hanuman tea co ltd Management discussions

HANUMAN TEA COMPANY LIMITED ANNUAL REPORT 2004-2005 MANAGEMENT DISCUSSION AND ANALYSIS Industry Structure & Development The Tea Industry has been under severe strain for the past six years. The tea prices across all auction centers have been falling and production is increasing. The increasing no. of bought leaf factories has introduced inferior quality tea Into the market phase with result in pulling down the prices of better quality teas. Wages of tea plantation labour have been increasing each year as have the cost of subsided ration, free medical expenses and other social cost at the tea estate. Various banks and financial institution who have had NPAs in the tea industry do not want to extent further support to the tea sector. Performance Review Due to paucity of funds and militancy of work force of Ramjhora Tea Estate in Dooars continued to be under lockout. Sonajuli Tea Estate was selling its green leaf to outside tea states, as the tea-processing factory in Sonajuii was not operational. During the year a one-time settlement with the Centurion Bank was entered into Centurion Banks principal and interest figure were Rs.132513274/- and Rs. 5701422/- and the total amount paid by the Company under OTA Scheme was Rs. 25 lacs. Since the Company is registered under BIFR, we await the BIFRs decision on revival of the Company and fresh infusion of funds by banks and financial institution. Internal Control System The Company has adequate internal control system commensurate with the size of the Company and nature of its business. These control procedures ensure efficient use and protection of resources, compliance with established Company policies, guidelines and statutes. The internal control systems are reviewed at regular intervals through Management, Internal and Internal and Statutory Audits and the same are modified to blend with changing business environment. Cautionary Statement Statements made herein describing the Companys expectations or predictions are forward-looking statements. The actual results may differ from those expected or predicted. Prime factors that may make a difference to the Companys performance include market conditions, input costs, industrial relations, Government regulations, economic developments within and outside the country, settlement of debts with lenders, sanction of Rehabilitation Scheme try BIFR and other incidental factors and developments.