brown sugars.

The Company has been conscientiously working on evolving severalapproaches to meet the changing aspirations of the consumers and customers which willultimately lead to increasing the volume proportions sold in Institution/retail segmentsresulting in de-risking of the cyclicality of the sugar business The Company's focus instrengthening its presence in the retail market in branded sugar is going to pay dividendin terms of benefit from higher and more stable pricing with healthy long-term prospectsand a more stable realization for its sugar.


In Quality Function "Continual improvement" was the focusduring this financial year. As part of this leading and lagging indicators across theproduction processes including the final products were defined by all manufacturingplants. These parameters were rigorously reviewed on a weekly basis by the SeniorManagement along with the Unit and Functional heads. As part of this initiative EQUICS -EID Quality Internal Controls - a new initiative to monitor and track the deviations wereinitiated. Additionally for the first time an online web based systematic approach forCustomer Satisfaction Survey was developed internally with the help of the IT Team. In itsWorld Quality Week celebrations the Company focused on the theme - "Sustainability:Improving Our Products People and Planet." The emphasis was on the importance ofquality in sustainability and its influence on the environmental social and governance(ESG) standards.

During the year the units at Nellikuppam Bagalkot and Sankili facedthe recertification audits and were accredited with FSSC 22000 version 5 from the DNVCertification Body. These units were also certified for ISO 9001:2018 Quality Managementsystem by the said certifying body. As in the past for the Nellikuppam and Haliyal UnitsKosher certifications SMETA 6.0 (Sedex Members Ethical Trade Audit) were recertified. TheCompany's refinery unit in Nellikuppam successfully continues to manufacture in compliancewith Government Excipient guidelines as prescribed for drug manufacturing customersincluding accreditations of Indian European United States Japanese and BritishPharmacopeia. During the year the Qualify function facilitated the launching of JaggeryPowder a new product in the retail market and continue to work with industries for theco-creation of value-added products using jaggery and also standardized parameters forThird Party Unit operations. In the Sankili unit Integrated Management SystemCertifications which includes Quality Management System ISO 9001:2015 EnvironmentalManagement System ISO 14001:2015 and OH&S ISO 45001:2018 were recertified.

Research & Development and Extension Services

Variety is the pivot around which the sugar industry is revolving. Toincrease the farmer's income through better cane yield and increase the sugar recoverythe company is continuously making efforts to identify the suitable varieties.State-of-the-art in-house breeding program at Haliyal unit and with the collaboration ofICAR (Indian Council of Agricultural Research) new sugarcane varieties are developed inR&D farms. To ensure farmers' profitability new varieties are tested in the farmer'sfields through MLT (Multi-Location Trails) and suitable location-specific varieties areidentified for further multiplication. To improve the cane yield clean seed cane wassupplied through the nucleus nursery programme in the captive farms. As part ofsustainable sugarcane cultivation pro-tray seedlings are produced on research farms anddistributed to the farmers to reduce water consumption during irrigation for better yield.Tissue culture-based seed cane supply has also ensured a disease-free crop a betteropportunity for the farmers to get higher yield and higher cane price through betterrecovery.

Due to continuous intensive farming soils deteriorate and hencesuitable fertilizers are recommended through the soil testing lab to apply balancednutrition to crops and to save the environment. Irrigation water samples are tested forsuitability for micro-irrigation systems installed in the farmers' fields.

Considering as major pests in Sugarcane crop borer pests are managedby the continuous release of biocontrol agents such as an egg parasitoid- (Trichogrammachilonis) pupal parasitoid- (Tetrastichus howardi) and adult trapping mechanism -Pheromone traps in the command area. These bio-control agents release supports to make apesticides-free environment in the past two decades. The minor pests of sugarcane aremanaged by spraying eco-friendly chemicals like Neemazal T/S to manage the incidence.First time the Fall Armyworm (FAW) (Spodoptera frugiperda) incidence was noticed in TamilNadu mills command area during November and the pest was controlled through appropriatemanagement measures.

In the current scenario water has become a valuable commodity and tosave the irrigation water for sugarcane cultivation the company has taken new initiativesin the irrigation system. After two years of intensive field trials with internationaltechnical collaborators autonomous irrigation systems are installed on a pilot-scalebasis in farmers' fields and recorded irrigation water saving up to 60% in sugarcanecultivation. The company also invested resources in a new method of gravimetric dripirrigation to save the water with cutting-edge technology. New irrigation methods weredemonstrated with low-cost investment particularly for high water scarcity areas.

Value Added Projects

• The Company is exploring opportunities to convert SugarDistillery & Nutra by-products (waste) into value added

Products suitable for Aquaculture poultry & Animal Husbandry

• The Company has developed nutrient rich eco-friendly soil-lessmedia from sugar cane bagasse both for the international and domestic market. In additionthe Company has produced a 'Green Grow' media by mechanical process by sustaining EC andPH suitable for growing all types of plants with the unique properties of conserving thesoil and water besides improving soil fertility and productivity. The nutrient content inthe Green Grow Media is far greater than coco pith which is the alternative soil-lessmedia available in the market. The Company has commenced export sales of the product.

• The Company has developed mineralised salt lick for smallruminants from the Nutraceutical process waste in collaboration with TANUVAS (Tamil NaduUniversity of Veterinary and Animal Sciences). Equipment designing and fabrication forcommercial production is under progress.

• The following projects are in progress:

• To develop Bioplastic ie. degradable mulching sheet and polybags from bagasse and to fortify green media to compete with cocopith in the market.

• The Company has signed a MOU with TANUVAS Madhavaram to developnutrient rich dry fodder block for cattle. Animal adaptation trial completed. Machinerydesigning for commercial production is under progress.

• The Company has started scientific field trials of organicpotash application in tea plantation with UPASI Coonoor. The trials are encouraging.

• 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 in collaboration with CSIR has undertaken a pilot study toestablish the extraction of potash from ash. The opportunity for potash fertilizer inIndia is plenty and if the pilot project is successful this will pave the way forcommercialisation of the Technology.

Sugar Division-Performance

Operational Performance

Particulars 2021-22 2020-21
Cane Crushed (LMT) 50.21 39.69
Recovery % 10.63 10.28
Sugar Produced (LMT) 4.83 3.92
Power Generated (27 Units) 4144 3766
Alcohol Produced (Lakh Litres) 844 633
Sugar sold (LMT) 4.86 4.00

Financial Performance



Cogen Distillery Total
2021-22 2020-21 2021-22 2020-21 2021-22 I 2020-21 2021-22 2020-21
Revenue 1840 1501 163 142 491 362 2494 2005
EBITDA** 151 135 15 11 68 51 234 197

** Earnings before interest tax depreciation and amortization

The sugar segment constituted the largest share of the Company'srevenues. The segment contributed 74% of the Company's turnover during FY 2021-22 similarto FY 2020-21. Revenues from the sugar segment during FY 2021-22 was at ' 1840 Crore asagainst ' 1501 Crore in FY 2020-21.

