Dear Shareholders
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).
" Quality has been our dictum in any product "
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.
Going forward
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.
" Enhancing value for our stakeholders since inception "
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
Chairman