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The management at Bannari Amman Sugars Limited is pleased to present the Annual Report of your Company. At the outset let me tell you that we are immensely humbled and grateful to each and every one of you who have shown utmost trust and confidence on our management, our business model and our strategy. The numbers that we reported during the year under review are a testament of our competitive advantage and long-term sustainability.
Ever since the company was established we have never looked back as far as our performance is concerned with an exception of few years where there were extreme dry spell circumstances due to drought conditions. In spite of various testing times confronted by the organization among the years, we have always kept in mind the interest of our shareholders and we never fizzled. We have always paid dividend since inception without a single year of interruption and keep on increasing the net worth consistently.
The quality of sugar has been acknowledged to be one of the best in the industry and we are the preferred source of supplier for marquee customers.
We are one of the pioneers of integrated sugar operations in the country. Our cost of operations has been consistently low due to the highest level of efficiency maintained in the factories. We have always focussed on technical up-gradation of our equipments in the factories to increase the efficiency.
Bannari Amman Sugars is a financially focused business. We have strong financial controls and effective governance across the company and we monitor performance against our clear aims and KPI’s. We have judiciously used surplus generated during industry upturn to pare debts, stay lean and financially fit. Our relationship has been very good with the farmers. Usually all the cane planted in the area are registered with us, baring a minuscule percentage. Even in the case of higher price they can convert it to jaggery, they prefer to supply to our factories for our services rendered, not only for the cultivation of sugar cane but also for our various socio-economic activities. Our assistance to the growers by the way of providing loans to farmers for purchase of second-hand tractors and trucks, deepening of wells, supply of quality of seeds, fertilizers and technical services has helped to increase yield per acre.
In order to have a stable production and cane price structure, it’s necessary to follow a Revenue Sharing Formula (RSF) in respect of cane price, which is already being adopted in countries like Australia, Thailand, and Brazil. In case the Fair and Remunerative Price (FRP) determined by the government is more than the price determined by RSF, the gap should be filled up by the government by establishing Price Stabilisation Fund (PSF).
Our black granite mines owned and operated by the company are the best in terms of colour. The mines are developed and exploited scientifically with best machinery and mining practices to preserve the environment. The market for this segment is very much huge and availability of blocks is the major catalyst for growth in this segment.
CSR services of Bannari Amman Sugars Limited are carried out under Bannari Rural Foundation, a registered non-profitable charitable trust. The trust acts as resource nucleus for providing urban amenities in rural areas. We are working tirelessly to enrich the lives of people in the rural community by providing them with a host of amenities that not just make their lives a whole lot easier but also ensures agricultural, educational and economic independence. Activities carried out by our foundation includes Health camps in rural areas, Sanitation facilities, Contribution to education, Check dam construction, desilting of tanks and waterbodies etc.
Continuous monsoon failure in South India consecutively for the last 3 years is really a dampener to all sugar factories in South as cane plantation has drastically reduced which will have an adverse effect on working of sugar factories.
Our strong financial position, well-equipped factories and close relationships with growers and customers alike are advantages that we will be taking on to the competitive landscape.
Time and again we have proved our operational efficiency and your company never posted a loss, we have been resilient through adversity.
Given the goodwill we enjoy with our cane growers and the excellent support we enjoy from our dedicated employees and from, our shareholders, I remain positive on the outlook for our future.
S V Balasubramaniam