Page 72 - BCML AR 2019-20

SWOT analysis of the

Indian sugar industry

Strengths Weaknesses
 Sugar cane is among the most profitable cash crops in India  High raw material supply in the

 India is the second-largest sugar producer and the largest sugar consumer in the world industry causes high cane arrears
for farmers
 Sugar industry supports downstream sectors and a large Indian rural ecosystem  The industry uses outdated
 The Indian sugar industry provides direct employment (including ancillary activities) to ~0.5 technology
million workers

Opportunities Threat
 India’s per capita sugar consumption at 19.6 kilograms is lower than global average of 22.6  The sector is often impacted by

kilograms a political agenda
 Better farm practices can significantly increase yield and recovery  Lack of infrastructure often
 Mandatory ethanol blending program of the government driving ethanol offtake makes cane farming dependent
on climatic vagaries
 Technology upgradation can result in superior byproduct utilisation

Financial review

Capital structure Reserve on account of buy-back. Reserves 2019. During the year under review,
The equity share capital of the Company on account of storage fund for molasses the Company repaid B6,009.62 lacs and
stood at B2,200.00 lacs as on 31st March, increased from B39.85 lacs to B87.19 lacs availed fresh loans of B13024.00 lacs
2020 (22,00,00,000 equity shares of B1 on account of fresh reserves created under the Central Government Scheme
each) compared to B2,284.38 lacs as on during the year as per the requirement. for extending financial assistance to sugar
31st March, 2019 (22,84,38,327 equity Further, B20000.00 lacs was transferred mills for enhancement and augmentation
share of B1 each). During the year, the from Retained Earnings to General of ethanol production capacity.
Company completed a buyback of Reserve. Working capital borrowings reduced by
84,38,327 equity shares. Free reserves (excluding amalgamation 24.09% from B1,39,466.24 lacs as on 31st

Other equity reserve of B4224.23 lacs) of the Company March, 2019 to B1,05,869.20 lacs as on 31st
March, 2020 owing to the liquidation of
stood at B2,26,549.68 lacs as on 31st
Other equity of the Company increased March, 2020 accounting for 96.47% of the stock and realisation of debtors.
by 14.01% from B2,05,985.50 lacs as on total reserves.
31st March, 2019 to B2,34,841.16 lacs as Capital employed
on 31st March, 2020. This was mainly on Debt profile The capital employed by the Company in
account of profit retention during the year Total long-term borrowings, including the business increased marginally from
after paying off dividend and for buy- current maturities, stood at B44,829.67 B3,80,011.23 lacs as on 31st March, 2019
back of equity shares. During the year, the lacs as on 31st March, 2020, compared to B3,82,423.59 lacs as on 31st March,
Company transferred B84.38 lacs from the to B37574.92 lacs as on 31st March,
Securities Premium to Capital Redemption

70 | Balrampur Chini Mills Limited