Segment- wise Performance & Operational Highlights


The Company has six sugar plants with a combined capacity of 40300 TCD.During the year the total cane crushed in Tamil Nadu plants increased to 18.06 LMT asagainst 16.42 LMT in the previous year. There was an increase in the overall grossrecovery in TN to 9.42% in 2021-22 from 8.71% in 2020-21. Crushing in the Company'sSankili plant at AP increased to 4.77 LMT as compared to 4.00 LMT with a gross recoveryof 10.03% as against 9.81% in the previous year.

The total cane crushed by the units in KN was at 27.39 LMT as against19.26 LMT in the previous year. The average gross recovery was at 11.52% as against 11.72%in the previous year.

The overall cane crushed by the Company was 50.21 LMT in 2020-21 asagainst 39.69 LMT in the previous year. The weighted average gross recovery of the Companyincreased to 10.63% from 10.28% in the previous year.

During the year 2021-22 the Company produced 4.83 LMT and sold 4.95LMT of sugar as against 3.92 LMT and 4.00 LMT respectively in the previous year.

Cogeneration - Power

The Company has an aggregate cogeneration capacity of 140 megawatts.The Company exports nearly 52% of the power generated. The cogeneration segment accountedfor 7% of the Company's revenues During the year the revenues from the segment stood at'163 Crore as against '142 Crore in 2020-21.

Tamil Nadu:

The units in TN generated 1652 Lakh units and exported 820 Lakh unitsof power during the year as against 1549 units and 795 Lakh units respectively in theprevious year.


The power generated and exported by the KN Plants stood at 2140 Lakhunits and 1169 Lakh units as against 1939 Lakh units and 1177 Lakh units respectively inthe previous year. The increase was mainly on account of higher cane crushing.

Andhra Pradesh:

The unit in Sankili generated 317 Lakh units and exported 114 Lakhunits as against 278 Lakh units and 98 Lakh units respectively during the last year.


At the beginning of FY '22 the Company had four distilleries locatedat Sankili Haliyal Nellikuppam and Sivgangai engaged in the production of industrialalcohol and ethanol with a cumulative capacity of 237 kilolitres per day. During the yearthe Company completed the erection & commissioning of a new 60 KLPD distillery atBagalkot increasing the alcohol production capacity to 297 KLPD. Almost the entiredistillery capacity of the Company is dedicated towards ethanol & ENA (Extra NeutralAlcohol). During the year EID Parry commenced activities for setting up of a 120 KLPDgreen field grain based distillery at Sankilli with a capital outlay of around ' 92.50Crore. The Plant is expected to be commissioned and fully operational during the lastquarter of the FY 2022-23.

The distillery segment contributed to 19% of the Company's revenues asagainst 18% in FY 2020-21. Revenues from the distillery segment during FY 2021-22 stood at' 491 Crore as against ' 362 Crore in FY 2020-21.

The Company's alcohol production saw an increase to 779 Lakh liters inFY 2021-22 as against 633 Lakh liters in FY 2020-21.

Expansion of the existing distillery capacities and setting up of newcapacities are part of the Company's strategy for enhancing the ethanol stream as arevenue earner subject to sustained availability of molasses.

Performance Analysis Opportunity & Threats

The Company is a large integrated sugar producer. It has the capacityto crush 40300 MT per day (TCD) of sugarcane cogeneration plant of 140 Mega Wattdistillery of 297 KLPD. For the FY 2021- 22 the Company posted higher operating marginsand revenue driven by an overall stable performance of its sugar distillery andco-generation segments on the back of record sugarcane crushing volume which soared tonew heights during the year under review. Additionally the higher recovery due to goodclimatic conditions coupled with efficiency improvement and relentless cost cuttinginitiatives and higher distillery capacity contributed to the improved performance.

There has been a significant improvement in the financial risk profileof the Company with consolidated debt reduction of ' 911 Crore during the last two yearswhich led to better than anticipated debt protection metrics. This was possible throughproceeds of ' 835 Crore received from sale of 4% stake in subsidiary CoromandelInternational Ltd (CIL) and better cash generated from operations. Overall debt reducedto ' 104 Crore as on March 31 2022 from ' 554 Crore as on March 31 2021 and from '1035 Crore as on March 31 2020. The capital spending of the Company has been moderateand largely will additionally support overall cash flows. Debt protection metrics areexpected to improve further going forward as no major debt funded capex is planned apartfrom routine maintenance capex and spend on new Distillery Unit at Sankili. Overall debtlevels are expected to be maintained at moderate level over the medium term. The Companyderives substantial financial flexibility from its subsidiary CIL. CIL has a healthydividend track record. The Company has received dividend of ' 199 Crore during the FY2021-22. This steady dividend flows support the Company's overall profits and helpspartly mitigate impact of volatility in its business.

While the input prices are driven by the government sugar prices arevolatile and based on open market prices (which are dependent on the production levels)leading to volatility in players' profitability. Besides the government regulatesdomestic demand-supply through restrictions on imports and exports and stock holdings.Regulatory mechanisms and dependence on monsoons have rendered the sugar industrycyclical. The Company's operating profitability will continue to improve due to costreduction initiatives shut down of loss making plants in Tamil Nadu and shifting ofcapacity to Karnataka increased thrust on ethanol operations and other value addedsegment and more importantly the integrated nature of operations.

There has been an increase in the overall domestic demand for sugar inFY '22. International prices also firmed up due to supply constraints as production inmajor countries were lower. Additionally demand for ethanol continues to be strong as oilmarketing companies increased offtake to meet the ethanol blending norms. Demand forpotable alcohol also recovered post pandemic related disruptions. All these factors haveresulted in improvement in the performance of large integrated domestic sugar companies inthe FY 2021-22 which is also expected to continue in the medium term.

Continuation of Minimum Selling Price (MSP) of ' 31 per kg is expectedto continue to benefit domestic players. Sugarcane plantation across the country isexpected to improve in SS 2021-22 due to normal monsoons which will result in higher caneavailability. However sugar inventory is not expected to increase correspondingly asincreased diversion of sugarcane to ethanol is likely to keep sugar inventory in check.While cane prices may increase to provide relief to farmers integrated players such asthe Company are less likely to face any major impact as distillery and co-generationplants will lend stability to margins. Government interventions however will continue toremain a driver for profitability of sugar mills and a key sensitivity factor.

