Risk mitigation y The Company’s robust integrated business model of utilising by-products for the

production of power and ethanol reduces the impact of cyclicality. y With continuous augmentation
of capacity in distillery and co-generation capacity, the proportion of revenues from these two
segments is showing signs of improvement. Annual Report 2019-20 | 73 Regulatory & government
intervention risk Business operations may be affected on account of excessive government
intervention Risk mitigation y In the last couple of years, the Government has taken numerous
rational decisions whether related to the fixation of cane price or with respect to the management
of demand and supply of sugar in the country. In other words, the Government’s interventions in the
last couple of years have been positive. A favorable Government Policy in ethanol blending insulates
the Company against adverse price realisations. Finance risk A stretched Balance Sheet could affect
business sustainability Risk mitigation y The Company follows a judicious policy on mix of equity and
debt. y The Company’s gearing as on 31st March 2020 was among the lowest in the industry. Other
financial and liquidity ratios were at a healthy level. Cost risk Increasing cane prices and input costs
could affect profitability Risk mitigation y To moderate the impact of cane cost, the Company is
working on the improvement of cane varieties which would generate higher yield to farmers and
millers. y The Company diversified into the distillery and cogeneration business to broad-base the
revenue base and minimise the impact of input cost increase in sugarcane.