Dear Shareholders,

It is with mixed emotions that I am addressing you at this critical juncture: At the one end of the spectrum, there is a sense of pride and accomplishment over the record performance posted by the Company during the year, whereas at the other end is the COVID-19 pandemic which has caught the world under its fold, costing countless human lives and disrupting the entire cycle of global economy. We have not faced a more uncertain environment before, but I do believe that we have the ability to combat the pandemic, and emerge as the winner, even stronger than before.

Our major business portfolio - Sugar and Co-products, being essential goods, were not impacted during the lockdown period and operated normally. During the lockdown period, the businesses were managed with extensive use of digital technology, which will now replace the conventional ways of working in many ways. These are expected to bring about not only improvement in productivity but significant cost efficiencies also. It will be our endeavour to keep our employees and other stakeholders safe without compromising our quality or productivity. I wish to say that I am confident that, with our positive approach, we shall emerge victorious in every battle ahead.

As I look back at FY 20, I see how effectively we leveraged the intrinsic positivity of our attitude and the robustness of our business strategy to deliver one of the most powerful business performances in the Company’s history.

The key reasons for our improved sugar performance were our persistent focus on high sucrose and high yielding sugarcane varieties, effective disease & pest management, better operating efficiencies in utilities, lower cut-to-crush time, and efficient and cost-competitive logistics management. Further, we have managed working capital well, with year-end sugar inventories being 15% lower than the previous year despite higher sugar production. This was made possible by higher exports and production of B-heavy molasses to manufacture ethanol.

The Central Government has been promoting higher production of ethanol and, under the Scheme so framed, offered interest subvention on loans contracted to set up additional capacity. Under the Scheme, we have expanded our distillery capacity by setting up a new 160 KLPD distillery at one of our sugar units. We also installed an incineration boiler at the existing distillery and other auxiliary systems for modernising and upgrading the Effluent Treatment Plant (ETP) at the existing distillery. Under the Scheme, loans of ₹ 176.93 crore were availed with substantial interest subvention. It raised our annual capacity to 320 KLPD. Our total production during the year increased by 95%, and we achieved high levels of fermentation and distillation efficiencies. I am happy to share that we moved swiftly to join the nation’s fight against the COVID-19 pandemic by setting up a Hand Sanitizer production facility at our Muzaffarnagar distillery. We aim to enhance the production of sanitizers and move into manufacturing of premium hand sanitizers as we augment our efforts in this area, thus also adding an additional revenue stream for the Company.

In the Engineering segment, we have achieved encouraging growth – both in turnover and profitability. In Gears Business, we continued to expand our business with foray into several new segments and regions. The growth in this segment spanned OEM Exports, Refurbishment and Loose Gears. The long-term prospects for the Water business also seem promising despite the muted order finalisation during FY 20, as the Central and State Governments continue to push for, and invest in, water infrastructure. The Central Government’s focus on Namami Gange for cleaning of Ganga, JICA-funded projects in Delhi and Karnataka, AMRUT programmes for Pollution abatement, Recycling and Re-use, along with stricter vigil by the National Green Tribunal, will be key demand drivers in this business.

In the Engineering segment, we have achieved encouraging growth – both in turnover and profitability. In Gears Business, we continued to expand our business with foray into several new segments and regions.

The situation arising from COVID-19 poses uncertainty in terms of return to normalcy for our Engineering business. It would depend on when the disease is controlled in the industrial segments and geographies we operate in, and the financial position of our customers to undertake investments and place orders. Given the magnitude of the crisis and the financial losses it may have caused, businesses may take time to restore their activities. However, in Water business, where most of the projects are Government sponsored or originate from municipalities, the inflow of orders and finalisation may not be significantly delayed. In the Sugar and Distillery businesses, the sugar and fuel demand were initially impacted during the lockdown period but these have almost reverted to normal offtake.

Our strategic approach, in this environment, is likely to be cautious, but we remain firmly on track with our long-term plans, and will utilise this period to consolidate our strengths as we prepare for the next phase of growth.

The coming year will also be one of enhancing our community outreach as we partner with the nation in helping those most affected by COVID-19, through our Corporate Social Responsibility (CSR) initiatives. We are cognisant of our role in India’s economic and social revival in the post pandemic period, and shall strive to go beyond our capacities and capabilities to contribute extensively to the same.

I am confident that in this endeavour, I shall continue to get the support of our people, as also other stakeholders who remain integral to our strategic agenda.