The Company believes that better contribution from the distillerybusiness and better power tariff for Cogeneration fuelled by the coal price hike andhigher margin from value added segments will help offset modest contribution fromdomestic sugar operations resulting in improving cash generation. The improvement inbusiness performance resulting in healthy cash generation also aided by continuedimprovement in sugar operations including at PSRIPL and better contribution fromby-products and ethanol facilities sustaining debt at lower level which along withbetter cash generation will improve key credit metrics. However any decline in sugarprices or sizeable increase in cane prices may impact operating profitability and cashgeneration.

Large scale integrated operations with the power and distillerybusiness along with nutraceuticals provide moderate cushion from cyclicality in the sugarbusiness. After a decline in sugar crushing in Tamil Nadu in the past 3-4 years due toweak monsoons cane availability has improved in FY 2021-22 due to normal monsoons andincreased cane area allocation. This is also expected to benefit the sugar business in thecoming seasons. Issues with cane availability and volatile sugar prices had led tomoderation in Company's performance in the past years. The Company has consolidated itsmarket position in sugar business leveraging the strength derived from integrated natureof operations with diversified revenue profile financial flexibility and moderate thoughimproved financial risk profile. These strengths are partially offset by thesusceptibility of its business performance to downturn in the sugar business andregulatory changes in the sugar industry.

Company's Performance

The Company expects to register moderate growth during the FY 2022-23due to better realization from sugar alcohol and power. Retail and institutional segmentsare expected to register modest growth over last year. Institutional sales which accountfor 20-25% of the company's sugar volume which may show improvement with higher demandfrom end-user industries due to increase in sugar consumption across spectrum ofindustries. Besides revenues from distillery operations are also expected to be higherdue to additions of capacity and higher off-take for blending of ethanol with petrol byoil refining companies.

Sugar prices are firm both in the international and in the domesticmarkets. The higher sugar output in the country may not put the sugar price underpressure due to diversion to ethanol and export opportunities. Apart from higher sugar anddistillery revenues the closure of loss-making plants in Tamil Nadu cost reductionmeasures including rationalization of workforce 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 global supplement market is forecasted around $170 billion forFY'22 constituting of Functional Foods (30%) Functional Beverages (40%) and DietarySupplements (30%). Our Company operates in the Dietary supplement category under thesegment of Herbal and Traditional Medicines.

The US Nutraceutical market is estimated at $60 Billion and represents35% of the global consumption while China with a projected sale of $25 billion is thesecond largest supplement market accounting for nearly 15% of the global share. TheWestern EU market accounts for 12% of the total share with high growth potential drivenby an ageing demographic and consumer trends preferring supplements for healthy aging.

The pandemic has emphasized the importance of immunity in human healthleading to increased consumer interest in dietary supplements. This augurs well for thegrowth of the nutraceutical industry in the near future. In addition to boosting immunitythe major health concerns are joint or other pain management insomnia anxiety or stresslack of energy cardiovascular health obesity and digestive complaints. The growth indemand for supplements is mainly driven by probiotics Fatty Acids (i.e. fish oils) andprotein supplements. Herbal and botanical supplements have emerged as complementaryalternatives to modern medicine.

The global nutraceutical ingredients sector in the Dietary supplementswhere the Company is operating is estimated at $12 billion in 2021. In this while themicro algae segment accounts for 4% at $500 million the plant botanical saw palmettoextract where the Company has a strong presence accounts for another 1% of the market at$120 million. Both segments are expected to have a healthy growth rate of 8-10% for thecoming years.

Business Overview

Research driven high quality products with superior value propositionand efficient customer service has enabled the Company to retain its leadership positionin the premium spirulina segment with a healthy 20% growth consolidating its share in thekey North American and European markets. In the emerging chlorella space the Businessenhanced its manufacturing efficiencies to offer customers high nutrition- profileproducts with great potential for growth.

During the year the business has complied with all organic standardrequirements which includes NPOP (India) USDA NOP (US) and EU Organic (EU). Strictadherence to quality and safety processes has enabled the Company to meet the stringentaudit requirements of USP and BRCGS standards and also to be awarded Grade 'A' forcompliance to Food Safety System.

As part of supplier qualification process traceability and farm auditswere conducted by Amway (Nutrilite) and the Company has been qualified as a prestigious'Gold Standard' supplier. With stringent regulations and checks at destination portsspecifically in Europe active monitoring of ETO and pesticide residues were done withadditional measures such as third- party sampling and testing by accredited EU labs as perthe revised EU regulations. Significant improvements were made in the quality of chlorellapowder produced during this year with high chlorophyll content and compliance to EUquality norms.

The Company's wholly owned subsidiary US Nutraceuticals Inc. (Valensa)grew by more than 27% during FY 202122. Valensa improved its market position substantiallyin Saw Palmetto based products by increasing sales with key customers and strengtheningthe supply chain operations. The Company's Astaxanthin operations in Alimtec Chilecontinues to be profitable.

In the Micro - Algae space the Company expanded its presencesignificantly in the US market by enlarging its customer base while recording a sustainedgrowth trajectory in the EU markets. In addition the Company consolidated its globalleadership position in premium organic spirulina.


As a result of the COVID-19 pandemic dietary supplements particularlythose oriented towards immunity and overallwellness is expected to increase in marketdemand. There is a significant shift in attitude of consumers towards natural productswhich are backed with scientific evidence in improving nutrition and wellness. In additionto dietary supplements there is an increase in interest among large multinationals in theFoods and Beverage segment in incorporating natural ingredients in their productformulations. This augurs well for the Company in terms of the demand environment. Toleverage on this opportunity and to expand its customer roster the Company has renewedits focus on new product development incorporating microalgae as signature ingredients.Investments in new product development cutting edge technologies and sustainablemanufacturing practices are part of the Company's strategies to mine the immensepotential of the business.


Revenue (Rs. in Crore)

BUSINESS SEGMENTS 2021-22 2020-21
Sugar 1840 1501
Cogen 163 142
Distillery 491 362
Sugar Total 2494 2005
Nutraceuticals 64 72
Total 2558 2077

Note: Above includes inter-segmental revenue.


The Earnings before Interest Depreciation Tax and Amortization(excluding exceptional items) for the year was ' 492 Crore representing 18% of totalrevenue (excluding exceptional revenue) as against ' 556 Crore representing 23% of thetotal revenue in the previous year.


EBIT for the year was ' 372 Crore (excluding exceptional items) asagainst ' 436 Crore in the previous year 2020-21

Finance Charges

Finance Charges for the year 2021-22 was at ' 46 Crore as against ' 93Crore in the previous year 2020-21.


Depreciation for the year 2021-22 was at ' 120 Crore similar to theprevious year.


Profit Before Tax for the year was at ' 312 Crore (including netexceptional loss of ' 14 Crore) as against ' 1058 Crore (including net exceptional gainof ' 715 Crore) in the previous year 2020-21.


