The Company has reported record turnover and profitability in FY 20. Sugar business (including Distillery and Co-generation) has achieved 50% increase in turnover with 67% increase in Profit before Tax (PBT) and the Engineering Business has achieved 17% increase in turnover and 39% increase in PBT. All the businesses have done well with the exception of Cogeneration where the results have been impacted by steep decline in the power tariff for the power exported to the grid.

The much improved operating performance of the sugar operations has helped the Company to report higher profitability - sugarcane crush during the financial year increased by 9%, recovery by 15 basis points (after considering adjustment of sugar diverted in B-Heavy Molasses) and sugar production by 7%. Higher production would have normally led to increase in working capital requirements and finance cost but the Company accelerated the export programme under Maximum Admissible Export Quantity (MAEQ) Scheme of the Central Government (GoI) and exported significant quantities during the current financial year. Further, it produced B-Heavy Molasses at three sugar units which accounted for diversion of sugar to the extent of 30209 MT. As per the scheme of monthly quota by the GoI, higher quota for domestic sale was allocated to the Company as an incentive for exports made and B-Heavy Molasses produced. Consequently, sugar inventories held as on March 31, 2020 are 15% lower than the inventories held on March 31, 2019.

Depreciation & amortisation have increased by 32% mainly due to capital expenditure of ₹215 crore incurred in setting up a new distillery and & installation of an incineration boiler at the existing distillery Further, due to adoption of Ind AS 116 "Leases" Right of Use (ROU) assets were recognised which has resulted in higher charge by ₹6.32 crore.

The finance cost has increased by 17% despite increase in average utilisation of working capital requirements by 40% and term loans by 165%. To help the sugar industry and check supplies in the market, the GoI had introduced a Buffer Stock Scheme under which the sugar mills are required to keep the prescribed sugar stocks, which are not permitted to be sold. Accordingly, the GoI reimburses inventory carrying costs, including the finance cost incurred on the buffer stocks. During the year, the Company has received higher buffer stock interest subsidy of ₹28.48 crore ( ₹11.23 crore last year). Further, average cost of funds has reduced by 156 basis points during the year on account of availment soft loans of ₹396.93 crore with interest subvention for payment of cane price and for setting additional distillery capacity as well as due to decline in applicable interest rates.

The Company has decided not to opt for lower tax rate as provided under Section 115BAA of the Income Tax Act considering the various benefits that would be lost as a result thereof. Tax charge during the year includes reversal of an amount of ₹40.59 crore as a result of re-measurement of deferred tax liabilities (net) as on March 31, 2020, taking into consideration net deferred tax liabilities expected to be reversed after the Company opts for lower tax rates after utilising all available benefits under old tax regime.

Raw Material Costs have increased by 9% commensurate with the increase in sugarcane crush by 9% and 17% increase in the turnover of the engineering businesses. However, the raw material % to sales is not very indicative for sugar business as it is directly linked to the production of sugar and not sale of sugar.

Despite higher turnover by 40%, Manufacturing expenses have reduced by 5%. In sugar business (including distillery), such costs are directly linked to the production undertaken rather than to the sales. The savings in manufacturing costs is due to low costs associated with manufacture of raw sugar which formed 24% of the total sugar production and reduced civil work quantum in the projects executed by Water Business.

The increase in personnel cost is due to additional manpower recruited for the new distillery commissioned during the year and due to annual salary increase. The increase in Administrative expenses is on account of increased activity, including operations of a new distillery. Selling expenses have increased due to transportation cost incurred for the export of sugar, majorly on FOR basis.

The Company has two major business segments - Sugar business and Engineering business. Sugar business comprises sugar manufacturing operations across seven Sugar mills, three incidental cogeneration facilities at three of its sugar mills, three Co-generation plants located at two of its Sugar mills and two Distillery units (including a newly established distillery), all located in the State of U.P. During the current financial year, a new 160 KLPD distillery adjacent to an existing sugar unit at Sabitgarh became operational in April 2019. Co-generation plants and Distillery units source captive raw materials, namely, bagasse and molasses, from the sugar mills. Engineering business comprises Gears manufacturing at Mysuru and Water and Waste Water Treatment business operating from Noida, UP and having projects all over the country.

Sugar Operations

The operational efficiencies and the productivity of the sugar operations, in terms of sugar recovery & cane crushing, have further improved during the year.

Much improved PBIT during FY 20 is attributed to higher sales volume by 41%. Profitability of FY 20 also includes export related and buffer stock subsidies of ₹100.5 crore pertaining to last year booked during the current year after fulfilment of the prescribed conditions, and subsidies of ₹57.66 crore relating to current year could not be recognised in view of non-fulfilment of the prescribed conditions and the same will be recognised subsequently on completion/fulfilment of relevant conditions.

Co-generation Business

The profitability in the Co-generation business is lower than previous year as UPERC has reduced power tariff by approx. 40% effective April 1, 2019. Further, the power exported during the current financial year is lower due to increased requirements of sugar operations, frequent rains and consequent need to optimise bagasse utilisation.

Distillery Business

The current year includes operations of a new 160 KLPD distillery commissioned in the first quarter as a result of which capacity of the Company has doubled to 320 KLPD from 160 KLPD earlier. The company has also set up an incineration boiler at its existing distillery for ensuing zero liquid discharge.

Due to increase in capacity, the production and turnover has increased substantially during the current year. Sales volumes in March 2020 were impacted on account of COVID-19. Lower PBIT during the year is mainly on account of abnormally lower raw material (molasses) prices last year, which have increased substantially during the year based on market dynamics. The Company has for the first time produced B-heavy molasses at three of its sugar units for the production of Ethanol. It has helped the Company in optimum utilisation of distillation capacity as well to capture higher ethanol prices as applicable to ethanol produced from B-heavy molasses.

