This action might not be possible to undo. Are you sure you want to continue?
Mr. Dhruv M. Sawhney, Chairman & Managing Director graduated with a Masters in Mechanical Sciences from Emmanuel College, University of Cambridge, U.K. and M.B.A with distinction from the Wharton School, University of Pennsylvania, U.S.A. He was on the Dean's list for all terms, came second in the University, and is a life member of Beta Gama Sigma. Mr. Sawhney has received the highest civilian award "Chevalier de la Legion d'Honneur" from President Chirac of the French Republic.
Mr. Sawhney is a Past President of the Confederation of Indian Industry (CII), the Indian Sugar Mills Association and the Sugar Technologists Association of India. He was the first Chairman from the developing world of the International Society of Sugar Cane Technologists. Mr. Sawhney has served on the Board of various public sector organizations and chaired Government advisory councils on Industry, Energy and Sugar. He chairs the Commonwealth Leadership Development Conferences founded by HRH Prince Philip, The Duke of Edinburgh in 1956 to foster and broaden the understanding and decision-making ability of individuals in the commonwealth countries. Mr Sawhney is Deputy Chairman of the Evian Group and Chairman of the India Steering Committee of the World Economic Forum, Switzerland. He also chairs CII's International and Internal Audit Committees.
Mr. Sawhney takes a keen interest in education, and was a past Governor of the Indian Institute of Management, Lucknow, the Management Institute at the University of Delhi and Chairman of the Doon School, Dehra Dun, one of India's most famous Public Schools. He is a Companion Member of the Chartered Institute of Management, U.K. and chairs the Board of Trustees of
Delhi's oldest private charitable hospital. He was President of the All India Chess Federation for 12 years.
TRIVENI NGINEERING AND INDUSTRIES LIMITED
Particulars Sales (Gross) Sales (Net) Operating Profit ( EBIDTA) Interest and Financial Charges Depreciation and amortization Profit before tax (PBT) Tax liability- Normal - Net deferred tax charges Profit after tax (PAT) Surplus brought forward Available for appropriation APPROPRITATIONS Provision for Dividend (included dividend distribution tax) Equity Preference Transfers to molasses reserves Transfer to capital redemption reserves Transfer to general reserves Surplus carried forwarded Earning per equity share of Re. 1 each (in Rs.) 2005-06 12702.96 11920.37 2130.00 229.96 288.25 1611.79 165.32 131.51 1314.96 82.40 1397.36 2008-09 10212.92 9610.50 1724.46 304.67 178.73 1241.06 235.29 10.57 995.20 44.55 1039.75 % Increase 24.38 24.04 23.52 (24.52) 61.29 29.87 32.13
147.54 1.27 19.87 1150.00 78.68 5.88
93.95 2.70 0.83 19.87 840.00 82.40 4.77
During the year under review, the company reported a record performance across the following parameters: • • Net sales increased 24.04 % to Rs 11920.37 million. Profit after tax increased 32.13 % to Rs 1314.96 million.
There was a remarkable growth in turnover in all the engineering units accompanied by an attractive increase in their respective margins. The company is optimistic of a similar or higher growth in turnover and profit of all businesses in Financial Year 2006-07.
Divisionwise breakup of total external sales (%)
Sl. No. 01. Name and Address of Stock Exchange Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Fort 02. Mumbai – 400023 National Stock Exchange of India Ltd. Exchange Plaza, 5th Floor, Plot no c/1, G block, Bandera (E), Mumbai - 400051 TRIVENI Stock Code 532356
Enhancing shareholders value:
The Triveni public issue: The shares of Triveni Engineering & industries Limited are listed
on the Bombay stock Exchange and National stock Exchange, the major stock exchange of India. The company issued 50 million equity shares in November 2005 and the issue was oversubscribed more then ten times reflecting investor confidence. The equity shares of RS. 1 each were issued through a book building process within a price range of Rs. 42.50. While 97% of the demand was for shares in the upper band, the company prudently fixed the issue price at Rs. 48 in general investor interest. Consequent to this issue, the equity shares of the company were listed on NSE and BSE on 13 December 2005. As on 31 March 2006, reputed institutional investors including mutual funds, foreign institutional investors and domastic banks held 21.53% of the company’s shareholding. The closing price of Triveni share at NSE on 31 March 2006 was Rs. 125.95, impaling a market capitalisation of Rs.32480 million. The company has increased the limit of investment by FIIs to 49%, which will enable more international investors to participate in its growth story.
At Triveni, our principal achievement is that we started with one business, but leverage our engineering knowledge to extend into four other growing and profitable business.
SUGAR BUSINESS GROUP (SBG)
• • 13% increase in turnover from Rs. 7676.07 million in 2008-09 to Rs. 8663.25 million. Recovery of the Deoband sugar unit of the highest in Western UP during the 2005-06 sugar seasons. • • 60% increase in sugar capacity from TCD in 2008-09 to 40500 TCD. Commissioning of the 7000 TCD Greenfield sugar unit in Sabitgarh in January 2006.
• Sugar prices are expected to stay firm for the next two years on account of domestic demand and supply, high crude price influencing higher ethanol production as well as due to other international factors. • The company will expend capacity from 40500 TCD to 61000 TCD in 2006-07
It will commission three Greenfield units in Chandanpur (6000 TCD) and Rani Nagal (5500 TCD) by the start of the 2006-07 sugar season; the third plant in Narainpur (6000 TCD) will be completed in the fourth quarter of 2006-07; capacity expansion of the Ramkola sugar unit from 3500 TCD to 6500 TCD will be complete by the start of the 2006-07 sugar season.
The company is setting up a captive 160 KLPD distillery for ethanol production that will be commissioned in the fourth quarter of 2006-07.
The company achieved 7% higher crushed in 2005-06, a good performance as it competed successfully with producers of alternative sweeteners to reduce cane diversion and increase drawal of sugarcane. Further, the company produces Rs. 0.38 million tones of White sugar in 2005-06. Due to late rains, winter frodt and overfertilisation, the sugar recovereries in Western UP were lower by around 0.6-0.7% than what had been achieved in 2008-09. Averages recover for our sugar units declined from 10.08% in 2008-09 to 9.59% in 2005-06 due to the aforesaid. It is to the company’s credit that despite poor weather, the Deoband units reported one of the highest recoveries among all Western UP sugar factories during the season under review.
In Sugar Division area during the down turn, they invested in the modernization of the sugar units to achieve benefits which are fully under their control and invested additionally in the cogeneration plant to insulate themself from the sugar cycle, developing an alternative stable revenue stream. Besides they invested in state-of-the-art vacuum pans in a joint collaboration with sugar research international of Australia. The result of these initiatives is that when the industry turned around, Triveni was in the right place at the right time with the right capacity and the right efficiencies.
The government did not permit the import of white sugar during the last two years even when a shortage was evident, but quite pragmatically allowed the import of raw sugar under an advance License scheme with corresponding export obligations. Considering all the factors and as described in detail in the Management Discussion and Analysis, the sugar outlook appears stable till 2007. The Khatauli sugar unit is being modernized and expanded to 16000 tcd and they are planning to setup three new units, one of which will be set up at Sabitgarh, district Bulundshahar, UP. All these units would have capacity of 5000-7000 tcd, expandable to 12000tcd. As a result, they expect their sugarcane crushing capacity to significantly rise over our current base of 25250 tcd.
THE BRANDED SUGAR (SHAGUN)
The Company’s branded sugar is manufactured in ‘Khatauli’ and marketed under the Shagun Brand. The company announced this sugar in 26 September 2003.the branded sugar provides in 1-5 KG.packets. During the year under review, the off take of Branded sugar increased by 44 % to 6522 MT. While the market of branded sugar is not large, demand is increasing due to increased urbanization and life style changes.And the branded sugar of Triveni Shagun is packaged in a state-of-the-art sugar packaging section located in the sugar factory premises. The sugar packaging section is considered to be the best designed sugar packaging sections amongst all the players in branded sugar business in India.
THE COGENERATION GROUP (CBG)
Cogen plant at Khatauli was one of the quickest commissioning schedules for cogeneration plants in India.
Plant: Khatauli and Deoband Bagasse-based cogeneration power is a renewable, friendly sustainable
enviournmant driver of
development. The government of India has issued the national electricity policy, which calls for the promotion of cogeneration and generation from renewable Sources of energy.
• 222% increased in the division’s revenue from Rs. 188.03 million in 2004-2005 to Rs. 605.5 million. • • 304% increased in EBIDTA from Rs. 58.6 million in 2004-2005 to Rs. 237 million. Commissioning of new 23 MW co-generation plant in Khatauli reported PLF of over 98% in March 2006. • 92% plant load factor for the Deoband unit across 207 days of working (99% and 100% PLF in February and March 2006 respectively). • Power purchase agreement with Utter Pradesh Power Corporation Ltd. (UPPCL), the buyer for the power supplied to the grid; timely payments from UPPCL for the power supplied.
Triveni’s co-generation units
State of the art, bagasse-based co-generation unit with a capacity of 22 MW. • The company captivity consumed 31 % of the electricity produced by this plant and the rest was supplied to the Utter Pradesh power corporation Limited, secured by a ten-year power purchase agreement. • Plant operated at an average plant load factor of 92% for the 207 days it was operational in 2005-06; PLF could have been higher but for fuel shortage during the start of the sugar season and high grid disturbances in January 2006. Plant achieved 99 % and 100 % PLF in February 2006 and March 2006 respectively.
State of the art and energy efficient, bagaees-based 23 MW cogeneration power plant (commenced operation during 2005-06-sugar season). • The company captivity consumed 25 % of the electricity produced by this plant and the rest was supplied to the Utter Pradesh Power Corporation Limited, secured through a 10- year power purchase agreement. • One of the quickest commissioning schedules for co-generations plant in India. Commenced the export of power in October 2005. After an initial period of stabilization, the cogen plant has achieved full capacity; PLF was over 98 % for March 2006. • Additionally utilizes continuous Electro de-ionization (CEDI) process in its Boiler feed water system (installed through the company’s water business Group) with the objective to rationalize bulk acid and alkali handling as well as improve water quality. This is the largest CEDI-based water treatment module in India and the first in a power plant in the country.
THE ENGINEERING BUSINESSES
GDP growth increased from 6.9% in 2004-2005 to 8.1% in 2005-2006, driven by the manufacturing and power sector. The index of industrial production for February 2006 rose to 227.3, up 8.8% against the corresponding month of the previous year. According to figures available, the IIP for mining, manufacturing and electricity sectors stood at 153.9, 242.3 and 186 respectively in February 2006 against 152.5, 221.3 and 170.7 in February 2005. The cumulative growth during April- February 2005-2006 in these three sectors was 0.5%, 9% and 5.3% respectively.
Power sector (including IPP and co-generation units)
• India consumes almost 3% of the world’s commercial energy and is the sixth largest consumer of energy in the World. During 2005, the recorded energy requirement was 626 billion units whereas energy available was only 546 billion units, reflecting a shortage of 80 billion units (13%).
• It is estimated that a capacity addition 100000 MW will be required by 2012 to bridge the supply deficit. Electricity generation will have to grow at a minimum of 10% per annum in order to support the targeted industrials and economic growth. The government expects to bring around 5000 MW of electricity (2008) to the grid through the captive generation route to supplement capacity addition. • Out of the country’s installed captive power generation of 18740 MW, steam generation power accounted for 46%, followed by diesel-based power generation. •
TURBINE BUSINESS GROUP (TBG)
The contribution of the division to the company’s revenue increased from 16.9% in 2004-2005 to 22.6% in 20052006
Turnover: Plant: Rs. 1.75 bn uvyfvhfyshcc gdftrth Bangalor
The turbine business unit was commissioned as a backward integration of the company’s sugar buysiness.it is one of the largest manufactures of 1-12 MW steam turbine in the world with a 68% market share in India’s high and low pressure turbine upto 18 MW.
• 71% increase in top line from Rs. 1626.4 million in 2004-2005 to Rs. 2779.9 million; 226% increased in divisional profit from Rs. 114.3 million in 2008-09 to Rs. 373.1 million. • • • More than 500 basis point increased in EBIDTA margin from 11.1% in 2008-09 to 16.2%. Current order book of Rs. 4.44 billion (159% of the division’s turnover in 2005-06). Capacity increased from 300 MW in 2008-09 to 650 MW in 2005-06 in record time.
• • The company will expand its capacity by 70% effective from fourth quarter 2006-07. Sales are expected to increase to over Rs. 5 billion in 2006-07, based on the strong domestic demand and exports.