Profit After Tax for the year was at ' 284 Crore as against ' 865 Crorein the previous year 2020-21.


The Net worth as on March 31 2022 was ' 2760 Crore as against ' 2594Crore as on March 31 2021. Capital Redemption Reserve remained unchanged during the year.


The total borrowings of the Company decreased from ' 554 Crore in2020-21 to ' 104 Crore in 2021-22. The Long-Term Debt is 0.04 times of equity as against0.08 times of equity in the previous year. Working capital borrowing utilized was ' 4Crore as on March 31 2022 as against ' 355 Crore in previous year.

Fixed Assets

During the year the company incurred ' 252 Crore as additions to FixedAssets as against ' 31 Crore during the previous year.


The total investment of the Company as at March 31 2022 was ' 1119Crore as against ' 1010 Crore in FY 2020-21. The Company made an investment of ' 19 Croreduring the year in the Joint Venture entity Algavista Greentech Private Limited. Theincrease in the value of Investment by ' 90 Crore was on account of fair valuation.


During the year rating agency CRISIL has reaffirmed the Company's LongTerm rating as "CRISIL AA-/ Positive" for the long term borrowings andreaffirmed Short Term Rating as "CRISIL A1+" for the Short Term borrowings.

Book Value and Earnings per Share

Book Value of shares of the Company was ' 156 per share as on March 312022 as against ' 146 per share as on March 31 2021. Earnings per share was ' 16.00 pershare for the year ended March 31 2022 as against ' 48.86 per share for the year endedMarch 31 2021.


Particulars 2021-22 2020-21
Key Profitability Ratios
EBIDTA / Sales % (Operating Profit Margin) 19.44 71.28
PAT / Sales % 11.53 45.48
PAT / Average Equity % (ROE) 10.59 40.15
Key Capital Structure Ratios
Net Debt / Equity Ratio 0.04 0.21
Outside Liabilities / Networth 0.48 0.65
Net Fixed Assets / Networth 0.47 0.50
Debt Service Coverage Ratio 3.44 2.98
Interest Service Coverage Ratio 10.37 14.62
Liquidity Ratio
Current Ratio 1.30 1.13
Inventory Turnover (days) 193 252
Receivables (day gross sales) 25 33
Earnings and Dividend Ratios
Dividend % 1100 -
Earnings Per share (?) 16.00 48.86
Book Value Per share (?) 155.73 146.47
P / E Multiple 28.28 6.52

In accordance with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations) the Company is required to givedetails of significant changes (change of 25% and more as compared to the immediatelyprevious financial year) in key financial ratios.

Ratios where there has been significant change from the financial year2020-21 to 2021-22

1. Decrease in Operating Profit Margin PAT / Sales % Return onEquity Interest Service Coverage Ratio and Earnings per Share is mainly on account ofprofit on sale of 4% stake in Coromandel International Limited a subsidiary of theCompany in the previous year.

2. Decrease in Net Debt / Equity Ratio % and Outside Liabilities /Networth % is mainly on account of repayment of major high cost long term debts and otherpayables out of proceeds from sale of 4% stake in Coromandel International Limited andincreased internal accruals.

3. Increase in PE multiple is on account of higher EPS in the previousyear on account of the profit on sale of 4% stake in Coromandel International Limited.


Year 2021-22 saw a paradigm shift in the way Organizations andBusinesses approach risk and prepare for disruption. Ranging from supply chain woes to ahybrid work environment onslaught of Delta variant to eruption of geopolitical conflictsOrganizations of all sizes faced incredible obstacles that were unheard of a few yearsago. While these uncertainties create disruptions in key business activities theorganization also recognizes opportunities to view risks in terms of their potential todrive performance and go beyond.

The Company has a robust risk management framework to identify andevaluate business risks and opportunities. This framework seeks to create transparencyminimize adverse impact on the business objectives and enhance the Company's competitiveadvantage. The Company's risk management framework defines the risk management approachacross the enterprise at various levels including documentation and reporting.

The Risk Management policy requires the organization to identify therisks the businesses are exposed to and categorize them based on the impact andprobability of occurrence. Mitigation plans are laid out for each risk along withfrequency of risk monitoring and identification of the risk owner thereof. These arediscussed with the Risk Management Committee on a periodic basis.

Risk Category Risk Mitigation Plan
Raw Material Availability Due to the adverse weather conditions non 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 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 mechanized harvesting for timely harvesting and for making sugarcane a profitable crop by yield improvement. The Cane team is working on reducing the cost of cultivation and increasing the yield per acre thereby enhancing the income for the farmer. The Company has launched the 'Farmers Connect' app for better interaction and speedier support to the farmers. The Company enjoys a good brand value and trust amongst the farmer community by ensuring timely payments and through regular interaction with them through village meetings and personal care initiatives. The Company enjoys a preferred partner status with the farming community for sugarcane supply. The R&D initiatives of the Company provides control measures to mitigate and contain pests and diseases.
Water availability and Management Water availability - Safe water resource management and groundwater recharge efficiency • For the Nutraceutical 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 the AMM Foundation. Additional water storage facilities have been created for storing of water and rain water harvesting at many places in the plant.
• Non availability of water due to monsoon failure
• Ground water depletion
• Poor quality of ground water
Water management - Nutraceuticals - No space to divert the excess filtrate hence increase in water levels of the ponds resulting in low quality and productivity. • Lagoon desilting and bund strengthening: With this exercise in FY 2019-20 and FY 2020-21 the Company has enhanced the OYR lagoon capacity to hold 100LL of excess water.
• In FY 2020-21 the Company has constructed a pond with a holding capacity of 50LL in NUSM. In addition at NUSM the Company has raised the center wall height of all the 26 operating ponds from the existing 30 CM to 50 CM which avoids early pond closure during unprecedented rainfall.
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.
Sugar Price Increase in FRP without proportionate increase in MSP increase affecting profitability. • After Bagalkot distillery the Company is setting up a 120 KLPD Grain based distillery at Sankili to reduce dependence on production of sugar and increase distillery volume.
• At Nellikuppam ethanol production capacity has been increased to 65 KLPD from 45 KLPD. Further expansion to 90 KLPD is being envisaged.
• Increase in retail volume including jaggery and Amrit.
Power Sale and Tariff Power sale in Karnataka and Andhra Pradesh were under PPA with State Grid which ended by 31st December in Karnataka and 14th August in Andhra Pradesh. • Secured State Government permission for export of power for Haliyal Bagalkot Sankili Nellikuppam and Pugalur through Open Access.
Volatility in realization - Sale of surplus power to external parties via Open Access Mode. • Agreement with third parties for sale of Power from Sankili unit in AP.
• Ramdurg - Secured power price through favourable judgement of APTEL with price escalation for the next 4 years.
Shortage of Harvesting Labour Non-availability of Migrant Labour for Cane harvesting. • Deployment of local harvesting labour and self harvesting.
• Farmers are being encouraged for wider row planting and for increasing the share of mechanised harvesting.
Business Continuity during pandemic Talent Wellness and Business Continuity during ongoing Covid pandemic • Business Continuity manual is fully implemented across the organization by institutionalizing the Prevention Management & Sustenance module (PMS) for COVID Management across the company.
• All the local notification as per the Disaster Management Act 2005 complied with.
• Organized "Swayam Suraksha Abhiyan" (SSA) across the company which has helped to vaccinate 98.14% of employees.
• Prepared and implemented onsite COVID Emergency preparedness & response plan at all locations
• Rapport and network with healthcare institutions and Corporate insurers to handle COVID emergencies
Investment The Company has invested in Parry Sugars Refinery India Private Limited a wholly owned subsidiary. • Periodical review mechanism is in place to monitor the investment risk of the portfolio of assets and to oversee the strategic decision.
Any non- performance of the invested entities will have a risk of sub-optimal return on investment. • Greater focus on other possible revenue streams to mitigate from operational challenges.
Cyber Security The Company may encounter nonavailability of service or failure of multiple systems which may lead to disruption in business operations due to lack of adequate processes cyber security back-up 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. Further user awareness about cyber security risks are being spread by periodical training/information through emails etc.
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. • 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 analyzed 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.
Regulatory The Company is required to comply with a number of laws such as Companies Act SEBI Regulations and the laws pertaining to Contract labour Taxation Foreign Exchange import & Export Health Safety and Environment etc. Failure to comply with these regulations could result in penalties and reputational damage. A comprehensive e-compliance management system has been deployed across the company to manage the compliance of all 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 in addition to creating awareness of the changes across the respective functions.
COVID-19 could bring about regulatory changes which could result in operational interruptions business restrictions.


