Upper Ganges Sug Chairman Speech

Dear Shareholders,



Most businesses face uncertainty and a swing in fortunes given the

vagaries of the macroeconomic environment. That is the very nature of

enterprise and risk-taking ability. However, it is not often that an

industry that is the source of livelihood of six million farmers,

contributes nearly 17% to global production, and covers an area equal

to 3% of the gross cultivable area of a large country like India Is

constantly reeling under structural problems.



Globally, sugar Is an Important agrl-based Industry. However, surplus

stocks, bumper production, currency fluctuations and other factors have

led to a gradual decline in sugar realisations. In 2014-15, global

sugar prices remained subdued, though sugar surplus is witnessing a

decline from 2.6 million tonnes in 2013-14 to 0.6 million tonnes in

2014-15. However, consecutive surplus years, worldwide high stocks and

the decline of the Brazilian currency against dollar have contributed

to keeping prices low. While this is good for consumers, it Is not good

either for the Industry or the farmers in the long run.



In 2014-15, Indian sugar industry was hit by several structural and

regulatory challenges. The industry saw marginal rise in demand and

higher production from 24.4 million tonnes in 2013-14 to 28.3 million

tonnes in 2014- 15. This led to an oversupply of sugar, facilitating

increase in carry forward stocks of nearly 10 million tonnes at the

year end.



The Indian sugar industry is facing its most daunting challenge to

date. The unbalanced sugar policy has taken its toll on the

fundamentals of the industry. The Indian economy is witnessing record

production of sugar due to larger increase of sugarcane acreage on the

one hand and falling sugar prices due to a glut in the market place on

the other. A shake out in the industry seems imminent and it is hoped

that the Governments, both in the Centre and the States, will take a

close relook at the existing sugar and sugarcane policy.



The global scenario too Is under pressure due to falling crude prices

resulting In lower ethanol production and higher sugar production.

International sugar prices have been under pressure due to global

surplus as a result of which Indian exports have not been able to make

significant inroads into the international market place.



Closer home, in India too, a reviving economy and higher prosperity

levels are expected to drive sugar demand, going forward. If the

industry is relieved of the shackles of unreasonable and unrealistic

cane pricing, we believe that it can once again be the engine of value

creation and better livelihoods for millions of farmers.



Our performance



At Upper Ganges, we remained focused on our object to navigate through

tough times with resilience. In 2014- 15, our Revenue from Operations

(Gross) grew by 8%'' and stood at Rs. 88,618.97 lacs (Rs. 81,849.73 lacs

2013- 14) owing to an increase in the scale of operations. We reported

a net loss of Rs. 5,537.13 lacs against Rs. 1,939.38 lacs in 2013-14,

primarily attributed to subdued sugar sales realisation and high cane

prices. Looking back, we have undertaken multiple initiatives that

enabled better utilisation of raw material and increase in operational

efficiency.



Going forward, India will continue to remain one of the world''s largest

sugar producers and a sugar surplus country for a sixth season in a

row. Demand for sugar remains strong from domestic food and beverages

manufacturers and rising per capita sugar consumption. India''s

relatively strong economic growth and stable political situation, along

with rising income of the young population and changing consumer

expenditure trends are the key drivers for this rise in consumption.



We look forward to your continued support in our future journey.



Warm Regards,



Nandini Nopany



Chairperson