Average realisation price has improved by 11% as the Ethanol produced from B-heavy molasses fetches higher prices - ₹54.27/ litre as against ₹43.75/litre for Ethanol derived out of C-heavy Molasses.

Gears Business

The Gear business has performed well, both in terms of turnover and profitability. The business operations were impacted in March 2020 due to Covid-19. The Company is exploring new products, geographies and actively engaged with the Defence Sector to tap business opportunities for further growth and diversification.

The total order book at the year end, executable in FY 21, is at ₹93.81 crore as against ₹101.28 crore as on March 31, 2019. Gears Business would also be carrying long tenure orders of ₹58.15 crore which will be executed after FY 21.

Water and Wastewater Treatment Business

The consolidated results include financial results of a wholly owned subsidiary, Mathura Wastewater Management Private Limited (MWMPL), which is engaged in the execution of a project awarded by National Mission of Clean Ganga (NMCG) under Namami Gange programme for the city of Mathura, UP.

The improved performance of water business during the current year, both in terms of turnover and profitability, is due to higher intake of orders received in FY 19. The business operations were impacted in March 2020 due to COVID-19.

During the year, orders of only ₹39.29 crore were received by the Company. The Company has participated in large number of projects in pipeline, the finalisation of several projects were delayed due to various disruptions during the year. Orders in hand at the year-end are at ₹995.32 crore (including long-term O&M contracts of ₹482.88 crore).

Review of Balance Sheet

Major changes in the Balance Sheet items are explained as hereunder:

Property plant and equipment

During the year, there have been additions to the extent of ₹297.06 crore. These mainly include capitalisation of a new 160 KLPD distillery for ₹155.96 crore, incineration boiler project at existing distillery for ₹59.03 crore, construction of additional molasses tanks fort ₹14.84 crore and other CAPEX incurred for smooth operation of the business.

Capital work-in-progress

The Capital work-in-progress of ₹26.16 crore mainly includes assets under installation at the Muzaffarnagar distillery and sugar units at Sabitgarh & Chandanpur.

Right of Use (ROU) Assets

The Company has during the year adopted new Ind AS 116 "Leases" nd applied the same to lease contracts existing as at April 1, 2019 using the cumulative effect method and accordingly, recognised ROU assets of ₹25.67 crore as on the transition date i.e. April 1, 2019. Written down value of ROU assets as on March 31, 2020 is ₹19.61 crore.

Investments in subsidiaries and Associates

Investments are higher at ₹69.77 crore as on March 31, 2020 as compared to ₹49.87 crore as on March 31, 2019, mainly due to investment of ₹19.90 crore in the equity share capital of wholly-owned subsidiaries for their respective businesses, including ₹13.50 crore in MWMPL.

Income Tax Assets (net)

The income tax assets (net) represents amount receivable upon completion of the assessment and against various appeals decided in favour of the Company, the refund procedures of which are in progress. During the year, refunds of ₹7.62 crore were received.


Inventories are lower by 10% at ₹1912.13 crore as on March 31, 2020 against ₹2118.66 crore as on March 31, 2019 due to 15% lower sugar inventories held in quantitative terms. Reduced inventory levels are a result of higher sugar sales volumes by 41% helped by substantial exports and diversion of sugar in the production of B-heavy molasses.

Trade Receivables

Trade receivables are higher at ₹295.32 crore as on March 31, 2020 from ₹237.97 crore as on March 31, 2019. Water Business and Distillery operations have higher receivables due to increased business activity.

Other Current Assets

It has increased from ₹191.44 crore as on March 31, 2019 to ₹437.51 crore as on March 31, 2020, mainly due to amount of ₹235.14 crore (Previous year - ₹6.93 crore) receivable from the Government towards grant / subsidies relating to exports, buffer stock and subvention of interest.

Share Capital

The Company had during the year successfully completed buyback of 1 crore fully paid up equity shares and the share capital has reduced correspondingly.

Other Equity

During the year, the reserves and surplus increased by ₹193.37 crore (18%) to ₹1245.86 crore due to profit earned during the year and transferred to Retained Earnings, as reduced by premium paid on buyback of shares and interim dividend paid.


Total long-term borrowings at the year-end, including current maturities of long-term borrowings, are at ₹614.72 crore as against ₹490.49 crore as at the end of the previous year. During the year, term loans of ₹211.93 crore were availed and repayments were made to the extent of ₹87.70 crore. Term loans of ₹610.75 crore are at concessional interest rate or carry substantial interest subvention.

Other Non-Current Liabilities

Other Non-Current Liabilities are lower at ₹18.22 crore as on March 31, 2020 as against ₹29.47 crore as on March 31, 2019 mainly due to utilisation of deferred grant in respect of concessional term loans.


Short-term borrowings are lower at ₹943.44 crore as on March 31, 2020 as againstt ₹1235.41 crore as on March 31, 2019. The utilisation is lower due to better working capital management resulting in lower sugar inventory held at the yearend as well as surplus funds parked in the cash credit account.

Trade Payables

Trade payables are higher at ₹756.40 crore as on March 31, 2020 as against ₹637.61 crore as on March 31, 2019 due to increased business activity.

Other Financial liabilities

Other Financial liabilities are higher at ₹200.79 crore as on March 31, 2020 as against ₹126.09 crore as on March 31, 2019. The increase is mainly owing to increase in current maturities of long-term loans by ₹67.62 crore.

Other Current liabilities

Other Current liabilities are higher at ₹153.56 crore as on March 31, 2020 as against ₹135.44 crore as on March 31, 2019. The increase is primarily due to higher liabilities towards customers under construction contracts of Water Business on account of initial higher billing.