The Company has aligned its current system of Internal FinancialControl (IFC) with the requirement under the Companies Act 2013 (the Act). The Companyhas established a robust framework of IFC which includes entity level policies processesand operating level standard operating procedures. The Company has a well-establishedprocess and clearly- 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 longterm 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.

The Company has increased the use of technology data analytics andelectronic paper work including the adoption of an agile Internal Audit plan. To furtherstrengthen assess and report on the internal financial control an in-house managementaudit division has been established by the Company which is ISO 9001:2015 certified and isrecertified in the current year. The internal audit is conducted based on the annual auditplan which is reviewed and approved by the Audit Committee. The Internal Audit reports arepresented to the Audit Committee on a quarterly basis for review and deliberation.

The Management has assessed the effectiveness of the Company's internalcontrol over financial reporting as of March 31 2022 and found the same to be adequateand effective. The Company carried out its internal audit with both in-house andoutsourced Internal Audit teams thus leveraging the business knowledge and processinherent within the organization while combining it with the expertise of the outsourcedauditors in specialized areas.


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 Act the Companyhas prepared a consolidated financial statement of the Company and all its SubsidiaryCompanies which forms part of the Annual Report. A statement containing the salientfeatures of the financial statements of the subsidiary companies joint ventures andassociates are given in Annexure-A to this Report.

In accordance with the provisions of Section 136(1) of the Act theAnnual Report of the Company containing the standalone and consolidated financialstatements has been placed on the website of the Company Further theaudited accounts of the Subsidiary Companies and the related detailed information havealso been placed on the website of the Company The annual accounts ofthe Subsidiary Companies will also be available for inspection by any shareholder at theregistered office of the Company during working hours upto the date of the Annual GeneralMeeting. A copy of the annual accounts of the subsidiaries will be made available toshareholders seeking such information at any point of time.

Parry Sugars Refinery India Private Ltd (PSRIPL)

During the year FY 2021-22 revival in global consumption of sugarpost-pandemic resulted in a more tightly balanced demand supply situation. Recordproduction from India compensated for the lower output from China South Africa and EU.Demand for refined sugar was impacted in the first half of the year due to record exportof Indian low quality white sugar forcing the white premium to breach lows of 50 USD/MTlevels. However demand for refined sugar picked up in the second half of FY 2021-22 andwhite premiums rallied to get more supplies from refiners.

PSRIPL continues to be globally renowned as an efficient reexportrefiners of sugar offering a range of quality products for international trade andinstitutions. Suspension of container shipping ex Kakinada and limited containeravailability ex Vishakhapatnam severely impacted container sales volumes of PSRIPL. Thiscoupled with lower refined sugar demand in H1 FY 2021-22 led to a decline in overallsales volume from 8.21 LMT to 6.23 L MT. Consequently the turnover decreased to 2005Crore in FY 2021-22 from 2251 Crore in FY 2020-21. Sharp increase in energy pricesfreight rates and higher sugar prices increased refining costs substantially. PSRIPL wasable to mitigate most of this impact by sourcing Indian Raw/LQWs and improving operatingefficiencies. Inflation in material costs energy and freight continues to pose aformidable challenge to operating costs in FY 2022-23. Increasing white premium andcontinued availability of Indian raws/ LQWs will help PSRIPL counter these escalation incosts during the year FY 2022-23. Improvement in container availability will help inrestoration of container business volumes.

During the year PSRIPL incurred a loss of ' 13 Crore due to lowervolumes and increased refining costs. Parry International DMCC a wholly owned subsidiaryof PSRIPL based out of Dubai recorded a trading volume of 8100 MT and a loss of AED 0.817Million.

US Nutraceuticals Inc

During the year the Company's wholly owned subsidiary USNutraceuticals Inc. achieved sales of US$ 33 million as against US$ 26 million in theprevious year. In the core Saw Palmetto Business the company consolidated its marketposition by achieving a significant growth of 25% over the last year. The formulationbusiness of joint health was revived and exhibited good growth. The investments in Scienceand B-C marketing efforts is expected to increase the Company's participation in thelarger value pool of the US Dietary supplements market.

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 yield.The investments made in the prior years on water quality improvements have resulted inenhanced quality and productivity. The Company has been constantly working towardsbringing good manufacturing practices which will improve productivity with lower cost ofproduction.

E.I.D. Parry Europe B.V.

The Company had incorporated a wholly owned subsidiary namely EIDParry Europe BV in Netherlands on January 8 2020 in order to cater to the sales andmarketing needs of the customers and markets in Europe. Due to change in the businessmodel and requirements the Board at its meeting held on June 29 2021 approved theclosure of EID Parry Europe BV which was yet to carry on any business or operation.E.I.D. Parry Europe B.V. has been liquidated and deregistered from the Dutch traderegistry with effect from August 18 2021.

