Page 75 - BCML AR 2019-20

Overview Functions y yeviewing and identifying risk in other
R
BCML continues to strengthen its The Risk Management Committee emerging areas
comprehensive system to promptly performed the following functions: Implementation
identify risks, assess their materiality and y ySupervising, guiding, reviewing and The Company’s Board-approved Risk
take measures to minimise their likelihood identifying current and emerging risks; Management Policy comprised material
and losses in FY20 as well.
y yDeveloping risk assessment and risks faced by the Company that were
Risk management was applied across all measurement systems; identified and assessed. The Company set
management levels and functional areas. y yEstablishing policies, practices and up a policy framework for ensuring better
Risk management roles were distributed other control mechanism to manage risks; management of its asset & liability profile.
across the Board of Directors, Audit
R
Committee of the Board of Directors. y yeporting results of risk to the Board;
and

Key risks and their mitigation

Demand risk Climatic risk

Reduced product off-take could affect business Excessive, deficient or untimely rain and other advesre
sustainability agro climatic conditions could affect the quality and
quantity of sugar cane
Risk mitigation Risk mitigation
I
y yndia continues to be second largest sugar producer; y yhe Company’s manufacturing facilities are located
T
it is also the largest consumer of sugar in the world. in the natural sugar cane producing region, which
Sugar consumption is increasing year-by-year, albeit at a also possesses relatively better irrigation infrastructure
nominal rate, due to country’s demographic advantage. compared to Western/ Southern India.
y yndia’s per capita consumption of sugar is lower than y yhe cane development team of the Company actively
I
T
the global average, which leaves headroom for growth. monitors the planting/growth of sugarcane and disease
y yhe Central Government intends to raise ethanol infestation programme so that timely action can be
T
blending in petrol to 20% by 2030, generating adequate taken to avoid or minimise damage.
demand for ethanol.
y yower is sold to the State grid under a long-term PPA.
P

Business cyclicality risk Technological obsolescence
The Company’s performance may be affected by an over Inefficient processes can lead to cost overruns
dependence on a particular verticaL

Risk mitigation Risk mitigation
T
T
y yhe Company’s robust integrated business model of y yhe Company has been proactive in making
utilising by-products for the production of power and investments in the latest technology. It has the
ethanol reduces the impact of cyclicality. latest plants and follows best possible agri-practises;
y yWith continuous augmentation of capacity in it maintains plants in a good condition through
distillery and co-generation capacity, the proportion of continuous upgradation.
revenues from these two segments is showing signs of
improvement.

Annual Report 2019-20 | 73