On behalf of the Board of Directors I am pleased to present our AnnualReport for the Financial Year 2019-20. This has been a challenging year due to variousreasons such as reliability issues in Plant Surge in input material price particularlyMolasses unplanned closure of plant during the year end due to Covid19 related lockdownsother regulatory challenges etc. However the compliance has been strengthened across theCompany in order to set a right platform to operate in future.
Despite the turbulent year we focused our investments in improvingprocesses Zero Liquid Discharge (ZLD) environmental compliance to ensure predictabilityin operations and reduction of unpredictable stoppages. We have carried out evaluation onthe energy front and the recommendations shall be taken forward and implemented. We haveundergone Reliability project during the year and once completed same will yield bettercapacity utilization and process.
Our company has immense potential being United Spirits Limited's(USL's) only integrated plant that handles "Grain to Glass" with a clearroadmap for transformation to become the most trusted and respected amongst ENA MaltSpirit and IML manufacturing company in India.
I am able to draw strength from my past experience which has providedme immense insights into the business of the Company apart from the experience gainedduring the transformation journey into Diageo's Global practices which has helped inintegrating the global best business practices with the company's manufacturingsetup. This is a validation of our Company's transformation journey with a clearfocus on following six Important Priorities:
Organization and People
Operation Reliability and consistency.
It is also a testimony to the strong capabilities we have built overthe years as well as the quality of talent now in the Company. Despite several regulatorychallenges which impacted the industry last year we posted improvement in ourperformance underlined by growth in external net sales after adjusting for operatingmodel changes. We delivered an enhancement of Gross Margin which was made possible throughprice advantage from raw material cost mitigation of risks from the various environmentaland external interventions through policy advocacy a relentless focus on productivity andrealization of headline pricing.
Strengthening the operations
Our performance has been driven with focus on the four Key Operationalareas production of Extra Neutral Alcohol (ENA) from Grain ENA from Molassesproduction of best in Class Malt Spirit and largescale inhouse maturation. The Maturationprocess is constantly monitored and the Spirit was rated as the finest in Industry byDiageo India's Technical centre and shall be game changer for future growth includingmanufacturing Indian Made Liquor (IML) Brands for United Spirits Limited.
Parallelly we made further progress on our fit for purpose'operating model in the above areas of operation.
Ontime seasonal purchase taking competitive advantage by ensuringconsistent quality of ENA.
Our margins are heavily dependent on the Government policies which aremore oriented towards increasing the revenue of the Government change in climaticconditions especially monsoon impact subsidy realization depreciation and interest onborrowings. In light of the above I am glad to announce that with support of UnitedSpirits Limited and Diageo we are now creating a roadmap to minimize the impact enablesustainability and reduce dependency on the above by increasing operational stability andefficiencies as a key towards consistent earnings.
Our role in society
We constantly endeavour to reduce the harm caused by irresponsibleconsumption of alcohol and enable the people to make a positive contribution to society. Iam pleased to inform that this year we have seen more engagements from local communitiesgovernment agencies traffic police enforcement agencies media and reputednot-for-profit organizations on major initiatives taken by the Company towards roadsafety provision of safe drinking water during summer repairing of access roadsdesilting of rivers teaching skills to women and providing bore wells and severalinitiatives to stand by society during Covid pandemic.
Your Company is supported by United Spirits Limited in its commitmentto minimising the environmental impact across its operations. We are proud of the progresswe are making on Key Performance Indicators (KPI) towards our environmental initiatives.
Building a talented and inclusive workplace
Our commitment to enable employees to be the best they canbe' as a core principle. At the core of our business strategy we continue to investin training exposing people to new technologies and in process improvement methodologies.We have created a roadmap and are in the process of launching policies competitive rewardprogrammes coaching and wellbeing initiatives for empowering the employees. Indeed ourachievements in this challenging year bear testimony to the quality of talent in theCompany our growing reputation as an employer and our focus on leadership development.
I also take the opportunity to welcome our new independent director Ms.Srivathsala into the Board which I believe would strengthen the Board functioning and getmultiple perspective of any issue.
I would like to conclude by saying that our core aim is to bring in asignificant change in the general perspective of the society towards spirit manufacturingsector and to leave a legacy of a business which will sustain on the core foundations ofethical standards and sustainability. We are ready to embrace the opportunities oftomorrow and to map the next phase of our journey.
On behalf of the Board I would like to extend our deepest appreciationto the management team for their dedication and commitment in driving your Companyforward. Our sincere appreciation also goes to all employees who relentlessly strivedagainst odds and for playing an important role in ensuring that your Company continues tobe one of the leading Distillery in Maharashtra. We would also like to express ourgratitude to all stakeholders partners and customers for their support to your Company.Looking forward to your continued support as we step into challenging times ahead
Thank you for standing by us in this challenging journey.
|Yours sincerely || |
|July 23 2020 ||Alokesh Biswas |
|Bengaluru || |