Coromandel International Limited (CIL)

Coromandel displayed a resilient performance during the yearregistering strong growth across the business segments. This was despite the uncertainbusiness environment impacted by the Covid-19 related interruptions geo-politicaluncertainty supply chain disruptions and firm raw material scenario.

In its fight against the pandemic the Company augmented theGovernment's efforts in Covid management through vaccination programs providing oxygengenerating units and spreading the awareness of maintaining Covid protocols to the localcommunities around its Plants and to its extensive rural marketing network throughout thecountry.

Coromandel continued to promote balanced nutrition and integrated pestmanagement practices. It is serving the farming community by providing crop specificproducts and solutions through its direct retail network and advisory through itsagronomist teams. The company focused on operational sourcing and marketing efficienciesto ensure that agri inputs are available at the right time to the farmers. The company hasbeen investing in R&D and product development and has launched 8 new products duringthe year to meet the agricultural needs of the farmers.

In terms of financial performance CIL's consolidated total income grewby 35% to reach 119255 Crore EBITDA grew by 11% to reach 12298 Crore EBITDA margin isat 12% and net profit improved by 15% to reach 11528 Crore for the year.


Algavista Greentech Private Limited (AGPL)

The Company's Joint Venture Algavista Greentech Pvt Ltd hassuccessfully optimised the manufacturing processes in producing the Natural Blue color(Phycocyanin). During the year the Company has initiated the establishment of a strongcustomer base with major colour distributors and food manufacturers as part of its growthstrategies. In addition to the colors segment Phycocyanin has been aggressively promotedas a nutraceutical ingredient based on its superior anti-inflammatory properties. Thecompany has been constantly working to improve productivity with lower cost of production.AGPL's strong engagement with major global customers is expected to fructify intosustainable sales in the coming years.


The Company believes that people are its key assets and focuses onnurturing and developing human talent that delivers continued growth through businessleadership operational excellence quality products and customer delight. Company'sPeople Vision 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: Talent Wellness CapabilityDevelopment Employee Engagement and Business HR.

The prevailing business challenges due to the pandemic has accentuatedthe management's resolve to respond in more sophisticated and innovative ways to managepeople care and ensure the wellness of employees. The managers are fully aware that onlysuccessful people management practices would facilitate them to achieve the desiredbusiness goals.

The Company enables every employee to achieve high standards ofperformance and to undertake challenging goals by institutionalizing a CompetencyDevelopment Framework. The Company scales up capabilities across various functions bycreating specialist knowledge / domain experts in sugar distillery cogeneration andvalue added products to enhance internal efficiencies. A series of interventions have beenrolled out in terms of enhancing the capabilities of executives especially the leadershipteam through individual development plans leadership coach accreditation programs etc.

The Company is committed to build the 'Best Employer' brand for theorganization and most importantly provide a happy nurturing ecosystem for the employees.An ecosystem that is not only empowering but also helps to build capabilities to meetthe challenges of a fast changing dynamic world environment. The Company believes that amotivated employee with a passion for innovation in a given environment of learning andgrowth would engage and succeed in all initiatives.

As on March 31 2022 the total number of permanent employees on therolls of the Company stand at 2068. Industrial relations remained cordial at all theCompany's units during the year under review.


During the year the Company received the following Awards.

1. Nellikuppam unit received the Platinum award for the 'BestDistillery' for FY 2019-20 and Gold Award for 'Best Distillery' for FY 2020-21 from TheSouth Indian Sugarcane & Sugar Technologists' Association (SISSTA) on 50th GoldenJubilee Annual Convention on 01st October 2021.

2. The Company received the Award for 'Best Corporate SocialResponsibility Practices' on March 24 2022 in the Global CSR & Excellence LeadershipAwards for FY 2021- 22.

3. Sankili unit received the Gold award 'Best Distillery' for FY2019-20 and Silver Award for Best Co-generation plant Silver Award for the period 2019-20from The South Indian Sugarcane & Sugar Technologists' Association (SISSTA) on 50thGolden Jubilee Annual Convention on 01st October 2021.

4. Haliyal unit received the 'Best Technical Efficiency Award -Karnataka' for FY 2020-21 from Sri. Nijalingappa Sugar Institute Belgaum on 20thDecember 2021

5. Bagalkot Unit received the National Safety Award for achieving the'Highest Accident Free Mandays and Lowest Frequency Rate' from the Hon. Minister forLabour & Employment Government of India Shri Bhupender Yadav for the performanceyear 2018 on January 10 2022.


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 Complaint Committee is in place toredress the complaints received regarding sexual harassment. All employees are coveredunder this policy. During the year one complaint was received and disposed of by theCompany.


As per the provisions of Section 152 of the Act read with the Articlesof Association of the Company Mr. Ramesh K.B. Menon (DIN: 05275821) Director retires byrotation at the forthcoming Annual General Meeting and being eligible offers himself forreappointment. The requisite details in this connection are provided in the Noticeconvening the meeting and in the Corporate Governance Report.

The Board of Directors vide their resolution dated October 04 2021have appointed Mr. Sridharan Rangarajan (DIN: 01814413) as an Additional Director of theCompany in the category of Non-Executive Non-Independent Director. Mr. SridharanRangarajan holds office up to the date of this Annual General Meeting. Notice has beenreceived from a member for the appointment of Mr. Sridharan Rangarajan as a Directorliable to retire by rotation.

The Board of Directors vide their resolution dated March 17 2022 haveappointed Mr. S. Durgashankar (DIN: 00044713) as an Additional Director of the Company inthe category of Non-Executive Independent Director with effect from March 21 2022 for aperiod of five years. The shareholders vide their resolution dated May 12 2022 haveapproved the appointment of Mr. S. Durgashankar (DIN: 00044713) as a Non-ExecutiveIndependent Director with effect from March 21 2022 for a period of five years.

The Board of Directors at their meeting held on May 17 2022 haveappointed Mr. Muthiah Murugappan (DIN: 07858587) as a Whole-Time Director and designatedas Whole-Time Director and Chief Executive Officer subject to approval of theshareholders at the ensuing Annual General Meeting.

The term of Mr. S. Suresh (DIN: 06999319) Managing Director of theCompany shall expire on July 31 2022. The Board of Directors at their meeting held on May17 2022 have reappointed Mr. S. Suresh for a further period of two years w.e.f. August1 2022 subject to approval of the shareholders at the ensuing Annual General Meeting.

Mr. V. Ravichandran (DIN:00110086) Director of the Company resignedfrom the Board with effect from October 4 2021 due to his personal commitments.