Increased exports to Europe and Asia, riding on the company’s worldclass technology, low production cost and committed service. TBG exports are expected to increase to 20% of turnover in two years.
The company’s turbine division posted an increase of 71% in its turnover from Rs.2779.9 million in 2005-06. During the year under review, the division’s performance in terms of supply of turbines, increased from 228 MW in 2008-09 to 425 MW in 2005-06 on account of a growing power sector (co-generation and IPP) and growth in user industries (sugar, cement, paper, pharmaceuticals and textiles etc.). The contribution of the division to the company’s revenue increased from 16.9% in 2008-09 to 22.6% in 2005-06, indicating its growing importance.
GEAR BUSINESS GROUP (GBG)
During 20052006, 51% of the GBG’s sales comprised product upto 7.5 MW, the rest above 7.5 MW.
Rs. 275.5 bn Mysore, Karnataka
The company’s gears division was started in 1976 to manufacture gears and gears boxes for the turbine business group.competitiveness of this business has been reinforced through a technology license agreement with Lufkin, the world leader in high speed gears.
• • • 89% increase in divisional revenue from Rs 238.8 million in 2004-2005 to Rs 450.3 million. Increase in EBIDTA margin from 15.24% in 2008-09 to 20.85%. Increased share of income from replacement activities from 25% of the total revenue in 20042005 to 28% of the total revenue. • Manufacture of gear internals in the 15-25 MW segment under the terms of the new license agreement. • Manufacture of several 50000 rpm speed gearboxes for ISRO for onward use in testing of cryogenic engine pumps for satellites. • Emergence as the first company in India to manufacture a 36 MWhigh speed gearbox.
• The company expects to enhance its presence in product segments like hydel gears and provide high end technical solution in the low speed gearboxes segment. • Its expects to diversify its customer base, de-risking from cyclicality in any particular industry. • Future growth of 30-35% expected in 2006-2007.
The company’s gear division posted an 89% increase in divisional revenue from Rs. 238.8 million in 2008-09 to Rs. 450.3 million in 2005-06 and also EBIDTA margins improved from 15% in 2008-09 to 21% in 2005-06. It was protected from price increases in raw material due to long term fixed price supply agreement with vendors. Besides, the company streamlined its manufacturing and supply-chain process, rationalizing overheads and production costs.
WATER BUSINESS GROUP (WBG)
Water business group posted a 69% increase in revenues from Rs. 81.60 million in 21004-05 to Rs. 138.1 million in 2005-06
Rs. 81.5 mn Noida
The company entered the business of water and waste-water treatment in 1984 as a turnkey manufacture. The division was restructured in 2003 to manufacture and package equipment aligned with its other engineering businesses.
• The division’s revenue increased 69% from Rs. 81.6 million in 2004-2005 to Rs. 138.1 million. • • EBIDTA increased 317% from Rs. 5.4 million in 2004-2005 to Rs. 22.5 million in 2005-2006. EBIDTA margin strengthened from 6.6% in 2008-09 to 16.3% in 2005-06, reflecting the impact of cost reduction. • • The WBG exported components like the clarifier drive head to Envirex. The unit has currently an order book of Rs. 130 million, which is an increase of over 140% over the order book as on March 31, 2005.
• The division’s proposed Rs. 150 million expansion will comprise the setting up an office and workshop for the WBG.
Following this expansion, the company will initiate the manufacture of critical components, reducing its dependence on the capacity of subcontractors and enhancing cost efficiency.
The WBG exports three-digit growth in its top and bottom line in 2006-2007.
The company’s WBG posted a 69% increase in revenues from Rs. 81.60 million in 2008-09 to Rs. 138.1 million in 2005-06. The division’s EBIDTA increased 317% from Rs. 5.4 million in 200809 to Rs. 22.5 million in 2005-06.the highlights of the year’s performance comprised: • • A focus on team building; an increase in manpower from 45 on 31.03.05 to 56 on 31.03.06. Successful commissioning of a double pass reserve osmosis system with a CEDI polishing stage, as well as pilot for wastewater reuse system using the advance Memcor technology.
TRIVENI KHUSHALI BAZAAR
Triveni Khushali Bazaar is a one stop shop farmers and rural customers where they can buy agri-input, cattle feed, cycle, plastic furniture, FMCG, automobiles, building material and petroleum products.
Turnover: Presence: Ghatain
Rs. 12.4 mn Khatauli, Deoband & franchise store in Sisuali, Jansath &
OVERVIEW Triveni leveraged its rural presence with a Triveni leveraged its rural presence with a synergic diversification into agri-retail through the commissioning of branded stores called Triveni Khushali Bazaar. It is a one-stop shop for farmers and rural customers where they can buy agriinputs like seeds, fertilizers, pesticides; cattle feed, cycle, plastic furniture and FMCG;
automobiles like tractors and bikes; cement, diesel and petrol etc. Several companies like ITC, DCM Shriram and Godrej enhanced their presence through rural retail stores. The first Triveni Khushali Bazaar was commissioned in February 2005 and within two months, generated revenues of Rs 12.4 mn. Encouraged by this success, company plans to open new stores not only in the command area of the existing and proposed sugar mills but also in Western Uttar Pradesh towns in near future.
For Triveni Khushali Bazaar, 2005-06 was the first complete year in existence. The division’s strength increased from one store in 2004-2005 to 11 stores in 2005-06 corresponding to an addition of 22,000 sq ft.The division’s stood at Rs. 162 million during the year under review(including the period during which the business was carried out by the subsidiary).
SUSTAINABILITY BEYOND BUSINESS
Apart of these Businesses Triveni also participated actively in various SOCIAL AND COMMUNITY SERVICES to enhance the quality of rural life in an around its areas of influence. Triveni Engineering and Industries Limited recognize that business growth is linked with societal progress, resulting in social obligations being reconciled with business decisions.
Schools: the company’s unit at Khatauli, Deoband and Ramkola run schools, where the admission is open to all community sections with negligible fees. • It constructed a classroom and donated another to ‘The Government Model primary School’ and a prayer hall in ‘Government Junior College’ in Peenya. • Awareness programmes and workshops on literacy improvement, girl child education and the abolition of dowry system were undertaken in sugar units in 2005-06. • The Deoband sugar unit conducted workshops in spreading awareness and educating the community at large on safe drinking water.
The Khatauli sugar unit organized a programme in career counseling for student passing out of school; it organized a sewing programme for ladies residing in the mill vicinity.
The Ramkola unit sponsored an inter school sports tournament.
It organized two EYE CAMPS and two HEALTH CHECK-UP CAMPS in association with I.M.A., providing free operation and treatment to all. • Dispensary and hospitals: Each of the company’s sugar units at Khatauli, Deoband and Ramkola run a charitable dispensary and small hospitals. • Eye Camps: The Company’s Deoband unit organized two Eye camps through the District Eye society for villagers; the sugar unit at Khatauli also organized an Eye camp in 2005-06. • Blood Donation Camps: The Company’s Khatauli unit organized blood donation camps.
OTHER SOCIAL INITIATIVES
• Road Repairs: The Khatauli unit helped repair roads around the factory premises.
It repaired around 14 Kms of village approach roads and constructed 5 Km of new roads.
Trees: The Ramkola unit under took a programme of aggressive tree plantation in and around the factory as a result of which 1100 trees were planted.
Food: The Deoband unit organized an annual langar and Gurugobind Sahib Path.
Culture: The Khatauli unit organized an Akhil Bhyartiya kavi Sammelan in which prominent national poets participated.
It worked with ‘Child Labour Rehabilitation Cum Welfare Fund’ in Mysore. It worked with the World Renewal Spiritual Trust, a unit of Brahma Kumaris in Mysore. It contributed substantially and also participated actively in social activities and seminars, among them noted a one ‘healthy lifestyle’s by Dr. Premasand from Mount Abu. It participated in a chess tournament organized for raising funds for Tsunami relief with the help of employee’s contribution. It conducted Cricket and Football tournaments in Babbal, Rankhandi, Bhaila and other villages
There are 12 types of risks, which can occur in the company at any time. These are: 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) Climatic Risk Raw Material Risk Regulatory Risk Competition Risk Liquidity Risk Realization risk Costs Risk Funding Risk Default Risk Cyclicatic Risk Technology Obsolescence Risk Foreign Competition Risk
1) CLIMATIC RISK:
Cane is monsoon – dependent and monsoon failure could lead to a decline in cane availability.
Risk Mitigation: The company’s units are situated in locations that enjoy abundant rain fall reinforced by adequate irrigation facilities. High degree of irrigation in the western UP areas, where the company’s three units are located, substantially insulates the cane crop from a monsoon failure. The sugar units in the western UP are situated in the Doab, considered as one of the best regions in India for cane cultivation, due to a fertile soil and adequate canal irrigation.
2) RAW MATERIAL RISK:
Cane is the main raw material for a sugar mill. Lower cane realizations may force farmers to shift to other crops. Risk Mitigation: Cane is a rewarding crop over other cash crops. Further, cane prices announced by the central and state governments ensure a reasonable return. The sugar mills help the growers to increase yield and propagate premium verities, contributing to additional farmer income.
3) REGULATORY RISK:
The Sugar industry is influenced by the government’s sugar policy. Populist measures may influence profitability. Risk Mitigation: The government has been pragmatic of late with respect of sugar policies. During the Last two years, when production was low, the government allows the import of raw sugar under an advance license with corresponding export obligations. This ensured that the immediate demands were met and the exports could then take place from subsequent surplus stocks. There are currently only few restrictions on the sugar industry, most important being the fixation of the cane price by the government. Lately the sugar mills in western UP are paying a cane price higher then the government recommended price and hence, this risk is only minimal.
4) COMPITITION RISK:
An increasing number of sugar mills in the company’s vicinity could increase the war for cane and effect utilization and growth. Risk Mitigation: The companies have taken the following initiatives to ensure an adequate supply of required cane from its command areas.
Maintaing strong farmer relations through timely payments. Active involvement in cane development to increase cane yield and quality. Reduce the diversion of cane for the manufacture of alternative sweeteners.
5) LIQIDITY RISK:
The company requires ready funds to meet working capital requirements. A lack of funds could lead to a loss of raw material while a high cost could result in loss in profitability. Risk Mitigation: The company enjoys an excellent relationship with its bankers and has been able to mobilize its working capital at competitive rates. The company also uses foreign currency loans and shortterm instruments like commercial paper to reduce overall cost. The company is rated A1+ (signifying highest safety) by ICRA with respect to short term loans, permitting is to access cheap funds.
6) REALISATION RISK:
Any decline in sugar realizations could affect the Company’s performance. Risk Mitigation: The sugar units of the company are located in the vicinity of sugar deficit areas, like Delhi, Haryana, Punjab and Rajasthan. As a result, it is able to earn relatively higher realizations. Further, the sugar units produce substantial large crystal sugar brands its output, maximizing realizations. To insulate against advance realizations, the company commissioned a large cogeneration capacity and has plans to set up a distillery, which are counter-cyclical to the sugar industry cycle leading to stable earnings.
7) COSTS RISK:
An inefficient fiscal control may threaten margins and profitability, especially during an industry downturn. Risk Mitigation: The company employs strict internal and budgetary controls adequately supported with an effective management information system to keep costs low. The company has a centralized procurement cell to meet the Requirements of all its sugar units; it is able to source large volumes at the Best terms.
8) FUNDING RISK:
The company may not be able to complete its ongoing projects on schedule in the absence of adequate financial resources.
The company maximizes the equity contribution for its expansion. It’s gearing of less then one allows it to borrow prudently and maximize the mobilization of low cost borrowing from the sugar development fund.
9) DEFAULT RISK:
The company provides customized solutions in its engineering business. Any default in receivables could skew its financial structure. Risk Mitigation; The company mitigates its risk through the following measures: • Appraisal of customer liquidity, both before initiating a contractual relationship with them and also at different stages during the project. • Arranging timely receipts, both in terms of the advance at the initiation of the contract and at various stages during the course of the project.
In the case of default, the company, after forfeiting the advance, can reengineer the Product and supply it to another buyer after making suitable changes.
10) CYCLICATIC RISK:
As the turbine and gear divisions derive a higher share of their revenues from industries like paper, sugar, steel and pharmaceuticals, a down turn in more than one can affect profitability.
Risk Mitigation: The turbine and gear divisions supply their products to diversified sectors such as sugar, cogeneration, independent power plants, paper and steel etc.Which mitigate the risk of cyclicality. Further, there is an endeavor to enhance the product range with a view to enlarge the market size. There is a focus to maximize the sourcing of profitable business from the supply of spares, servicing, retro fitment and maintenance.
