NEW DELHI (India CSR): In a year marked by significant headwinds for the sugar industry, Ponni Sugars (Erode) Limited has demonstrated a steadfast commitment to its surrounding community, exceeding its Corporate Social Responsibility (CSR) spending obligations for the financial year ended March 31, 2025. The company’s latest Annual Report reveals that despite facing operational pressures from drought, lower cane crushing, and squeezed margins, it invested significantly in various community welfare projects, underscoring its role as a key driver of rural development in its area of operation. This dedication highlights a human-centered approach, prioritizing the well-being of farmers, laborers, and residents who form the backbone of its operations, even when the sweet taste of profit is diminished.
Meeting and Exceeding the Mandate
As per the requirements of Section 135 of the Companies Act, 2013, Ponni Sugars (Erode) Limited is mandated to undertake CSR activities. This obligation became applicable to the company from FY 2017-18. For the financial year 2025, the company’s average net profit, calculated as per the requirements of the Act, was Rs 418.2 crore. Based on this, the statutory 2% of the average net profit amounted to Rs 84 lakhs. The company was also able to set off Rs 21 lakhs of excess amount spent and carried forward from previous financial years. Consequently, the net CSR obligation for FY 2025 was Rs 63 lakhs [(b)+(c)-(d)].
In a strong affirmation of its commitment, Ponni Sugars reported a total CSR expenditure of Rs 82 lakhs for the financial year 2025. This expenditure comfortably exceeded the net obligation of Rs 63 lakhs. While the spending was slightly less than the full 2% of average net profit (Rs 84 lakhs), resulting in a Rs 2 lakhs difference, the company had a significant carry-forward from previous years. The final calculation shows an amount of Rs 19 lakhs available for set-off in succeeding financial years, demonstrating a consistent over-commitment to CSR over time. The auditors’ report specifically confirms that the company spent the minimum amount required and that there was no unspent amount requiring transfer to a special account.
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Table: Ponni Sugars (Erode) CSR Spending FY 2025
| Parameter | Details |
|---|---|
| Average Net Profit (FY 2021-22 to 2023-24) | Rs 418.2 crore |
| Statutory CSR Obligation (2% of Avg. Profit) | Rs 84 Lakhs |
| Excess CSR Spent in Previous Years (Carry Forward) | Rs 21 Lakhs |
| Net CSR Obligation for FY 2025 | Rs 63 Lakhs (after adjusting carry forward) |
| Total CSR Amount Spent in FY 2025 | Rs 82 Lakhs (Exceeds Net Obligation) |
| Excess CSR Available for Future Set-Off | Rs 19 Lakhs |
| Major Focus Areas | Irrigation Infrastructure, Community Development, Education, Drinking Water, Veterans’ Welfare |
| Top CSR Spending Category | Rural Irrigation Infrastructure – Rs 48 Lakhs |
| Other Key Areas | Community Development – Rs 23 Lakhs, Primary Education – Rs 9 Lakhs, Safe Drinking Water – Rs 1 Lakh, Veterans’ Welfare – Rs 1 Lakh |
| Unspent CSR Funds | Rs 0 (All obligations fulfilled; no transfer required) |
| CSR Oversight Committee | N Gopala Ratnam (Chairman), N Ramanathan (MD), Chellamani Naresh (ID) |
| CSR Committee Meeting Date | March 21, 2025 |
| Nature of Projects | All funds used for non-capital, community-centric activities |
Where Community Investments Flowed
The Rs 82 lakhs allocated to CSR activities in FY 2025 were directed towards several key areas aligned with the company’s policy and Schedule VII of the Companies Act, 2013. The distribution reflects a focus on initiatives that directly impact the rural community surrounding the company’s operations in Tamil Nadu:
1. Supporting Irrigation Infrastructure in Rural Area: This was the largest area of spending, receiving Rs 48 lakhs in FY 2025. This represents a significant increase from the Rs 40 lakhs spent in the previous year, FY 2023-24. Given the context of water-stressed conditions and failed monsoons impacting sugarcane availability and quality, investment in irrigation infrastructure is particularly relevant and impactful for the company’s farmer base. The company has a history of supporting Lift Irrigation Schemes to bring dry lands under cultivation.
2. Community Development: Activities under this category received Rs 23 lakhs in FY 2025. This marks a substantial rise from the Rs 2 lakhs spent in FY 2023-24.