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

Mr. S. Suresh Managing Director Mr. A. Sridhar Chief FinancialOfficer and Mr. Biswa Mohan Rath Company Secretary are the Key Managerial Personnel ofthe Company as per Section 203 of the Act. During the year Mr. S Rameshkumar resigned asChief Financial Officer of the Company on August 12

2021. Mr. A Sirdhar joined as the Chief Financial Officer of theCompany with effect from August 13 2021.

Number of Meetings of the Board

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

Board Evaluation

The performance of Committees of the Board and also the directorsindividually was evaluated in accordance with the Act and Listing Regulations. The mannerin which the evaluation was carried out and the process adopted has been given in theCorporate Governance Report.

Policy on Directors' Appointment and Remuneration and Other Details

The Board has on the recommendation of the Nomination and RemunerationCommittee (NRC) framed a policy for the selection and appointment of directors seniormanagement and the criteria for determining the qualifications positive attributes andindependence of directors including fixing their remuneration. The Remuneration Policyand criteria for Board nominations are available on the Company's website at


Pursuant to Section 134(3) and 134(5) of the Act your Directors tothe best of their knowledge belief and according to information and explanations obtainedfrom the management confirm that:

• In the preparation of the annual accounts for the financial yearended March 31 2022 the applicable accounting standards have been followed and there areno material departures therefrom;

• 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 31 2022 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.


Statutory Auditors

M/s. Price Waterhouse Chartered Accountants LLP (FRNo.012754N/N500016)Chennai were appointed as Statutory Auditors of the Company by the shareholders at the42nd Annual General Meeting held on August 4 2017 to hold office up to the conclusion ofthe 47th Annual General Meeting.

Approval of the shareholders is sought for the re-appointment of M/s.Price Waterhouse Chartered Accountants LLP as Statutory Auditors of the Company to holdoffice for a period of five years from the conclusion of the 47th Annual General Meetingtill the conclusion of the 52nd Annual General Meeting.

There are no qualifications reservations or adverse remarks ordisclaimers made by the Statutory Auditors on the standalone financial statements in theirreport for the year 2021-22.

Cost Auditors

In terms of the Section 148 of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 and the Companies (Cost Records and Audit) Rules 2014 asamended from time to time cost audit is applicable to company's businesses of sugardistillery and cogeneration of power. The accounts and records for the above applicablebusinesses are made and maintained by the Company as specified by the Central Governmentunder sub-section (1) of Section 148 of the Act.

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 2022-23on a remuneration of '850000/- (plus out of pocket expenses and applicable taxes).

A resolution seeking members' ratification for the remuneration payableto the Cost Auditor forms part of the notice convening the Annual General Meeting.

The cost audit report for the financial year 2020-21 is filed with theMinistry of Corporate Affairs. The cost audit report for the financial year 2021-22 wouldbe filed with the Ministry of Corporate Affairs as per the provisions of the Act.

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 2021-22. 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 report for the year 2021-22.

Secretarial Audit of Material Unlisted Indian Subsidiary

Parry Sugars Refinery India Private Limited (PSRIPL) a materialsubsidiary of the Company carried out Secretarial Audit for the Financial Year 2021-22pursuant to section 204 of the Companies Act 2013 and Regulation 24A of the ListingRegulations. The Secretarial Audit Report of PSRIPL submitted by M/s. Srinidhi Sridharan& Associates Company Secretaries Chennai is attached as Annexure-B1 to this Report.

There are no qualifications reservations or adverse remarks ordisclaimers made by the Secretarial Auditors of PSRIPL in their report for the year2021-22.


The Company's CSR initiatives primarily focus on improving the qualityof life of the communities where it operates through socio-welfare initiatives. Thevarious CSR initiatives undertaken by the Company during the last financial year includethe following:

• Healthcare

The Company pursues a well-managed health care programme across itsunits providing medical amenities for people living in neighbouring villages. 'Hospitalon Wheels' a well-equipped mobile unit with diagnostic and medical intervention amenitiesmakes emergency care possible for people living in remote areas while mobile medical unitsattend to the needs of the elderly in the cane growing villages around the Units. Inaddition to the comprehensive health and medical care programs due to the sudden surge ofCovid in a second wave a special focus was given to Covid prevention initiatives acrossour factory locations such as providing sanitisers in the neighbouring communitiesinstalling oxygen plants in nearby Government Hospitals vaccinating Harvesting Gangs andtheir family members supporting the local Public Health Centres by providing medicalequipment and infrastructure to handle the Covid-positive patients. Medical camps wereconducted offering health checkups and free medicines for cane growers harvesting andtransport labourers.

• Education / Skill Development

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. Mid-day meals forBalwadi school children of labourers and women skill development programmes are few of theongoing initiatives.

• Rural Development & Eradicating Hunger

The Company has always played a key role in extending support tovillagers. As part of the rural development and hunger eradication initiatives food andgrocery items were provided to the needy people in the nearby communities. Communitydevelopment works were also undertaken in the villages in and around the units. As part ofits Rural Development program the Company improved public roads in the nearby villagesextended support to water management projects and undertook the desilting of ponds andcanals to augment the water supply to villages and schools.

The Company has constituted a CSR Committee in accordance with Section135 of the Act.

The CSR Committee has formulated and recommended to the Board a CSRPolicy indicating the activities to be undertaken by the Company which has been approvedby the Board. The CSR Policy can be accessed on the Company's website at www.eidparry.comAs per the provisions of the Act the Company was not required to spend any amount towardsCSR for the year 2021 - 22. However the Company has been actively involved in various CSRinitiatives and an amount of ' 148.96 Lakh was spent towards CSR activities during theyear 2021-22. The Annual Report on CSR activities is given in Annexure-C to this Report


All contracts / arrangements / transactions entered into by the Companyduring the financial year with the related parties were on arm's length basis and were inthe ordinary course of business. There were no materially significant related partytransactions with promoters directors key managerial personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large.

During the year the Company has not entered into any contracts orarrangements with related parties as referred to in sub-section (1) of section 188 of theAct.

Accordingly the disclosure of related party transactions as requiredunder Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY2021-22 and hence does not form part of this report.

All Related Party Transactions are placed before the Audit Committeefor approval. Prior omnibus approval of the Audit Committee is obtained on a yearly /quarterly basis for the transactions which are of a foreseen and repetitive nature. Thetransactions entered into pursuant to the omnibus approval so granted are placed on aquarterly basis before the Audit Committee for their review.

The policy on Related Party Transactions as approved by the Board isavailable at the web link: policies-codes/.


The Company had in the past approved an Employee Stock Option Scheme2007 (ESOP Scheme 2007) under which employees were granted Options. The Company madegrants under the said Scheme from 2007 to 2011. There were no vested Options outstandingat the end of the financial year and there will be no grants issued under the ESOP Scheme2007.