11) TECHNOLOGY OBSOLESCENCE RISK:
In a precision cum heavy engineering business, a company has to be quick to respond to technology changes. Any delay could lead to a loss in market share. Risk mitigation: The company’s divisions are technology-conscious. Constant R&D initiatives, in – house product development, extensive training programmes coupled with technology absorption from foreign partners has made it possible for the company to upgrade its products. There is a system of benchmarking product efficiencies with the best global standards.
12) FOREIGN COMPETITION RISK: A number of international entrants could enhance competition.
Risk Mitigation: The company enjoys established brand equity in the domestic and international markets in terms of superior products and servicing, technology and refurbishment solutions, which will enable it to withstand competition. The turbine division faces competition from imported products and yet has maintained its market share at around 70 per cent. The company is focused on servicing customer in innovative and efficient ways at a reasonable cost leading to prompt and reliable services.
TECHNOLOGIES IN SUGAR DIVISION:
• • • Continuous Vacuum Pan Syrup Clarifier System Short Retention Clarifier
• Continuous vacuum Pan
Developed by Triveni SRI Limited, a wholly owned subsidiary, in association with Sugar Research International (SRI) of Mackay, Australia, the CVC was installed in the Deoband sugar factory for usage on ‘C’ massecuite, the first time an SRI pan was installed for ‘C’ massecuite in a sulphitation plant. SRI is one of the sugar machinery technology authorities in the world; its subsidiary, Triveni SRI Limited, has an exclusive license in India from SRI International for many of their products. Owing to technical improvements made on the CVP, Triveni and SRI are now eligible to jointly own the intellectual property for this new improved vacuum pan. Company has in the past presented these details in a paper jointly presented with SRI at a convention of the International Society for Sugar Sugarcane Technology.
• Syrup Clarifier System:
Installed at the Deoband and Khatauli sugar plants to improve the quality of sugar, this licensed product from SRI has been sold to EID parry in Tamil Nadu, where it is working efficiently.
• Short retention Clarifier:
To be installed in 2005-06 at the Khatauli unit and at the new plant, the clarification of juice is achieved in only 30 minutes while in a normal clarifier juice is retained for approximately 150 minutes. This prevents the inversion of sugar and also leads to an improved sugar recovery and quality.
Designed and manufactured by the company (captive technology), installed in company’s sugar plants. The mill-tandem has proved to be one of the most efficient in India: reflected in the reduction in Bagasse losses and increase in reduced mills extraction (RME); RME for the unit is 96 while that of the industry is around 95; bagasse loss in the unit is 1.6 compared to 1.9 for the rest of the industry; strong design feature ensures a negligible downtime. Triveni has set up over 65 sugar plants and supplied over 300 cane mills to sugar factories in India and overseas.
TECHNOLOGIES IN TURBINE BUSINESS GROUP:
The business of turbines is perhaps more sophisticated then most other technology led business on the grounds that it combines precision engineering with manufacturing. The company’s most impressive accomplishment was the completion of an R & D project where in the services of impact technologies (USA) and consulting professors from the Indian Institute of Science, the Indian Institute of technology and the university of De Mont fort (UK) were utilized.
The result was the successful development of highly efficient low pressure twisted and tapered blades. The company already has received orders for turbine incorporating these blades. The company also developed new efficient turbine designs up to 22 MW.
TECHNOLOGIES IN GEAR DIVISION:
The company was selected by Lufkin France to execute a drafting and hi-end designing assignment, which enhanced its high end design credibility. Due to pioneering engineering skills, the company has established its reputation as a major player in the retro fitment segment for high speed gears. As a result, it derives nearly 30 % of its revenue from this line of business, growing its knowledge capability due to a continuous exposure to diverse technologies.
TECHNOLOGIES IN WATER BUSINESS GROUP:
Over the years, company has brought advance technologies to the Indian market through close relationships with several business groups of US Filter Inc.: • • • Everex for conventional treatment equipment (license agreement since 1987). Ion pure for continuous electro de-ionizing (CEDI) equipment. Memcor for Membrane Bio-Reactor (MBR) and micro filtration membrane solutions and equipment. • Process water system for process engineering and support.
The company expects to revolutionize India’s water and waste water treatment segments through the introduction of various technologies relevant to the current / evolving market needs, particularly the following:
Relevance: India’s water treatment business in the power sector
Source: Ion Pure (US Filter) Replacing: Conventional de-mineralization based on resin. Advantages: • • • • • Absence of chemical additives Safe for human handling Use of a tenth of the conventional space Reduced boiler blow downs Four year pay back
Membrane technology – micro filtration
Relevance: India’s wastewater treatment business in recycle / reuse segment. Source: Memcor (US Filter) Replacing: Conventional Clarifier and aerobic biological treatment Advantages: • Barrier filtration technology that cans rationalize coli form content in polluted
water to less then safe limits making the water conducive for marine life. • ppm BOD. • effects. • Lower space requirement (a quarter of the normal plant size ) and a 40 % power Zero discharge and the absence of additives to treat the water, minimizing side Enhanced post- treatment water quality or downstream cities down to only 3-4
cost saving over the conventional system. • workshop. • Automated with minimal human interface. Minimal civic disruption; more then 70 % of value addition done in the
2006-07 Return on Net worth (RONW) (%) Return on Capital employed (ROCE) (%) Total Debt Equity Ratio (Times) EBDITA margin (%) PAT margin (%) Interest Cover (Times) Book value (Rs. Per equity share of Re. 1, post bonus) 72.59 43.52 2.74 17.94 10.36 4.89 7.91
2008-09 38.92 29.34 0.79 17.87 11.03 8.60 19.82
Financial and operational highlights
Our company follows mercantile system of accounting to present credible reports to the shareholders. The significant accounting policy followed by the company is stated in note 28 (1) to the accounts.
The company followed the landmark in financial year 2008-09 with significant growth in financial year 2005-06. • • Net turnover was higher by 24% at Rs 11920.37 mn. EBIDTA was higher by 24% at Rs 2130.00 mn.
• • •
PBT was higher by 30% at Rs 1611.79 mn. PAT was higher by 32% at Rs 1314.96 mn. EPS strengthened to Rs 5.88 from Rs 4.77 in the previous financial year.
As a result of this improvement financial performance and substantial equity infusion, the financial condition of the company has strengthened as indicated by the various financial ratios.
During the financial year under review, gross turnover increased by 60 per cent to Rs 10.21 bn, a record for the company. Sugar sales increased by 68 per cent, turbine sales by 33 per cent and gear sales by 27 per cent. The cogeneration plant at Deoband commenced operations in December 2004 and during the limited period of working in 2008-09 contributed Rs 183.3 mn to the turnover. Net turnover was 24% higher at Rs 11920.37 mn.there was an increase in turnover in all the business segments. The turnover of the sugar operations increased by 13 % and that of cogeneration by 222%. The turbine, gear and water divisions recorded an increase in turnover by 71%, 89%, and 69% respectively. The revenue of the various business segments are provided below:
BUSINESS SEGMENT WISE GROSS REVENUE:
Sugar Co-generation Total - Sugar Turbines Gears Water / waste water treatment Total - Engineering Others
7676.07 188.03 7864.10 1626.41 238.78 81.57 1946.76 21.16
8663.25 605.50 9268.75 2779.93 450.35 138.07 3368.35 157.79
The net segment revenue provided here in is prior to the inter unit adjustments and further “other” include operations of the agri centers up to October 25, 2005; following this date, the business was carried out by a wholly owned subsidiary.
Sugar Division: This division accounted for a gross turnover of Rs 8.13 bn, 78 per cent of the company’s revenue in 2008-09.the revenue break - up in respect of its major products is given below:
A 22MW cogeneration plant was commissioned at the Deoband sugar unit with the twin objectives to insulate the business from industry cyclicatic and provide steady alternatives revenues.
This division accounted for a gross turnover of Rs 1.75 bn, 17 per cent of the company’s revenue in 2008-09. The product wise revenue break up is below:
Products and services
Turbine Spares Refurbishing Others
1486.9 133.1 42.7 84.7
117.3 118.7 24.7 56.9
959.3 121.3 50.9 56.2
806.8 113.3 31.4 43.4
720.1 127.0 45.7 26.7
This division accounted for a turnover of Rs 275.5 mn, 3 per cent of the company’s revenue in 2008-09. Spares and services remained a high margin segment but accounted for only around 11 per cent of division’s turnover in 2008-09. The total division’s revenue grew by a CAGR of 29 per cent in five years.
Water / waste water treatment:
This division accounted for turnover of Rs 81.5 mn, 1 per cent of the company’s revenue in 200809. While the base is currently small, in view of the company’s technology range and potential in the industry, there is a substantial growth opportunity.
Raw material Manufacturing Cost Personnel cost Administration & Selling Cost Depreciation and Amortization Finance Cost
6014.59 521.41 531.77 395.33 178.73 304.67
Rs. Million 2008-09 % INCREASE
7621.63 614.70 676.22 511.58 288.25 229.96 26.72 17.89 27.16 29.41 61.29 (24.54)
Expenses as a % to Sales
The various expenses are here below:
With respect to the sugar operations, the increase was 18.74 percent due to an increase in crush and cane procurement price. In the case of the engineering divisions, the increase was 55.66 per cent as against an increase in net turnover by 73.02 per cent.
In terms of the percentage to net sales, manufacturing expenses were marginally lower then 2008-09.in the case of sugar operations, the expenses per unit of crush was Rs 131.11 per MT of cane crushed as against RS 125.47 per MT in 2008-09. In respect to engineering units, the
total expenses were 2.36 per cent of the net sale whereas these were at 2.33 per cent of the net sales in 2008-09.
The increase in personnel cost was higher due to normal salary increase on an account of the operations of the new co generation plant at Khatauli and new sugar unit at Sabitgarh. In the case of the turbine, gear and water divisions, the personnel cost was also on account of increased activity and expansion.
ADMINISTRATION AND SELLING EXPENCES:
With respect to the engineering division, expenses increased commensurately with increased activity. There were additional expenses on account of the Sabitgarh sugar unit and the Khatauli cogeneration plant, which were setup during the year.
DEPRICIATION AND AMORTISATION:
There was an increase in depreciation to the extent of Rs 112.92 million on account of various projects capitalized during the year, namely the Khatauli co generation unit, modernization an expansion of Khatauli unit, expansion of Deoband and the expansion of infrastructure at the turbine and gear divisions.
FINANCE COST (NET):
The reduction was primarily due to decline in the finance cost on working capital due to lower bank limit utilization by 37 percent owing to lower inventories carried as well as due to the surplus funds including unutilized IPO proceeds. However, in the case of term loans, there was an increased utilization by 52.5 per cent on account of various loans contracted for new projects, Finance cost also reduced due to the overall cost of funds being lower.
The PBIT margins of the company were 15.45 per cent higher at Rs 1841.75 mn. The major contributories of the increase were the turbine and co generation operations where the margins increased by 173 per cent and 265 per cent respectively. The margins of the gear and water business also increased substantially and the margins of the sugar operations declined marginally to Rs 2925 PMT of sugar sold as against Rs2959 PMT in financial year 04-05.
The share capital increased from Rs 103.02 mn to Rs 257.88 mn. Outstanding preference share of Rs 19.87 mn were fully re deemed on April 1st, 2005. The equity share capital increased due to an issue of bonus share (in the ratio 3:2), which were allotted on 17-06-2005 and a fresh issue of Rs 50 mn equity share in the recently concluded public issue which were allotted on 7 th, December, 2005.
Reserves as on March 31st, 2006 increased by 174.41 per cent from Rs 1838.27 mn as on 31st March 2005 to Rs 5044.48 mn due to improved financial for the year under review as well as due to an accretion of share premium of Rs 2350 mn relating to the public issue. The free reserve accounted for 96.27 per cent of the total reserves as on 31-03 –2006.
The total loans of the company declined by 10.55 per cent from Rs 4500.93 mn to Rs 4026.04 mn. Working capital limits reduced substantially by 38.41 per cent to Rs 1837.93 mn whereas other loans increased by 44.25 per cent to Rs 2188.11 mn. The utilization of working capital loans was lower due to lower average inventories during the year as well as due to a parking of surplus funds (including unutilized public issues proceeds) in the cash credit account.
The increase in other loans was due to various funding availed for capital projects executed in the financial year 2005-06.
During the year under review, there were additions to fixed assets to the extent of Rs 3268.37 mn owing to various projects executed during the year.
During the year, the total investment reduced from Rs 229.75 mn to Rs 18.64 mn . The investments in the preference share of group combines aggregating to Rs 211.50 mn were redeemed and accordingly all such investments were realized during the year.
