Enriching Energising Lives & Iv E.I.D.-Parry (India) Limited

Enriching Energising & Lives E.I.D. - PARRY (INDIA) LIMITED ANNUAL REPORT 2016-17 Contents Corporate Overview Enriching & Energising Lives i Corporate Information 01 Financial Highlights 02 Management Reports Notice 03 Boards’ Report 13 Management Discussion & Analysis 45 Corporate Governance Report 57 Business Responsibility Report 75 Financial Statements Standalone Financial Statements 92 Consolidated Financial Statements 163 Cautionary Statement Certain statements in this annual report concerning our future growth prospects are forward-looking statements, which involve a number of the risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. We have tried wherever possible to identify such statements by using words such as anticipate, estimate, expect, project, intend, plan, believe and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise or should underlying assumptions prove inaccurate, our actual result could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Enriching Energising & Lives We believe if we are passionate about our purpose, we can create a better World, make a difference to the lives of people we touch and build a sustainable, profitable business. Working with nature for two centuries and more, our core purpose is based on one important learning, to sustain - energise, to grow - enrich. In each of our three businesses, ie. Sugar, Bio Pesticides and Nutraceuticals we have undertaken many pioneering initiatives and have constantly shared our learnings to energise and enrich millions of lives that we have touched across the value chain. Our nature centric business model reflects an abiding commitment to the empowerment and enrichment of the rural communities we operate in. Our products, processes and technology initiatives are driven by our core purpose of energising and enriching lives with value added products from agriculture for our customers and the environment in which we operate. Our people practices of empowerment and capability development, is based on the key premise of enriching and energising our people, one of our most valued assets. 2016-17 - as we managed one of the worst drought hit years in a century, we expanded capacities, innovated with new products, increased efficiencies, bettered our employee engagement rankings, entered into new markets, invested in research and development for creating a pipeline of new products and recorded one of the best years in performance. And more than ever, we reaffirmed our core purpose of Enriching & Energising Lives. ii E.I.D.-Parry (India) Limited Working with more than one lakh farmers and promoting progressive farming practices, at EID Parry, enriching and energising the agrarian communities and the rural landscape is an integral part of our vision. As the first sugar manufacturer in India and among Trichogramma, which will help in pest the oldest in the world, we have pioneered many management. progressive and innovative farming practices and partnered with farmers in setting new benchmarks • New initiatives to reduce cost of cultivation in the Industry. to farmers by use of single bud seed multiplied through tissue culture Nurseries. Continuing this tradition, some of the important A very important initiative, this will initiatives undertaken in 2016-17 were : be scaled up in coming years. • To improve the sugar recovery for the • Wider row planting to facilitate mechanised company and yield for the farmers, many harvesting and inter-cropping to increase new varietals were planted by farmers across yield and income for farmers. our command area depending on soil, agro climate, amenability for mechanical harvesting, • Farmers at Haliyal and Nellikuppam certified drought tolerance, resistance to certain pests / for sustainable sugarcane practices. These diseases. farmers will benefit through improved safety and agronomy practices, ultimately leading • Farmers encouraged to become entrepreneurs to higher output. for production of bio control agents like E.I.D.- Parry (India) Limited iii • Soil fertiliser maps developed at Haliyal and Sankili. Guidance provided to farmers on fertiliser status and recommendations on fertiliser usage. • Work commenced on measuring water and carbon footprint, an initiative that will benefit both the farming community and the environment in the long term. • Extensive training to farmers on yield improvement, better farm management and optimum utilisation of resources like water, fertiliser and labour. • Implementation of a more robust and improved common cane management system across all factories with integrated data analytics and online tracking, with real time field updates for timely support and guidance. • Commencement of project work for Cooperative farming in Bagalkot command area. • De-silting of ponds in identified areas. Parry believes that enriching and energising the farming community is critical since the fortunes of the Company and the farmers are completely interlinked. These initiatives have been on-going for decades and the journey continues... Enriching Energising Lives & iv E.I.D.-Parry (India) Limited In line with our vision of enriching and energising lives, our product, process and technology initiatives are centred on value creation and enriching all stakeholders. Our fully integrated Sugar Plants with cogeneration and dedicated distilleries continue to set new benchmarks in operational efficiencies and adhere to the highest standards in Health, Safety, Quality and Environment. The Total Productive Maintenance (TPM) model of employee empowerment and ownership, adopted by our manufacturing plants is centred on work practices that promote ‘zero accidents, zero machine breakdowns and zero losses’. ‘Reduce, recycle and reuse’ is our operating principle, to optimise operational efficiencies, eliminate process losses and achieve continuous reduction in water, energy and fuel consumption. We have achieved zero fresh water drawal from ground, river and canal through efficient Water Management systems. We have achieved near zero levels in effluent generation at our Sugar Plants with stringent online monitoring systems. Our advanced recycling processes have enabled conversion of effluents into Plant Nutrients. The potash rich fertilizers and the press mud from the Sugar Plants are sold to farmers for application in their fields for enriching the soil. This initiative has earned us two Awards for the ‘Most Innovative Environmental Project’ and ‘Most Useful Environmental Project’ in a Nation -wide Competition conducted by CII, across Industries. E.I.D.- Parry (India) Limited v Three of our Manufacturing Plants at Nellikuppam, Haliyal and Pugalur are certified by Bonsucro for sustainable sugar production. Our focus on energy conservation through use of direct contact heaters, wide gap plate heat exchangers, bagasse dryer system technology and saturated steam turbine, besides many other initiatives, has made the Sugar and the Cogen factories the best in its class, in the Industry. Our focussed quality improvement initiatives have enabled us to benchmark with the best-in-class and meet the stringent requirements of our customers, including major Pharmaceutical Manufacturers. The Cogenerated power from bagasse is green energy, used for both captive consumption and for sale to the State Grids. Over 5% of Ethanol, the green fuel of the future, blended with petrol in Southern India is supplied by the Company. Manufacturing processes, technology practices and customer-centric product developments are all centred on our core purpose of enriching and energising lives and the environment in which we operate. Enriching Energising Lives & vi E.I.D.-Parry (India) Limited For us sugar making is not just a commodity production but a serious science that mandates great expertise and a greater commitment towards enriching and energising lives. Our preferred vendor ranking with a wide spectrum of institutional customers across 15 States and 12 Sectors, including food, beverages, confectionery and pharmaceutical companies is a validation of our core strength to manufacture customised sugar to stringent specifications in quality, size, colour and structure. With upgradation of our refinery this year, we now have the expertise to make ‘infant-safe’ sugar that is certified for ‘zero bacteria’, ‘zero mould’ and ‘zero yeast’ and is used by pharmaceutical companies for their various products including infant food and critical intravenous applications. The focus during the year in the institutional segment was on product differentiation and value addition, allied with certifications, quality, service and key account management. In the retail segment, Amrit, the Company’s brand of ‘natural brown sugar’ with 6 vital minerals and 10 times more nutrients than normal sugar and the ‘Vita’ brand of Vitamin A fortified sugar, expanded shelf space addressing the growing demand from discerning, health conscious customers. E.I.D.- Parry (India) Limited vii Enriching Energising &

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