The Company has introduced Employee Stock Options Plan 2016 (ESOP2016) during the year 2016-17. The ESOP 2016 was approved by the Board at its meeting heldon November 7 2016 and by the shareholders of the Company by way of a special resolutionthrough a Postal Ballot on January 21 2017. The Shareholders had authorised the Board/Nomination and Remuneration Committee (NRC) to issue to the employees such number ofOptions under the ESOP 2016 as would be exercisable into not exceeding 3517000 fullypaid-up equity shares of '1/ - each in the Company. NRC is empowered to formulate thedetailed terms and conditions of the ESOP 2016 administer and supervise the same. Thespecific employees to whom the Options is granted and their eligibility criteria isdetermined by the NRC. Further the NRC is empowered to determine the eligible subsidiarycompanies whether existing or future whose employees will be entitled to stock optionsunder this Scheme. Options granted under this ESOP 2016 would vest on or after 1 (one)year from the date of grant but not later than 4 (four) years from the date of grant ofsuch Options or any other terms as decided by the NRC.

During the year 97010 options were granted and the total number ofoptions unvested vested and outstanding as at March 312022 was 336175. The details ofthe Options granted upto March 31 2022 and other disclosures as required underRegulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefitsand Sweat Equity) Regulations 2021 is available on the Company's website

The Company has received a certificate from the Secretarial Auditors ofthe Company that the above referred Scheme had been implemented in accordance with theSecurities and Exchange board of India (Share Based Employee Benefits and Sweat Equity)Regulations 2021 and the resolutions passed by the Members in this regard.


The report on corporate governance along with certificate from apracticing Company Secretary regarding compliance of conditions of Corporate Governance asstipulated under the Listing Regulations is annexed to this Report. The report alsocontains the details required to be provided on the board evaluation remuneration policyimplementation of risk management policy whistle-blower policy / 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 Listing Regulations.


Pursuant to the applicable provisions of the Companies Act 2013 readwith the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 (IEPF Rules)all dividends which remains unpaid or unclaimed for a period of seven years are requiredto be transferred by the Company to the IEPF established by the Central Government.Further according to the IEPF Rules the shares in respect of which dividend has not beenencashed by the shareholders for seven consecutive years or more are also required to betransferred to the Central Government (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 Unclaimed-Dividend.

During the year the Company has not transferred any unclaimed dividendto the IEPF established by the Central Government. The Company has also not transferredany Equity Shares in respect of which dividend has not been paid or claimed for sevenconsecutive years or more as enunciated under Section 124 (6) of the Act.

DISCLOSURES Audit Committee

The Audit Committee comprises of Mr. V. Manickam Independent Directoras the Chairman Dr. (Ms) Rca Godbole Independent Director Mr. M. M. VenkatachalamNonExecutive Non-Independent Director Mr. Ajay B. Baliga Independent Director and Mr.S. Durgashankar Independent Director as members.

Corporate Social Responsibility (CSR) Committee

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

Stakeholders Relationship Committee

The Stakeholders Relationship Committee (SRC) comprises of Mr. M. M.Venkatachalam Non-Executive Non-Independent Director as the Chairman Mr. V. ManickamIndependent Director Mr. S. Suresh Managing Director and Mr. Ramesh K B MenonNon-Executive Non-Independent Director as members.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee (NRC) comprises of Mr. AjayBaliga Independent Director as the Chairman Dr. (Ms) Rca Godbole Independent Directorand Mr. Ramesh K B Menon Non-Executive Non-Independent Director as members.

Risk Management Committee

The Risk Management Committee comprises of Mr. V. Manickam IndependentDirector as the Chairman Mr. S. Suresh Managing Director Mr. Ajay Baliga IndependentDirector and Mr. M. M. Venkatachalam NonExecutive Non-Independent 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 and the details of the same aregiven in the Corporate Governance Report.

Business Responsibility and Sustainability Report (BRSR)

Regulation 34 of the Listing Regulations mandated that the AnnualReport of top one thousand listed entities based on market capitalization shall contain abusiness responsibility report describing the initiatives taken by the listed entity froman environmental social and governance perspective in the format as specified by SEBIfrom time to time. Provided that the requirement of submitting a business responsibilityreport shall be discontinued after the financial year 202122 and thereafter with effectfrom the financial year 202223 the top one thousand listed entities based on marketcapitalization shall submit a Business Responsibility and Sustainability Report (BRSR) inthe format as specified by SEBI from time to time. However even during the financial year2021-22 the top one thousand listed entities may voluntarily submit a BRSR in place ofthe mandatory business responsibility report.

The Company is ranked in the 372th position as per the marketcapitalization at NSE as on March 31 2022. Though the requirement of BRSR applies to theCompany from the Financial Year 2022-23 as a matter of good governance the company hasvoluntarily adopted BRSR for the Financial Year 2021-22.

Dividend Distribution Policy

Pursuant to Regulation 43A of Listing Regulations the top 1000 listedCompanies are required to formulate a Dividend Distribution Policy. The Company's DividendDistribution Policy as approved by the Board is available on the Company's website at

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 Act read with Rule 8(3) of the Companies(Accounts) Rules 2014 is given in Annexure - D to this Report.

Loans Guarantees and Investments

During the financial year the Company has given loans guarantees tosubsidiaries within the limits as prescribed under Section 186 of the Act. Details ofLoans and Guarantees are given in Annexure - E to this Report.

Particulars of Employees and Related Disclosures

The information relating to employees and other particulars as requiredunder Section 197 of the Act read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 will be provided upon request. In termsof Section 136 of the Act the Report and Accounts are being sent to the Membersexcluding the information on employees particulars of which are available for inspectionby the Members at the Registered Office of the Company during the business hours on allworking days of the Company upto the date of the forthcoming Annual General Meeting. Ifany member is interested in obtaining a copy thereof such Member may write to the CompanySecretary in the said regard.

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.

Insolvency and Bankruptcy Code

During the year 2020-21 an application was filed under section 9 ofthe Insolvency and Bankruptcy Code 2016 (31 of 2016) against the Company before theNational Company Law Tribunal Chennai. The Petitioner has claimed that it had notreceived payment from the farmers for the alleged supply and installation of irrigationsystems to the farmers in the Company's Command area during the year 2010-11 for whichthe Company stood as a guarantor. A detailed counter was filed by the Company refuting allthe allegations. The Matter is yet to be heard by the Tribunal. No application under IBCwas initiated by the Company as on March 31 2022. There was no instance of one timeSettlement with any Bank or financial institutions.

Annual Return

In terms of Section 92 of the Act the Annual Return of the Company inForm MGT-7 is placed on the website of the Company and can be accessed shareholders-meeting/.

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 Act.


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 the Act.

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

3. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme save and except ESOP referred to in this Report.

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

No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture. There are no material changes and commitments affecting the financial position ofthe Company which have occurred between March 31 2022 and the date of this report.


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

On behalf of the Board
Place : Chennai M.M.Venkatachalam
Date: May 17 2022 Chairman