WORKING CAPITAL MANAGEMENT:
Net current assets marginally increased by 1.57 per cent to Rs 3572.68 mn in spite of a new sugar unit and a cogeneration plant set up during the year. Inventories reduced 7 per cent mainly on account of lower sugar stocks. However, receivables increased by 50.55 per cent to Rs 1003.44 mn mainly on account of year end dispatches, which could not be realized by the year end. The excise duty deposited substantially increased from Rs 75.18 mn to Rs 251.70 mn in view of cenvat availed on capital goods, 50 per cent of which would be available in the next accounting year. Current liabilities were higher as advances from customers (mainly in the turbine division) increased from Rs 511.43 mn to Rs 798.63 mn.
FOREIGN EXCHANGE MANAGEMENT:
The company did not have significant foreign exchange exposure. The foreign exchange exposure during the year was managed through forward covers as well as through derivatives. As at the year-end, the amount involved in foreign currency in respect of payables and receivables was equivalent to Rs 26.80 mn and Rs 35.77 mn respectively at the exchange rates that prevailed at the year-end.
Chairman and Managing Director
Mr. Dhruv M. Sawhney
Board of Directors
Dr. F.C. Kohli Lt. Gen. K.K. Hazari (Retd.) Mr. M. K. Daga Mr. R. C. Sharma Mr. V. Venkateswarlu Mr. R. K. Kapoor (IDBI Nominee)
Vice President (legal) and Company Secretary
Mr. V.P. Ghuliani
Punjab National Bank Central Bank of India Canara Bank Oriental bank of Commerce Union Bank of India Standard Chartered Bank State Bank of Travancore UTI bank Ltd.
M/s. J.C. Bhalla & Co.
M/s. Virmani & Associates
COMPANY’S BUSINESS LOCATIONS
Deoband, District Saharanpur Utter Pradesh – 247554 Phone: (01336) 222497, 222185,222866 Fax: 222220
‘Express Trade Towers’, 8th floor 15-16, sector 16 A, Noida 201301 (UP) Phone: (0120) 5308000 Fax: 5311010-11
Share department/investors’ grievances
‘Express Trade Tower; 8th floor 15-16, sector- 16 A Noida 201301 (U.P.) STD code: 0120 Phone: 4308000 Fax: 4311010-11 Email: shares@trivenigroup. Com
Registrar and share transfer agents
For equity shares held in physical and electronic mode. M/s Karvy computer share Pvt. Ltd. Karvy house,46, Avenue 4 Street No. 1, Banjara Hills Hyderabad 500034 STD Code :040 Phone: 23312454,23320751 Fax: 23311968 Email: email@example.com
Turbine business group
12-A, peenya industrial Area, Peenya, Banglore-560058 STD Code: 080 Phone: 28394721(4 lines), 28394843, 28394771 Fax: 28395211
Gear business group
1, 2, 3 belagola industrial Area Metagalli, K.R.S. road, Mysore-570016, STD code: 0821 Phone: 5280502, 5280501 Fax: 2582694
Fixed deposit section
Accounts Department ‘Express Trade Tower; 8th floor 15-16, Sector-16A Noida 201301 (U.P.) STD Code: 0120 Phone: 4308000 Fax: 4311010-1 Email:firstname.lastname@example.org
Khatauli sugar unit
Khatauli, District- Muzaffarnagar Uttar Pradesh –251201 STD code-01396 Phone: 272561, 272562 Fax: 272309
Deoband Sugar Unit
Deoband, District Saharanpur Utter Pradesh – 247554 Phone: (01336) 222497,222185, 222866 Fax: 222220
Ramkola sugar unit
Ramkola, District-Kushinager Utter Pradesh-247305 STD Code: 05567 Phone: 256021 Fax: 256248
Satigarh Sugar unit
P.O. Karora, Tehsil Khurja Districrt-Bulandshare(U.P.) STD Code: 05738 Phone:228894 Fax: 228893
Water business group
Express Trade Tower’ 8th floor 15-16, sector- 16 A Noida 201301 (U.P.) STD Code: 0120 Phone: 4308000
Khatauli, District- Muzaffarnagar Uttar Pradesh –251201 STD code-01396 Phone: 272561, 272562 Fax: 272309
Deoband, District Saharanpur Utter Pradesh – 247554 Phone: (01336) 222497, 222185,222866 Fax: 222220
Branded Sugar Business
‘Express Trade Towers’, 8th floor 15-16, sector 16 A, Noida 201301 (UP) Phone: (0120) 5308000 Fax: 5311010-11
• Triveni SRI Limited 104, 1st floor,99 grand Plaza
Old Rajinder Nagar Market New Delhi 110010 • Upper Bari Power Generation Limited 1560, H.I.G. Ground floor Sector 70, Mohal Panjab 160062 • Abohar Power Generation Limited 1560, H.I.G. Ground Floor Sector 70, Mohali Punjab 160062
Selling procedure of sugar
First of all the company gets the 100% production, which is sale according to sugar classification: Free sugar: A turnaround in free sale sugar realizations commenced in February 2004, with subsequent increase in May 2004 and January 2005.90% free sugar supply in open market by Agent and agent will issue delivery order to sales office in muzaffarnagar, and sale office will issue delivery order to sugar sale office Khatauli.then sugar office Khatauli issue delivery order to sugar godwan.then sugar godwan on behalf of that delivery order send to a/c office kht. Sugar godwan make invoice to the parties. The sugar unit Khatauli just has about 10-15 agents. All agents take the commission @ 0.5%. • On free sugar, the govt. decides excise duty @ 85 per quintals and 2% education cess, 1-% higher education cess. • On free sugar price decided by head office in Noida on the basis of demand and supply.
Levy sugar: levy sugar determined each year by the ministry of food and civil suppliers; govt.
of India. 10% levy sugar supply to different government agencies such as army, state govt.etc.On levy sugar price Declared by govt. the basis of sugarcane recovery. On levy sugar have excise duty @ 52 per quintals and 2% education cess; 1% higher education cess.
In case of cheque rejection : if bank seem to have any error in cheque due to some
reasons; such as in-sufficient balance, different sign.etc.then company can get interest and penalty to the competent party upto date represent that cheque as per company policy. Sale section Discussed by: Mr.kulvendre Singh (Depti manager of sale department)
Purchase department: purchase dept. purchase the raw materials for required dept. the company make the committee for purchase the materials on the basis of length of materials. These are categorized into two parts:
CPC (central purchase committee): this committee have made the purpose for bulk material purchase. In CPC cover the 90% item of total purchase. In CPC include these items: Bearing, Electrodes, lubricants, iron, steel, limb, sulpher, cement, chain, gunybags, motor electric,electric cables, and all type of chemicals etc.
UPC(unit purchase committee): this committee have made the purpose for small material purchase. in UPC cover the 10% item of total purchase.
Procedure of purchase of material: first of all the Required dept. makes the indent and approved by GM.this indent placed to the store dept.store manager see that material in this indent. if in store room have not that material then this indent placed to the purchase dept.for purchase that material. A format of indent (required list of material)
Item name quantity UOM date urgent approx.
Floating of inquiry: this inquiry is related to take the actual information about indent. Its require only 3-4party. Preparation of comparative statement: A comparative chart is a formal document to take the different prices from different parties about the material. Purchase manager prepares the purchase order against the minimum price.
A format of comparative statement: s.n. material required Prepare the purchase order: according to the comparative statement purchase manager prepare the P.O.and give the order to the party. Three copies are required to be send to accounting section, purchase dept.and supplier.receive material to be send to store room. After checking the material by required party to be supply to the party. Sales tax: sales tax paid under two sections: 3B: for purchase the material same state @4%. 4C: when purchase the material from out side state @12%. Quantity rate last purchased M/S. rates M/S. rates M/S. rates
Discussed by: Mr. Mahavir Singh (manager of purchase department)
IT AND CANE DEPARTMENT
IT dept have the all information about cane areas, farmer, issuing the purchee of farmer etc. IT dept. maintain the all records of cane area as well as salary, cane development, GRP, store and PF. • Because sugarcane is the only significant raw material for sugar industry.
Cane development staff: Triveni sugar mill has appointed dedicated cane development staff in addition to a cane procurement team, helping farmers imbibe the best farm practices and achieve a desired varietal mix with the objective to maximize recovery and yield. Cane development staff
providing access to advanced farming best practices, arranging timely remuneration and taking a leadership position in community development. • In off-season the staff surveys to farmer’s sugarcane production, and gives the report to IT dept. • After receiving the report, IT dept. prepare the purchee according to sugarcane. In this purchee include 12 rows and 15 columns. The purchee can be classified into two parts: Society purchee: in this purchee have included data only before supply the sugarcane. Mill purchee: In this purchee have included data only after supply the sugarcane.
Growth of farmers: The company deals with approximately 2000000 farmers across its fourunit.the Khatauli unit have approximately 50, 000 farmers (growers).
Price policy: The Indian government follows a dual pricing policy:
Statutory minimum sugarcane price(SMP): the purchase price of sugarcane is announced by the ‘central government’. The govt. fixed the price considering the recommendations by the commission for agricultural costs and prices. in 2005-2006, the SMP declared by the government was RS. 795 per metric tones for an average recovery of 9.0% plus RS. 8.8 for every 0.1% increase in recovery. The recovery calculated on peak period. State advisary price (SAP): A majority judgement of the supreme court dated 5 may 2004 held that the state government in U.P., in exercise of its regulatory power as contained in the U.P. sugarcane(regulation of supply and purchase) Act 1953, could fix the price of sugarcane. Additional cane price: The state and central govt. declared the prices of sugarcane. both price policy have a difference, the difference is called additional cane price.
Varieties of sugarcane: In sugarcane crop have the different varieties. on the basis of
varieties the government declared the different pricies.the varieties can be classified into three parts:
Early variety: in this variety the crop is mature and sugarcane have maximum cane. on this variety announced the premium at RS.5 per quintal. such varieties are COG64, COG83, COG88230 etc. General variety: general variety has minimum cane and maturity as compare to early variety. the central govt. declared the price on general variety. such varieties are CO767, 8432 etc. Rejected variety: rejected variety has very low cane and has very low maturity. rejected variety’s price at RS. 2.50 (per quintal) low as compare to general variety.
Cane areas: every sugar unit has different capacity. The govt. can be allocated the areas on the
basis of mill capacity. the cane areas are classified into two parts: Reserved areas: the govt. allocated these areas according to last year payment, capacity of mill and distance of areas. Assiend areas: Sometime the govt. allocates the reserve areas to the every sugar mill, if any mills cover of their requirement than reminder of areas the govt. gives to other mill.
Purchase tax: the govt. announced the purchase tax every year. Every sugar unit gives the
purchase tax. In 2005-2006 the govt. announced the purchase tax @ RS. 2.0 per quintal.
Procedure of supply of sugarcane: Every mill has a procedure of supply of sugarcane.
Khatauli sugar unit has a supply capacity 150,000-quintal per day in sugar season. In this procedure has many steps:
1. Firstly the mill makes the requirement. 2. Secondly the indent placed to the society. 3. The society distributed the purchee to the farmers. 4. Farmers supply of their sugarcane to the society.
5. The payment made by IT department.
Every sugarcane supplies through society. Societies take the commission a particular percentage. In 2005-2006 season the society taking the commission @ RS. 3% on SMP. The society can be classified into two parts:
➢ Cane society ➢ Cane council • Sometimes the govt. open of different centers in many areas. If farmers supply of their sugarcane on these areas then farmers get some deduction on this supply. These areas give deduction @RS. 5.75 per quintal to the farmers. • Sugarcane brings by different transportation. The cane manager decided of freight. The freight can be decided on the basis of distance.
Payment to the farmers: the payment makes by the IT dept. every payment gives by the
cheque. All farmers have a bank account. Every payment gives through society. when bank checking of purchase. After purchase checking the bank payment to the farmers. All payment should gives within 15 days after receiving the sugarcane. • Sometimes any farmer has lost of their purchee, then farmer should be reported to the society and IT dept. then IT dept. issue a duplicate purchee of the farmer.
Supply of burnt sugarcane: sometime in sugarcane crop has get burn from many reasons.
But society accepted of this supply on little deduction. on this burnt sugarcane gives the first priority of supply. • The mill laboratory taking the sample of that sugarcane. the laboratory gives the report to society.
Burnt sugarcane price declared by the DM on the basis of that laboratory report, general rate and burnt cane recovery. After receiving the supply of that sugarcane, payment to the farmer at the last of sugar seasons.
