ai champdany industries ltd Management discussions

A. Industry Structure and Development:

The Jute Industry in India is 150 years old. India is the worlds biggest producer of jute, followed by Bangladesh. The cultivation of jute in India is mainly con ned to the eastern region of the country. The jute crop is grown in seven states West Bengal, Assam, Orissa, Bihar, Uttar Pradesh, Tripura and Meghalaya. West Bengal alone accounts for over 50% of the total raw jute production.

B. Opportunities/Threats, Risks & Concerns:

Opportunities

A) World over there is a move to reduce carbon foot prints and it augers well for the jute industry because of its products being bio degradable and environment friendly.

B) Government of India is by its Jute packaging Act has made it compulsory packing of food grains in jute bags thereby discoursing use of plastic bags.

Threats

1. Higher Raw Jute prices and low productivity with high wage cost is a cause for concern for the industry.

2. Shortage of skilled manpower is continuing for last several years which needs to be augmented to enhance capacities utilization which is at a low level currently.

C. Outlook:

The future prospects of the Jute industry, however, is bright due to the following:

1. Development of jute products for different uses.

2. Increasing awareness for Environment.

3. Ban on polythene and plastic bags

In the current year , the production of Raw Jute was higher than previous year. There fore The availability was easy .However, due to inadequate rains, the quality of raw jute was affected and availability of high quality jute was less resulting in the premium for higher grade jute going up . It is estimated that the carry over of jute mill be quite substantial .The sowing for the new season it is reported to be good therefore the availability for next year is expected to the comfortable, while the demand for hessian is sluggish but the demand for sackens bags is rebust.

With infusion of funds from the development of its closed unit, namely Shalimar, as enumerated in the directors report here in above, your company is taking necessary steps to pare down its Bank borrowing considerably as well as augment its capacity utilization in the manufacturing units. The company plans to revamp certain essential infrastructure and equipments so as to improve productivity, efficiency and optimize procurement of Raw jute, stores, spares, etc.

Moreover, your company being highly asset rich is having several parcels of land bank under its fold situated in and around Kolkata which were acquired almost three decades ago. The Company , as part of its program is continuously exploring the opportunities of monetization its non-core assets with an action plan to make the company completely debt free as well as to modernize its manufacturing process and infrastructure facilities with the objective of bringing back the company again in the growth trajectory, barring unforeseen circumstances.

D. Internal Control System & Adequacy:

The Company has an effective and adequate internal control system and procedures which are commensurate with its size and nature of business.The Internal control systems are designed in such way that all the assets are safeguarded and protected against loss and all transactions are authorized, recorded and reported correctly. The Audit Committee monitors and evaluates and reviews the Internal Financial Control systems of the Company. Regular Internal Audits and checks are carried out to provide assurance that the responsibilities at various levels are discharged effectively and that adequate systems are in place.

E. Financial Performance with respect to Operational Performance:

Sales / Income from operation was to Rs.47.14 Crore compared to Rs.44.05 Crore in the previous year.

The Company is trying to revive the operations at Wellington Jute Mill, Yarn and Weaving units at Rishra by appointing Senior Executives for improvement of operations. Besides, all feasible options are being evaluated as part of restructuring exercise.

F. Material Development in Human Resources/Industrial Relations Front:

The Company continues to rationalize its workforce and put emphasis on providing quality training under the Companys programme.

Yarn Unit and Libra Carpet Unit located at Choudwar, District Cuttack, Odisha, Weaving Unit at Rishra, Yarn and Weaving Unit at Konnagar continued to be under suspension of work.

G. Cautionary Statements:

Certain statements in this report may be construed as forward looking statements which have been made as required by laws and regulations, as applicable. There are several factors, which would be beyond the control of management and as such, may affect the actual results, which could be different from that envisaged.

		On Behalf of the Board
		M Agarwal
		(DIN06948015)
			Directors
Place:	Kolkata	L Jha
Dated: 30.05.2023		(DIN 08972636)