3. Primary Education for Children: The company spent Rs 9 lakhs on primary education for children in the rural area in FY 2025. This is a slight decrease from the 10 lakhs spent in the previous year, but continues the company’s long-standing initiative of running a primary school for children in the neighbourhood.
4. Provision of Safe Drinking Water: An amount of Rs 1 lakh was allocated for providing safe drinking water in rural areas during FY 2025. No specific amount was reported for this category in FY 2023-24.
5. Measures for the Benefit of Armed Forces Veterans: The company spent 1 lakh on initiatives supporting armed forces veterans in FY 2025. No spending was reported in this category in the prior year.
6. Other Areas: While the company’s policy includes health and agroforestry, there was no specific spending reported for “Support for primary health center in the neighboring village” or “Development of Agro forestry” in FY 2025, compared to Rs 5 lakhs and Rs 17 lakhs respectively in FY 2023-24. The source notes that spending was for purposes other than construction/acquisition of assets, and no capital assets were created or acquired through CSR funds in FY 2025.
The total expenditure of Rs 82 lakhs aligns perfectly with the sum of the spending reported across these detailed categories.
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A Long-Standing Commitment to Rural Welfare
Ponni Sugars’ engagement with social objectives predates the mandatory CSR requirements. The company, located in a rural area and deeply intertwined with the agro-based sugar sector, sees itself as a value creator for thousands of farmers and skilled/semi-skilled laborers in its vicinity. A significant portion—more than three-fourths—of its total revenue is distributed within its rural neighborhood through cane purchase, harvest and transportation costs, direct and indirect labor wages, and outsourcing.
The CSR policy, proactively adopted in February 2015 and last amended in March 2024, emphasizes working for the welfare and sustainable development of the community in and around the company’s operational area. Beyond the specific spending areas for the year, the company has ongoing initiatives such as running a primary school and supporting the establishment of three Lift Irrigation Schemes. These irrigation schemes are particularly noteworthy as they utilize treated trade effluent from a neighboring paper mill to irrigate approximately 950 acres of dry land, transforming waste into wealth and bringing land under cultivation. The company also contributes to Central and State Government Relief Funds when called upon.
Overseeing the Initiatives
The company has a dedicated CSR Committee comprising Directors to oversee its social responsibility initiatives. For FY 2025, the committee consisted of N Gopala Ratnam (Chairman), N Ramanathan (Managing Director), and Chellamani Naresh (Independent Director). The committee met once during the financial year on March 21, 2025. The composition of the CSR Committee, the CSR Policy, and approved CSR projects are disclosed on the company’s website.
Resilience Amidst Challenges
The company’s decision to maintain a strong level of CSR spending comes in the context of a difficult year for its core sugar business. The Board’s Report notes that failed monsoons severely impacted cane planting, leading to escalated pest and disease attacks on standing crops. This resulted in a contraction of cane crushing by over 20% and a capsizing of sugar recovery to 9.17%. Consequently, sugar production fell by a quarter. Higher cane costs, including additional support paid to farmers as a goodwill gesture, further squeezed operating margins. Despite these “bitter” performance results in the sugar segment, the company’s relatively stronger performance in the cogeneration segment and a focus on cost optimization and operational excellence helped stem the slide in net operating margin. The ability to spend Rs 82 lakhs on community development in such a year underscores the company’s sound financial health and commitment to its stakeholders beyond just shareholders.
Ponni Sugars (Erode) Limited’s CSR spending of Rs 82 lakhs in FY 2025, exceeding its net obligation and demonstrating a continued focus on rural development, highlights its deep connection and commitment to the communities where it operates. The investments in irrigation, education, and community development are crucial steps towards fostering sustainable development, particularly important given the agricultural nature of the business and the recent challenges faced by local farmers.
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FAQ: Ponni Sugars (Erode) Limited
1. How much did Ponni Sugars (Erode) spend on CSR in FY 2024-25?
The company spent Rs 82 lakhs on CSR activities in FY 2024-25.
2. What was Ponni Sugars’ CSR obligation for FY 2024-25?
The net CSR obligation was Rs 63 lakhs after setting off excess from previous years.
3. Which area received the highest CSR allocation?
Irrigation infrastructure received the highest allocation of Rs 48 lakhs.
4. Did Ponni Sugars exceed its CSR mandate?
Yes, the company spent Rs 19 lakhs more than its net CSR obligation.
5. What are the key focus areas of Ponni Sugars’ CSR initiatives?
Key areas include irrigation, community development, education, and rural welfare.
(India CSR)