INTRODUCTION TO THE TOPIC
OVERVIEW OF SUGAR BUSINESS
Global sugar production is expected to increase from 144.05 MMT in 2004-2005 to 148.80 MMT in 2005-2006.
The company’s installed capacity of 40500 tcd across the three units is among the largest in India. The company’s Khatauli unit is credited with having crushed the largest quantity of sugar across any unit in India in the 2005-06-sugar season.
RATIONALE FOR PRESENCE
India is the largest consumer of sugar and its per capita consumption is still below the levels achieved by peer countries. With a projected increase in per capita incomes and an improvement in lifestyle quality across India’s middle and lower economic classes, we expect that sugar consumption will increase significantly on account of two factors: the crossover from the consumption of gur and khandsari to sugar and an increase in direct consumption by all sections of the Indian society.
COMPANY’S VALUE PROPOSITION
Sugarcane is the only significant raw material for the domestic sugar industry. Consequently, any interruption in sowing or harvesting of sugarcane could lead to a detrimental impact on the sugar industry at large and to our company. As a forward-looking organization, Triveni is actively engaged in mitigating foreseeable risk factors. In relation to fostering the availability of sugarcane in its ‘command area’,
Cane Development Programme
Triveni protects farmer interests in a number of ways-ensuring consistent and equitable cane purchases from farmers, providing access to advanced farming best-practices, arranging timely remuneration and taking a leadership position in community development. In turn these initiatives encourage farmers to allocate a significant acreage towards the cultivation of sugarcane, making the arrangement mutually rewarding. The quality of the company’s output has helped it graduate to the states of a major brand in India’s retail and wholesale markets, thereby enabling it to enjoy a premium and a distinctive recall in a relatively unbranded marketplace. The philosophy of the cane development and marketing is almost common for all the sugar units. While in following paragraphs, description is for Khatauli but applies generally to Deoband & Ramkola units as well. After identifying the constraints in the area of operation, the mill has undertaken an ambitious programme of Cane Development for improvement in productivity and quality of cane. The mill has separate cane development wing with qualified staff and experienced personnel. For this purpose the operational area has been divided into sub-zones and the field supervisory staff has been provided with the necessary facilities for efficient working and proper supervision of the various cane development activities. The cane development programme is planned with following activities:To educate the farmers regarding modern agricultural practices in sugarcane cultivation. To replace the unapproved and degenerated cane varieties To initiate and propagate the use of healthy and generically pure, seed material.
To initiate heat therapy for the treatment of cane seed through moist hot air treatment plant to eliminate the diseases.
The details of various schemes of cane development being undertaken by mill are enumerated as below:» Plantation of High Yield Variety of Sugarcane » Seed Distribution » Demonstration Plots » Technical Assistance to Cane Growers » Moist Hot Air Treatment » Irrigation » Ratoon Management » Biological Laboratory » Soil Analysis and Soil Treatment » Control of Post Harvest Sugar Losses » Awareness Among Cultivators » General
• Advanced technological assets and capital equipment, represented by world-class continuous
vacuum pans at the B (sugar boiling) and C (sugar boiling) stages, resulting in boiling consistency, uniform crystal size, reduced molasses purity, decline in steam consumption and enhanced product quality. The technology and intellectual property for this equipment were jointly developed with Sugar Research International, the premier Australian organization. •
Positive recall in a competitive marketplace, translating into a premium and quicker off-take. The location of the sugar manufacturing plants in the fertile Doab region (between the Ganga
and Yamuna rivers), resulting in a superior sugarcane quality and an exceptionally high yield.
Canal water availability over a large part of the region, representing one of the highest
penetrations of man-made water intervention in India, reducing the company’s dependence on monsoon vagaries. •
Established culture of cane cultivation in the region. Largest cane crushing capability across any one unit in India (18.66 million quintals in the
2008-09-sugar season at Khatauli); a quicker crush enables the farmer to grow wheat on fallow land and earn an attractive supplementary income. • Excellent cane procurement logistics, critical for any large sugar unit, demonstrated in the
systematic pooling of cane from no less then 220 purchase centers in the Khatauli command area without any shortage or inventory pile-up.
Dependable relations with more than 160,000 farmers across the Khatauli, Deoband and
Ramkola command areas, resulting in a reliable and increasing supply of sugarcane.
Strong in-house technical and project management capability, resulting in the commissioning
of the Deoband co-generation project in the fastest implementation time lines; proposed expansion of the Khatauli capacity from 11750 tcd to 16000 tcd.
Vast project execution experience in setting up sugar plants and carrying out expansions in
view of our earlier experience in sugar plant machinery and through our subsidiary, Triveni SRI Limited.
The total consumption of sugar increases by 1.2 MMT in 2003-04 to 18.5 MMT in 20042005. The forecast of the world sugar balance (October2004 to
September 2005) indicates that
production will be 2 mn tones lower than consumption: world sugar output (October 2004 to September 2005) has been estimated at 146.1 mn tones (raw value) as against 143.7 mn tones in the previous year while consumption is estimated 2.1 per cent higher at 148 mn tones (raw value) with increased demand coming out of Asia and the Far East. Interestingly, leading trade house ED&F Man sees this global (2008-09, Oct-Sept) deficit widening to 4 mn tones; its production estimate for 2008-09 is unchanged from its 2007-08 benchmark of 143 mn, while consumption, driven by Asia, is forecast to increase from 144 mn to 147 mn. In fact, the principal factor behind the price rise over the past 18 months was the conviction that global demand growth could outstrip production in 2008-09, depleting stocks, as well as the belief that high oil prices may induce Brazil and other countries to divert more cane towards the production of ethanol, reducing cane supplies directed towards sugar manufacture. Looking into the short-term, two developments are likely to tip yhr Asian balance: India’s sugar consumption has been growing at an average annual rate of around 3 per cent over the last
ten years; besides, global sucrose demand, discounting the role of artificial sweeteners, is expected to grow by around one mn tones a year. China too is likely to become a major importer after 2007, given the limited availability of its resources to expand sugar production.
Sugar and dairy products are probably the most protected agricultural sector. As a result,
the impact of product-specific negotiations in the WTO Doha Round (as agreed in the July 2004 framework) on sugar was more significant then in the last WTO round of multilateral trade negotiations. The critical factors: the base period chose for the duty reduction commitments, the length of the implementation period for making the reductions and whether sugar would be included in a WTO list of sensitive products, which would allow it to escape a part of the WTO trade reform process. More recently, the World Trade Organization’s highest court issued a final ruling on April 28, 2005, ordering the European Union to stop dumping subsidized sugar illegally on the global markets or face trade sanctions. The decision by the Who’s Appellate Body in Geneva gives the EU up to 15 months to strictly comply with this directive. It is important to note that the export of white sugar, especially from European Union, is heavily subsidized at prices less than 25 percent of the prices prevailing in the European domestic markets. But for such exports, the international prices of the white sugar would be higher and would in turn have a favorable impact on India’s domestic prices. In 2004, a panel of WTO experts estimated that the EU exported about four million metric tones of sugar in 2004-05 (period under investigation) or about three times more then what the rules permitted. As a result, any reform in this area will give Indian exports a significant boost and have a positive impact on global prices. India also suffers from a small quota in the Loma and ACP conventions, which gives members a preferential price in the lucrative EU and US markets. Any increase in these quotas could help domestic manufactures in the short term.
At the 13th annual International Sugar Organization seminar in 2004, Chairman Francisco
varua (also President of the Philippines Sugar Millers Association) pronounced that ethanol could become the sugar cane industry’s principal product by the end of the first decade of the new millennium. Not only are fuel ethanol programmes spreading across the globe, but more players are becoming aware of the need for cross-order trade to help the product become more competitive against gasoline. Since Brazil will need to raise ethanol production by 14 bn liters (25 mn tones sugar equivalent) just to meet its growing domestic demand- this represents 175 mn tones of cane, 2.5 mn hectare of extra land and an addition 85 to 90 mills – FO Licht does not expect a large Brazilian sugarcane crop to upset the world sugar balance, especially as ethanol is expected to become dearer over the foreseeable future.
DOMESTIC INDUSTRY SCENARIO AND OUTLOOK
The sugar industry in India is highly fragmented, with 566 sugar units spread over 16 states. The total capital employed by the sugar industry is Rs 250 bn, annual sugarcane payments Rs 180 bn, direct employment for 500,000 and the involvement of 45 mn farmer/families in cane growth. The average size of each unit is approximately 3300 tcd, substantially below the new international economic size of 7500 tcd. Nearly 35 percent of all Indian mills are in the private sector, 6 per cent in the public sector and 59 per cent in the co-operative sector. Despite the large recent profits shown by the Indian sugar industry, 112 mills – old and inefficient remained closed during the year. In a raw material-dependant industry, profitability is influenced by the following factors:
Within the ‘reserved area’ of any factory, the yield and size of the area under sugarcane
are critical success drivers.
• Economic size:
Without a minimum economic size of 5000 tcd (generally 10000 tcd in western Uttar Pradesh), it is becoming increasingly difficult for a sugar unit to command pricing power.
The ability to minimize sugar-processing losses depends on process technology.
The ability to draw a higher percentage of sugarcane from the reserved area reduces the diversion to other sweeteners.
This is directly influenced by soil quality and cane development programmes initiated by
progressive manufacturers; a higher sugar content in sugarcane leads to the manufacture of more sugar, while payment is still based on weight.
The ability to bring cane in quickly from the fields and continuously operate a sugar unit
minimizes post-harvest sucrose evaporation.
The company achieved 7 % higher crush in 2005-06,a good performance as it competed successfully with producers of alternative sweeteners to reduce cane diversion and increase drawled of sugarcane. Further, the company produced Rs 0.38 million tones of White sugar in 2005-06. Due to late rains, winter frost and overfurtilisation, the sugar recovers in western UP
were lower by around 0.6-0.7 % then what had been achieved in 2008-09. Average recovery for our sugar units declined from 10.08 % in 2008-09 to 9.59 % in 2005-06 due to reasons a foresail. It is to the company’s credit that despite poor weather, the Deoband unit reported one of the highest recoveries among all western U.P. sugar factories during the season under review. Triveni’s Khatauli, Deoband and Ramkola units crushed 18.66 mn tones, 13.8 mn tones and 3.4 mn tones of sugarcane respectively during the 2008-09 sugar seasons. The sugarcane crushed at the Khatauli sugar unit was the highest across any unit in the country. Recovery was 10.06 per cent at Khatauli, 10.19 per cent at Deoband and 9.86 per cent at Ramkola. The company also imported 0.185 mn tones of raw sugar, which was converted into white sugar during the 2008-09-sugar season. The company produced 1, 96,000 tones in Khatauli (included processed raw sugar), 1,52,000 tones in Deoband (included processed raw sugar) and 33,600 tones in Ramkola, a cumulative 3,81,600 tones in 2008-09 (3,64,400 tones in 2007-08). As a result, company emerged as one of the largest sugar producers in India and expects to preserve this position following the increased production from its ongoing expansion programmes. The company’s Khatauli unit procured cane from over 220 out-centers during the letter part of the season, a record across any sugar unit in India. Dispersed prudently over a 59000 hectare commend area, Khatauli’s sugarcane marketing staff refined the logistical system of cane harvest and transportation in the shortest time (empirical studies suggest that if whole stalk sugarcane is not crushed within 16 hours following harvest, the sucrose in the cane is converted into non-sugars with a consequent drop in sugar recovery). This efficiency will stand the company in good stead when it expends its capacity to 16000 tcd in the 2005-06 seasons. Besides engineering stoppages were within the estimated budget there was an attractive improvement in steam consumption, thereby increasing the allocation of Bagasse for the Deoband co-generation plant.
FORWARD-LOOKING STATEMENTS Global Corporate Strategy
In the opinion of leading international sugar expert F.O.Licht, regulatory, technological and organizational issues will drive the growth of sugar companies. Since sugar is an agricultural commodity, the last factor is expected to influence profits the most. In this connection, it would be reasonable to assume that regulatory differences between various production locations may decline. As a result, companies that profited from ‘regulation rents’ (guaranteed income within a protected business environment) will need to change their strategy to protect their longer-term survival. The last of these determinants limits the expansionary drive of sugar companies to national and /or supranational entities (EU) where an identical set of rules guarantees a high degree of planning security. The regulatory environment under which sugar companies operate is often challenging, requiring skill, experience and potential clout. From an international perspective, the industry structure of the sugar sector is surprisingly mature and yet fragmented; technology is advanced but innovations restricted to ‘normal technological progress; markets saturated but driven by economic or population growth. As a result, technological economies of scale are important in determining the size of an individual plant. From an organizational perspective, companies can succeed through prudent cost reduction by centralizing functions (cost accounting and data processing) or optimizing competencies (bargaining contracts with suppliers and customers etc.).
Company’s Expansion Plans
Company intends to complete the following projects which will enable it to avail benefits / incentives under the UP Government sugar policy:
The commissioning of three new sugar plants. Each plant to have 5000 to 7000 tcd
capacities (expandable to 10000-12000 tcd at a minimal cost). The commissioning of one of the plants (Sabitgarh) at one of the best sites in India today, with 75 per cent of the cultivable area being canal irrigated with almost no low lying sugarcane areas. In preparation, over 5000 hectares of high recovery sugarcane have been planted. • The modernization and expansion of the Khatauli sugar unit from 11750 tcd to 16000 tcd,
which will make it the largest single standalone sugar unit in India. • The commissioning of a 23 MW co-generation plant at Khatauli by September 2005 to
supplement the 22 MW cogeneration plant at Deoband. Following the establishment of these three units and the expansions at the existing units, company’s cane crushing capacity will significantly rise from its existing aggregate of 25,250 tcd. The benefits of this scale equate to a better coverage of overheads, generation of adequate bagasse to ensure the fullest utilization (over 270 days) of company’s two cogenerations units and tax-free profits from the two-cogeneration units for ten years. Going ahead, company also intends to commission a large distillery to fully consume the large throughput of molasses with the objective to manufacture ethanol in line with the government policy. It is our opinion that there will be an inevitable consolidation over the next few years in the sugar industry, with unviable plants in the co-operative, state government and private sectors closing down. This will present attractive acquisition opportunities and your company expects to avail of them especially if they lie in their targeted geographies.
SUGAR PRODUCTION AND SELLING PROCEDURE
One of three largest sugar companies in India. Crushing capacity of 40,500 TCD in FY 06.
• • •
Units situated in Khatauli, Deoband, Sabitgarh ( Western U.P.), Ramkola (Eastern U.P.). Manufactures plantation white sugar. Contributed 70 % to the company’s turnover in 2005-06. Technical association with sugar research institute, AUSTRALIA, through a wholly owend subsidiary.
Magnified crystals of refined sugar
Magnification of typical sugar In general use, non-scientists take "sugar" to mean sucrose, also called "table sugar" or saccharose, a white crystalline solid disaccharide. Humans most commonly use sucrose as their sugar of choice for altering the flavor and properties (such as mouthfeel, preservation, and texture) of beverages and food. Commercially-produced table sugar comes either from sugar cane or from sugar beet. The "simple" sugars, or monosaccharides (such as glucose), store energy which biological cells use and consume. In a list of ingredients, any word that ends with "ose" probably denotes a sugar.
In culinary terms, sugar as a type of food delivers one of the primary taste sensations, that of sweetness.
FORMULA OF SUGAR
Cane Area and Production:
In the 2008-09-sugar season, a lower planting of sugarcane and poor yields resulted in a fall in sugar production in India. With rising sugarcane prices and prompt payments to farmers, this trend is expected to reverse over the next few years.
Area sugarcane (million
under Yield (tones per Sugarcane hectare) production (million tones) 30.9 32.1 40.5 45.0 48.3 57.8 65.4 70.8 68.2 64.6 63.8 62.9 36.4 52.0 69.2 110.5 126.4 154.3 241.1 299.2 298.4 281.6 221.2 201.9
Sugar production (million tones) 0.1 1.1 1.1 3.0 3.7 5.1 12.0 18.2 18.5 20.1 13.9 13.0
1930-31 1940-41 1950-51 1960-61 1970-71 1980-81 1990-91 1999-00 2005-06 2006-07 2007-08 2008-09
hectares) 1.2 1.6 1.7 2.4 2.6 2.7 3.7 4.2 4.4 4.3 3.9 3.7
Previous Year (2005-06)
CURRENT YEAR (2006-07)
1) 2) 3) 4) 5) 6) 7) 8) 1) 2) 3) 4) 5) 6) 7)
Cane area Cane crush –from assigned area -From cane punches Total cane crush Recovery Date of start Gross days Date of closer Cane crush for financial year Recovery of financial year Cane price Incentive for E.MV Trpt.deduction for center Total cane cost Free sugar
43708 hect 145 lac qtl 30 lac qtl 175 lac qtl 10.10% 25.10.06 170 12.04.07 183.87lac qtl 10.08% Rs.125/qtl Rs.5/qtl Rs.5.75/qtl Rs.138.97/qtl Rs.1900.30/qtl (Average
45740 hect 129.22 lac qtl 29.74 lac qtl 158.69 lac qtl 9.65 % 20.10.05 183 20.04.06 153.30 lac qtl 9.68 % Rs.115/qtl Rs.5/qtl Rs.5.75/qtl Rs.134.95/qtl Rs.1738.37/qtl for (Average for financial year) Rs.1276.37/qtl for (Average for financial year) Rs.234.04/qtl for (Average for financial year) Rs.75.55/qtl Rs.13.37/qtl
financial year) Rs.1300.60/qtl (Average
financial year) Rs.229.85/qtl (Average
10 Bagasse transfer price ) 11 Press mud ) 12 Repair expenses ) 13 a) Off season ) 14 b) Season
financial year) Rs.75.00/qtl Rs.13.50/qtl
Rs.325 lac Rs.150lac
15 c) House keeping ) 16 Total ) 17 Procee expenses ) 18 Steam from co-generation ) 19 Power from co generation ) 20 Packing cost ) 21 Head count ) 22 Profit ) 23 Cost of production (as per AS-2) ) 24 Early maturity varty % ) 25 General maturity varty % )
Rs.65 lac Rs.540 lac 547.88 lac of cane
Rs.2.63/qtl of cane Rs.2.71/qtl crush crush Rs 1329.01 lac (for Rs.1197.61
fin year) lac/financial year Rs.744.92 lac (for fin Rs.654.45 lac year) 49.50/Qtl 1029 Rs.3508.56Lac Rs.1524.18 62.38% 37.62% financial year 47.85/qtl 1284 Rs.3462.66 lac Rs.1588.30 58.285 41.71%
Global Consumption Forecast
Global sugar consumption is expected to increase by an average 1.5 per cent over the next ten years. While the outlook does not account for any significant demand shocks- the only country that will reduce its consumption is the US- analysts have argued that China could increase its per capita consumption levels dramatically during this period.
World Sugar Consumption Projection (1000 tonnes, raw value): Country
Russia Europe Africa U.S.A. N & C America Brazil South America China India Asia/Pacific TOTAL
6860 32122 13842 8959 19221 10395 18161 12500 19250 63204 149549
7942 33976 15989 8969 20462 11379 18669 14143 22470 71516 160709
8866 35685 18114 8949 21760 12383 20254 16553 25188 80187 176163
Domestic Sugar Balance
Company has been fairly accurate in its sugar production forecasts (with reference to data given the annual reports of the last two years) usually made in May, well before the monsoons. Looking ahead, company has made a five-year nationwide production, consumption and inventory forecast.
Comparison between triveni Estimates and Actual Sugar Production (mn tones): Details
Company Estimate Actual Production
The key determinant of average sugar prices over a year is the stock ratio (stock in the country compared to consumption), which is also the basis on which the International Sugar Organization, Sugar Journal F.O.Licht and global sugar trading houses draw out their estimates. Some factors used by company in arriving at the estimated stock levels comprise the following: • Even as industry estimates have opening stocks as on October 1, 2004 that vary from 6.9 mn
tones to 7.5 mn tones, the Government is using a figure of between 8.2 mn and 8.5 mn tones. If we take the Government figure, than internal consumption in 2007-08 will be even lower than 17.7 mn tones, which does not seem sustainable as the industry and Government have agreed on the consumption figure of 16.80 mn tones in 2005-06 as their bases. With low sugar prices in 2006-07 and 2007-08 as well as the impact of rising population and prosperity, it would be reasonable to assume that sugar consumption increased by around 0.6 mn tones per year during the period. According to Government estimates, the consumption of sugar is estimated to grow by CAGR of 3 per cent. In the current sugar season up to March 31st, 2005, 1.4 mn tones of raw sugar had been imported. Taking into account the existing contracts for raw sugar imports and future contracts, Company forecasts that a further 0.6 mn tones of raw sugar will arrive in the country before September 30, 2005. • While it is difficult to accurately predict sugar production before the onset of the monsoons, as
in the past, Company have collected data on the existing area under sugarcane in different parts of
the country, and after making a prediction on sugarcane drawal rates based on expected competition from alternate sweeteners, arrived at subsequent year’s production. Sugar production for 2006-2007 has taken into account new crushing capacity, which will come on a stream and the closure of sum unviable ones. • By the end of the 2006-2007 season, around 2.0 mn tones of raw sugar will have been
imported (as per Government policy, tolled white sugar will need to be exported within 24/36 months from the date of imports). It will only be possible for these exports commitments to be completed by 2007-2008. • With closing stock as a proportion of consumption under 30 per cent up September 2007, we
expect sugar prices to keep pace with inflation and the inevitable rise in sugarcane cost during the next three years, enabling current margins to be preserved. • Company has not factored an increase in disposable incomes, which, if it transpires, will
strengthen Indian average consumption for 2008-09 (17.82kg / year) towards the European (39.34kg / year) and North American (37.24 kg / year) averages.
Production, Consumption and Stock – Past, Present and Future (mn tones): Details
Opening Stock Production Imports/ raw sugar processed Total Available Internal Consumption Exports Closing Stocks Closing per cent (of domestic consumption and exports) Sugar price trends
11.6 13.6 0.5 25.7 17.7 0.2 7.8 43.6
7.8 12.9 2.0 22.7 18.2 4.5 24.7
4.5 18.0 1.5 24.0 18.8 0.4 4.8 25.0
4.8 22.0 26.8 19.4 1.6 5.8 27.6
Process of Sugar Production:
The whole sugar production is started from the procurement of raw material. Main raw material is sugarcane. Sugarcane is purchased by the company through sugarcane society where farmer sale their sugar for the production of sugar. Sugarcane has emerged as one of the most attractive crops in the country today mainly because unlike other crops, farmers are assured of a statutorily enforced minimum price by the government (as opposed to a minimum support price).so, the government, both central and state level, plays a critical role in the fortunes of India’s sugar industry. As a result, the central and state governments announce the price of sugarcane. The purchase price of sugarcane declared annually by the central government is referred to as the statutory minimum price (SMP). In 2005-06, the SMP declared by the government was Rs.795 per metric tonnes for an average recovery of 9.0 per cent plus Rs. 8.8 for every 0.1 per cent increase in recovery. The Sap, which is a fixed price by all Utter Pradesh sugar factories, was announced at rs.1150 per metric tnnoes for the sugar year of 2005-06.at the time of purchase of sugarcane financial department make the purchase journal voucher which have all the detail about the purchase of sugarcane. A fixed commission is to be given to the society agents by the company. Purchase journal vouchers have detail about the rate of sugarcane; quantity of sugarcane purchased etc. And according to the quality and quality of the sugarcane and according to the
government price company give the payment to the cane cooperative society and then society give the payment to the farmers. Company does not give the payment directly to the cane cooperative society rather then it all the payment of sugarcane is given by bank to the cane cooperative society and then society gives the payment to the farmers. At that time company’s finance department prepare the payment vouchers and bank vouchers. In Bank voucher department have to give all the details about the procurement of the sugarcane how much cane and what type of cane is procured by the company. At this time company have to give the projection of their project to the Bank and according to that projection bank give the money to the company on Pledge.Then according to that pledged money Bank give the payment to the cane comparative society according to the details and cane cooperative society gives the payment to the farmers according to their cane quantity and quality. Bank voucher has three types of accounts on the basis of requirement of bank and the company.
• • • Cash credit Bank overdraft account Current account
CASH CREDIT ACCOUNT: In this cash credit account company have to give the projection of whole project to Bank before starting the project and after starting the project and after starting the project company have to give the actual production or actual progress to the bank. Bank gives the money to the company on the basis of pledge of the company if company is not new. If company is new then Bank provide the loan or money according to the working capital of company. It is known as DEMAND LOAN. In cash credit bank has two type of limits. 1. Fund base Limit 2. Non-fund Base Limit Fund base limit as Loan and Non-Fund base limit as Bank guarantee.
BANK OVERDRAFT ACCOUNT: In bank overdraft account, bank gives a limit of money according to the money, which is already in the account of the company and time limit also for deposit that overdraft money. In this limit Company can take the money according to that overdraft limit. In this overdraft Account Company can take money from the Bank even there is no money in their original account according to that limit. This limit is known as SUB LIMIT. After the duration of Time Limit Company has to give the some money so that Bank can extend the time limit for further transaction. At this time Bank is treated as the Receiver.
CURRENT ACCOUNT: Current account is known as simple account or we can say it’s a daily-transacted account. It is an account in which company can withdrawal or deposit the money at any time, anywhere. In this account there is no limit of time or money. Company can withdrawal or deposit the money more then one time in one day.
Now company starts the production of sugar. Company has to produce the sugar according to the Grades. Grades are decided by the National Sugar Institute, Kalyanpur, Kanpur on basis of the performance of the company in last years. The commercial grading of sugar in India is based on grain size and colour categories. Currently 3-grain sizes and 3 colour series are identified.
We actively encourage the farmers in our cane areas to grow early maturing varieties of sugarcane, which have high sucrose content. We conduct sugar content analysis of sugarcane samples on a daily basis to have information base for our procurements and future development of high sugared sugarcane varieties. Some of these varieties are CoJ-64, CoS-88230 and CoS-8436, which are varieties which have been identified as early maturing sugarcane varieties by the government of Uttar Pradesh and the SAP is higher than the SAP for general varieties by Rs.3050 per metric tones for these varieties of sugarcane. The areas on which sugarcane with high sugar content is being grown in the Cane Areas of our sugar mills is detailed in the table below:
Khatauli Deoband Total land under% of land underTotal land under% of land under cultivation of sugarcane cultivation cultivation of sugarcane cultivation CoJ-64 17.20% CoJ-64 15.38% CoS-88230 10.94% CoS-88230 26.79% CoS-8436 3.11% CoS-8436 12.33% We are focussed on using varieties of sugarcane, which have higher sugar content for crushing in our sugar mills. The major varieties of sugarcane used in our sugar mills in Khatauli and Deoband and the amount used in the last three Sugar Years are as detailed in the table below:
Quantity (Thousand Metric Tonnes) Khatauli 2006-07 2007-08 2008-09
CoJ-64 CoS-88230 CoS-8436 CoS-767 CoS-84212 CoS-8432
251.0 293.8 320.4 1075.9 40.2 42.0
364.2 230.8 208.9 1074.7 3.0 30.8
377.6 266.8 57.6 913.1 3.0 31.5
198.7 150.0 343.4 909.6 3.0 7.0
230.9 222.2 302.3 717.0 3.0 3.3
309.5 352.2 367.4 360.8 2.2 3.0
The percentage wise breakup of the use of sugarcane varieties in our sugar mills in the last three Sugar Years, are as detailed in the table below: Percentage of total sugarcane crushed in Sugar Year (in %) Khatauli Deoband 2007 2008 2009 2007 2008 2009 CoJ-64 15.0 21.0 22.0 12.0 16.0 22.0 CoS- 88230 17.0 13.0 15.0 10.0 12.0 25.0 CoS-8436 2.0 2.0 3.0 20.0 23.0 26.0 In the Sugar Year 2005, at Khatauli we received approximately 33.00% of the sugarcane crushed by the factory at the gate of our sugar mill and 67.00% of the sugarcane crushed was procured through 220 sugarcane collection and purchase centers. In Deoband unit we received 47% of the total sugarcane crushed at the gate of our plant and 53% from collection and purchase centers. At our Ramkola unit we received 70% sugarcane at the gate of our sugar mill and 30% from the collection and purchase centres.We actively encourage the farmers in our cane areas to grow early maturing varieties of sugarcane, which have high sucrose content. We conduct sugar content analysis of sugarcane samples on a daily basis to have information base for our procurements and future development of high sugared sugarcane varieties. Some of these varieties are CoJ-64, CoS-88230 and CoS-8436, which are varieties which have been identified as early maturing sugarcane varieties by the government of Uttar Pradesh and the SAP is higher than the SAP for general varieties by Rs.3050 per metric tone for these varieties of sugarcane. The areas on which sugarcane with high sugar content is being grown in the Cane Areas of our sugar mills is detailed in the table below:
Khatauli Deoband Total land under% of land underTotal land under% of land under cultivation of sugarcane cultivation cultivation of sugarcane cultivation CoJ-64 17.20% CoJ-64 15.38% CoS-88230 10.94% CoS-88230 26.79%
We are focussed on using varieties of sugarcane, which have higher sugar content for crushing in our sugar mills. The major varieties of sugarcane used in our sugar mills in Khatauli and Deoband and the amount used in the last three Sugar Years are as detailed in the table below:
Quantity (Thousand Metric Tonnes) Khatauli 2006-07 2007-08 2008-09 CoJ-64 251.0 364.2 377.6 CoS-88230 293.8 230.8 266.8 CoS-8436 320.4 208.9 57.6 CoS-767 1075.9 1074.7 913.1 CoS-84212 40.2 3.0 3.0 CoS-8432 42.0 30.8 31.5
Deoband 2006-07 198.7 150.0 343.4 909.6 3.0 7.0
2007-08 230.9 222.2 302.3 717.0 3.0 3.3
2008-09 309.5 352.2 367.4 360.8 2.2 3.0
The percentage wise breakup of the use of sugarcane varieties in our sugar mills in the last three Sugar Years, are as detailed in the table below:
Percentage of total sugarcane crushed in Sugar Year (in %) Khatauli Deoband 2007 2008 2009 2007 2008 CoJ-64 15.0 21.0 22.0 12.0 16.0 CoS- 88230 17.0 13.0 15.0 10.0 12.0 CoS-8436 2.0 2.0 3.0 20.0 23.0
2009 22.0 25.0 26.0
In the Sugar Year 2005, at Khatauli we received approximately 33.00% of the sugarcane crushed by the factory at the gate of our sugar mill and 67.00% of the sugarcane crushed was procured through 220 sugarcane collection and purchase centers. In Deoband unit we received 47% of the total sugarcane crushed at the gate of our plant and 53% from collection and purchase centers. At our Ramkola unit we received 70% sugarcane at the gate of our sugar mill and 30% from the collection and purchase centers.
The commercial grading of sugar in India is based on grain size and colour categories. Currently 3-grain sizes and 3 colour series are identified.
GRADE L M S
GRAIN SIZE > 1.70 - mm 1.18 - 1.70 mm 0.60 - 1.18 mm
APPROX. ICUMSA COLOUR UNITS
31 30 29 Khatauli Sugar Quality
< 100 100-150 29 >150
In India bold grain carries a premium. Keeping this in mind, the Khatauli unit produces sugar of bolder grain of low colour value. The production is categorised as following (figures are approx. as they vary every year)-
L-31 20% M-31 70% S-31 10% Sugar is statutorily required to be packed in 100 Kg twill jute bags.
Now, company starts the production of sugar. There is a need of Licensing for the production of Sugar, which is given by District Supply Office (D.S. Office). For the production of sugar there is a need of cane crushing. With the help of cane crushing sugar is produced.
Sugarcane crushed (MMT)
1.48 10.46 0.155 160
1.62 10.13 0.164 181
Average recovery rate (% of sugarcane crushed) 10.19 Sugar produced from cane (MMT) Sugar produced from raw sugar (MMT) Number of days in operation 0.141 175
IN 2005-2006, the company added sugar capacity of 15250 TCD.
Capacity added during 2005-06
Capacity as on 31-03-2006
Khatauli Deoband Sabitgrah (New unit)
4250 tcd 4000 tcd 7000 tcd
16000 tcd 14000 tcd 7000 tcd
Key Efficiency Figures
Following key efficiency figures have been determined to assess the performance of the factory. Results of Khatauli unit falls in close vicinity of the best obtained. Some of the results are summarized as below: EFFICIENCY DATA
CRUSH DMF JAWA RATIO CLARIFICATION EFFICIENCY MILL EXTRACTION RME BOILING HOUSE EXTRACTION ROA EXTRACTION RBHR TOTAL LOSSES SUGAR RECOVERY MOLASSES RECOVERY SUGAR PRODUCTION
11,000 - 12,000 Tonnes Per Day 70 -72 81 - 83 1.7 - 2.1 95.6 - 96 96 - 96.2 87 - 88 87 - 88 91 - 92 1.90 - 1.95 10 - 11 % 4.5 - 5 % 1,80,000 Tonnes per annum ( Approx.)
Khatauli unit has the capacity of sugarcane crushing is 8500 tcd in 2008-09 and 11400 tcd in 2005-06 and wanted to expend this to 16000 tcd in 2006-07.
Triveni produces two type of Sugar. 1. White Sugar 2. Branded Sugar
Triveni produces plantation white sugar through the double sulphitation process. Sugar accounted for 70 % of the Company’s revenue in 2005-06. The company posses the capacity of 40,500 tcd spreads across its Khatauli, Deoband, Ramkola and Sabitgarh units. The company expects cane supply to be based on mill’s capacity and therefore expects cane allocation to be increased from the 2006-07-sugar season.
The Company’s branded sugar is manufactured in Khatauli and marketed under the Shagun Brand. During the year under review, the off take of Branded sugar increased by 44 % to 6522 MT. While the market of branded sugar is not large, demand is increasing due to increased urbanization and life style changes.
After the production of sugar, company sale their sugar. All sugar is taking place through agents and Banks. The Indian Government follows a dual pricing policy, under which a fixed proportion of production is to be sold by the sugar companies to the public distribution system at a fixed price (Levy Sugar). This price varies from region to region and the sugar directorate (under the ministry of consumer affairs, Food and Public distribution) releases this quantity in favor of the various states. Interestingly, there has been a decline in sales through the Public Distribution System as the Levy sugar has declined from 60 per cent in the early 1980s to 10 percent effective from March 2002 (according to the government’s Revitalization Report). The balance of sugar (free sugar) can be sold in the open market, is not subject to the Levy, the government continuous to regulate sales through a release mechanism, determining the amount of sugar that can be sold each month. A turnaround in free sale sugar realizations commenced in February 2004, with subsequent increases in May 2004 and January 2005 (Indian Sugar Mills Association data). Triveni’s realizations were higher than the all India average due to a combination of regional, quality, colour and crystal size factors. On average, domestic sugar prices strengthened in 2008-09 and demand-supply forecasts indicate that they could remain firm over the coming two years.
Ex-Factory Prices of Free Sale Realizations:
(Rs/MT/sugar) October November December January February March April May June 2006-07 11600 11140 10810 10710 10660 10540 10650 10580 10810
2007-08 11290 12030 11770 11660 12930 12770 13420 13990 14220
2008-09 14710 14650 15360 16630 16530 16500 16640 16650 16620
July August September Average
11810 12590 12340 11190
14060 14650 14720 13210
16710 17110 17010 16260
India’s Sugar Import Policy:
The upturn in India’s sugar cycle is a direct result of the forward-looking policies of the Ministry Of Food, Government of India. There have been instances in the past when a sugar shortage in India was followed by a reduction in customs tariff, allowing an enormous quantity of white sugar to flood the market and trigger a steep fall in sugar prices. This time the government permitted only the import of raw sugar-by-sugar factories- not traders- with an export obligation under the Advance License Scheme, one of a number of policies to ensure long-term price stability, given the temporary imbalance between production and consumption. In 2008-09, government policies ensured that sugar prices remained at reasonable levels, which improved industry viability and resulted in a record, timely and even retrospective payments to sugar cane growers, a win-win proposition. This encouraged nationwide sugarcane planting and will translate into higher output, notwithstanding a lower-than-average monsoon.
Levy Sugar Prices:
Under the provision of sub-section © of section 3 of the Essential Commodities Act, 1955, the ex-factory prices of levy sugar are determined each year by the Ministry of Food and Civil Supplies, Government of India. The current ratio of free-to-levy sugar is 90:10 i.e. 10 per cent of the sugar produced is to be sold at prices fixed by the Government for different levy price zones in the country. Every month, a fixed quantity is released to each factory in respect of specified buyers nominated by the Central Government. In U.P., there are three levy price zones: while the Khatauli and Deoband factories figure in the Western U.P. price zones, Ramkola figures in the Eastern U.P. price zones. The levy price for West U.P. was Rs 1275.92 per quintal and Rs 1383.41 per Quintal for East U.P.
Statutory Minimum Sugarcane Price (SMP):
This price is determined by the Central Government on the basis of Clause 3 of the Sugarcane (control) Order, 1966 with respect to each sugar season. The Government fixes the price considering the recommendations by the Commission for Agriculture Costs and Prices. The SMP for 2008-09 seasons was fixed at Rs. 74.50 per quintal corresponding to a base recovery of 8.5 percent. The previous season’s average recovery for each sugar unit was used to determine what SMP payment needed to be made by each factory, calculated on the basis of Rs 0.88 per quintal for an every 0.1 per cent increase in recovery over 8.5 per cent. The SMP for Khatauli, Deoband and Ramkola units were fixed at Rs 89.46 per quintal, Rs 92.10 per quintal and Rs 87.70 per quintal respectively. For the purpose of extra sugarcane payments to growers above the SMP, a formula of sharing sugar realizations with the growers has been prescribed under Sugarcane Control Order, 1966.after the ‘L’ factor (representing the cost of production) based on the SMP is announced by the Government (which invariably comes some two or three years later), the cost based on the ‘L’ factor is subtracted from the actual realization of sugar; 50 per cent of this extra amount is shared with growers. In reality, factories in U.P. invariably pay much more than what is warranted by this formula as State Advised sugarcane Prices (SAP) announced by the U.P. government are higher than the 50 per cent sharing payable.
State Advised Price:
A majority judgment of the Supreme Court dated 5 May 2004 held that the State Government in U.P., in exercise of its regulatory power as contained in the U.P. Sugarcane (Regulation of Supply and Purchase) Act 1953, could fix the price of sugarcane. A review petition field by ISMA, highlighting the inconsistencies with an earlier unanimous decision of a five-judge bench of the Supreme Court of 1956 in Ch. Tikaramji’s case, and other specific constitutional
points, was turned down. The U.P. Government announced an SAP higher than that paid by the industry in 1996-97, 2006-07 and 2007-08. On a demand made by the sugarcane societies and the U.P. Government, Triveni made all these payments for its three sugar units under protest, making it one of a handful of such factories in U.P. to have done so.
U.P. Government Sugar Policy:
To encourage investment in the sugar industry, the U.P. Government announced Sugar Industry Incentive Policy 2004 during the year under review. It spelt out the following: • The sugar industry as the most important industry in the state and sugarcane as its principal
cash crop, supporting the livelihoods of 3.2 mn farmer families and a labour force of 160000 directly or indirectly in the state. • The industry’s position as a driver of social and economic growth in the locations of its
presence. • The identification of various ancillary or downstream industries like sugar machinery,
distilleries, electricity co-generation, ethanol and bio-fertilizers as being linked with the industry. • tax. • The reservation of almost 2.3 mn hectares for U.P. sugar mills, accounting for 124 mn tones The contribution of almost Rs 4 bn to the Indian and state exchequer via excise and purchase
of sugarcane (almost 42 per cent of the national production). • The use of only 41.04 per cent of the sugar cane produced in the state by the sugar industry,
the rest going to gur, Khandsari, seed, juice, cattle feed and chewing. • The need to produced 7.5 mn tones of sugar by 2010-11 through enhanced cane drawal to
fulfill the country’s increased appetite for the commodity.
The planned special incentive policy for the entry of private mills into sugar manufacture due
to a funds constraint among the government and co-operative sectors. • An estimated capital requirement of Rs 20 billion to fund the new plants for which a special
incentive package may be required.
For being eligible for the incentives, the government announced the following guidelines: • Minimum one time capital investment of Rs 3.5 bn or phased (from2008-09) capital
investment of Rs 5 bn; to commence commercial production by 31 march 2007. • Eligibility covering the setting up of new sugar units, expansion of existing sugar capacity and
related projects (ethanol/alcohol from molasses as well as co-generation from bagasse). • Provision of monetary benefits in the form of capital subsidy and various incentives on the
cane purchase and sugar and molasses sale. The government announced that these incentives would be provided only after the company or the unit cleared all its sugar cane dues to farmers. For an investment of over Rs 3.5 bn, the incentive would be applicable for five years; for an investment over Rs 5 bn, the incentive would be applicable for ten years with a provision that proceeds from the overall incentive did not exceed the capital investment. Triveni intends to take advantage of this scheme.
The domestic price of sugar is expected to stay firm over the foreseeable future on account of the following factors: inventory is expected to stay under control due to increased consumption and rising exports; international sugar prices are expected to remain buoyant. Some times saleable price is decided according to the average rate (Rate of last 1 year+2year+3 year) / 3.
MARKETING AND DISTRIBUTION
The company markets major parts of its output across Gujarat, Rajasthan, Punjab, Utter Pradesh, Delhi and West Bengal through a network of 23 agents, each enjoying an average relationship of over 25 years with the company.
TAX / DUTY
1800 / beg
1800 / beg
1277.49(by rail) 1275.92(by road)
1277.49(by rail) 1275.92(by road)
71 / beg
71 / beg
38 / beg
38 / beg
14 / beg
14 / beg
14 / beg
14 / beg
Educational Cess on duty
2.25 / beg
Company also has to give a commission of 0.50% to the agent on the amount of sugar plus excise duty on sugar.
If sale is above then 4,00,000 then company pay service tax plus cess on service tax.
Service tax is 10% plus 2% cess on service tax till 17 April and after 17 April 12% plus 2% cess on service tax.
Company has to pay 4% Trade tax also. Impart of Sugar Company also sale the MOLASSES. Molasses is also a very important product, which is come after the production of sugar. Molasses is used for the distillery. Company has a distillery unit in Muzaffarnagar.there are two type of molasses sale.
Free sale. (80%) Levy sale. (20%)
TAX / DUTY FREE SALE 80% Basic rate 225/beg LEVY SALE 20% 225/beg
UP administration charges Educational cess on duty C.S.T.
11/beg 2%(1.50/beg) 4%
11/beg 2%(1.50/beg) 2.5%
Company also has some other type of sales. • • • Scrap sale Press mud sale Baggasse sale
TAX/DUTY Rate Trade tax State development tax TCS UP SALE As per order 5% 1% 1.02% CENTRAL SALE As per order Against C format 4% or 10 % NIL 1.02%
TAX/DUTY Rate Trade tax State development tax TCS
UP SALE As per order Nil Nil Nil
CENTRAL SALE As per order Against C format at 4% or 10% NIL NIL
TAX/DUTY Rate Trade tax State development tax TCS
UP SALE As per order Nil Nil Nil
CENTRAL SALE As per order Against C format at 4% or 10% NIL NIL
There are some important points, which are necessary to understand or have to keep in mind by the customers about the company. • • Company has their sale office in New Mandi, Muzaffarnagar. Each and every agent or customer has to pass there through this office. • • After passing the bill, bill comes in the company. Then company prepares a sale voucher and sends all details of sale to the bank.
Then sale takes place and bank receives the money from the agent or customers. After this whole process starts from the procurement of sugar cane and payment of the sugarcane to the sale of sugar and receiving the payments from agents or customers, Bank deduct the payment from the receives amount and their interest or commission, give the rest money or
balance to the company. This receivableable amount, which is getting by the company, is known as the profit of the company.
WORLD SUGAR BALANCE:
(October/ September) SUGAR 2005-06 2006-07 1000tonnes, raw value 2007-08 2008-09 2008-09
Cl. Stock/ Consumption (%)
2006-07 Opening 11.3 2007-08 11.6 2008-09 8.5
MMT 2008-09 4.8 2006-07 (p) 4.2 2007-08 (p) 5.6
Stock Production Imports Total available Local Consumption Exports Total Dispatches Closing Stock Closing Stock/ Consumption (%)
20.2 0.0 31.5 18.3 1.5 19.8 11.6 63.4
14.0 0.4 26.0 17.3 0.2 17.5 8.5 49.1
12.7 2.1 23.3 18.5 0.0 18.5 4.8 25.9
19.0 0.0 23.8 19.1 0.5 19.6 4.2 22.0
23.0 0.0 27.2 19.6 2.0 21.6 5.6 28.6
24.0 0.0 29.6 20.2 2.5 22.7 6.9 34.2
DATA ANALYSIS AND INTERPRETION
Proportion of distribution of produced sugar
Proportion of distribution of Molasses
Quantity of cane crushing in a particular unit / day
Percentage of use of the different way in distribution of produced sugar
Contribution of a particular state in generating the sales revenue
Percentage of total profit contributed by the sugar business in respect of other businesses of the company
Percentage of total profit contributed by the sugar business in respect of other businesses of the company
The per capita sugar consumption in different countries
The percentage role of banks played in the payment of sugarcane payment
Sweet affects the sale of sugar
Extent raw sweet affects the sale of sugar
The percentage of sugar production in each unit
Percentage contribution of profit given by each unit
Company gives any commission to the agents of the company
CHART 16 Percentage of sale of sugar in Utter Pradesh with respect to other states
Type of sugar does the company produce
Mode of sugar payment by agents
Type of transportation facility you have
CHART 20 The time spending in between the delivery of sugar and payment of sugar
Agents give the payment of sugar
The problems being faced by me during this were as follows: • • Appointment problems with the customers. Time duration of the project as the whole project was to be done in the stipulated time of two months. • • • • • Customer’s incorporation sometimes. Hot and humid climate Non-cooperation of farmers. Certain other constrains affecting the study. Concealment of certain trade secrets and trade facts affects my understanding towards the working of the sugar industry which in return affect my financial analysis up to the extend.
• Sometimes gap between top-level management and lower level management may cause some harmful results. So proper steps should be taken to reduce this communication gap. • • • Proper empowerment. Sufficient number of computers should be there. Company should take the help of the cane society and local administrative authority of their area to avoid unhealthy competitions. • Company should arrange sufficient number of trucks at centers to avoid accumulation of cane purchased. • • Company should have their own transportation. Company should improve the supply chain management.
Try to get the payment as early as possible by giving the various discount.
The conclusion of whole project “Financial Analysis of Sugar Production and sale” is that Triveni Engineering and Industries Limited is one of the largest sugar producers of India. The revenue of sugar business is 70 % in respect of other businesses of the company. Company has many sugar plants in west U.P. and East U.P. also in which total cane crushing is 40,500 tcd in 2005-06. In all the plants Khatauli plant has the largest cane crushing is 16000 tcd and in Deoband plant 14000 tcd. These two plants gives the maximum revenue to the company.
There are twelve types of risks in the company and so many technologies are used by the different divisions of the company. Company’s sugar plant gives the highest profit with the help of large sugar production. Company produces two types of sugar – Branded Sugar and white Sugar. Sugar prices are decided by the government under the U.P. Sugar Policy. Company sales their sugar in the different states of the country as Haryana, Punjab and Rajasthan etc.
The performance of the company in year 2005-06 is:
• • • • • •
Net Sales EBIDTA Profit after Tax Earning Per Share Book Value Total Debt / Equity ratio
11920.37 Million 2130.00 Million 1314.96 Million 5.98 Million 19.83 Million 0.79 Million
The overall working of the factory during the year 2005-06 was considering satisfactory.
• • •
www.google.com www.trivenigroup.com Annual Report 2008-09. (Triveni Engg. And Ind. Ltd) Annual Report 2007-08. (Triveni Engg. And Ind. Ltd) Economic Times
Name : ………………………………………… ………………………………………… …………………………………………. Address: Phone No.:
Q1) Free Levy
What is the proportion of distribution of produced sugar?
Q2) Free Levy
What is the proportion of distribution of Molasses?
What is the quantity of cane crushing in a particular unit / day?
Khatauli Deoband Ramkola Sabitgarh
what is the Percentage of use of the different way in distribution of produced sugar?
What is the contribution of a particular state in generating the sales revenue?
Utter Pradesh Punjab Rajasthan Haryana
What is the Percentage of total profit contributed by the sugar business in respect of other
businesses of the company?
In 2008-09 Sugar Other
In 2007-08 Sugar Other
What is the per capita sugar consumption in different countries?
Brazil Pakistan India Africa
what is the percentage role of banks played in the payment of sugarcane payment?
Bank Role Company Role
does raw sweet affects the sale of sugar?
Q10) Up to what extent raw sweet affects the sale of sugar?
Affects Not Affect
Q11) What is the percentage of sugar production in each unit?
Khatauli Deoband Ramkola Sabitgarh
Q12) What is the percentage contribution of profit given by each unit?
Khatauli Deoband Ramkola Sabitgarh
Q13) Does company give any commission to the agents of the company?
Q14) What is the percentage of sale of sugar in Utter Pradesh with respect to other states?
U.P. Sale Central sale
which type of sugar does the company produce?
S-31 M-31 L-31
What is the mode of sugar payment by agents? a
In cash In credit By check Partially by check and credit
Q17) Which type of transportation facility you have?
Own facility Hired
Q18) What is the time spending in between the delivery of sugar and payment of sugar?
With in 7 days With in 15 days With in 30 days
Q19) To whom agents give the payment of sugar?
To Bank To Company
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.