Asian Tea & Exp Management Discussions


WORLD ECONOMIC OVERVIEW:

Global growth is projected to fall from an estimated 3.5 percent in 2022 to 3.0 percent in both 2023 and 2024. The rise in central bank policy rates to fight inflation continues to weigh on economic activity. Global headline inflation is expected to fall from 8.7 percent in 2022 to 6.8 percent in 2023 and 5.2 percent in 2024. Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward.

INDIAN ECONOMIC OVERVIEW:

The Survey notes with optimism that Indian economy appears to have moved on after its encounter with the pandemic, staging a full recovery in FY22 ahead of many nations and positioning itself to ascend to the pre-pandemic growth path in FY23. Yet in the current year, India has also faced the challenge of reining in inflation that the European strife accentuated. Measures taken by the government and RBI, along with the easing of global commodity prices, have finally managed to bring retail inflation below the RBI upper tolerance target in November 2022.

OUTLOOK

The company has achieved business turnover of Rs.331.898 Million in Current financial year compared to Rs.736.512 Million in 2021-22. The company has incurred a Loss of Rs.42.746. Million in Current financial year compared to Rs.5.79 Million in 2021-22. The company has incurred a consolidated loss of Rs. (5.44) Million in 2022-23 as compared to Rs.28.654 Million in 2021-22.

OPPORTUNITIES AND THREATS

The Company is consolidating business opportunities in tea and pulses. Changing government regulations on trade of pulses would determine future growth of the business.

SEGMENT WISE PERFORMANCE

The Company is engaged in the trading of tea, rice and pulses.

BUSINESS OUTLOOK

Outlook remains stable for the current year.

RISK AND CONCERNS

Consistent quality is an important factor for achieving good price. Fluctuation in foreign exchange rate is also a cause of concern.

Increase in employees cost with accrual liability for retirement benefits is a cause of concern.

INTERNAL CONTROL SYSTEM

The Company has an adequate system of internal control commensurate with the size and nature of its business. The suggestions, recommendations and implementation of the Internal Audit are placed before the Management and the Audit Committee.

The Company has appointed M/s. Arya Agarwal & Associates., Chartered Accountants for conducting internal audit of various activities in order to monitor the performance of the Company on a continuous basis. The management regularly reviews Internal Audit Reports to monitor the effectiveness of internal controls in place. The Audit Committee of the Board continuously reviews the significant observations, if any, of the Internal and Statutory Auditors on financial and accounting controls as well as statutory compliance matters.

RATIOS

Comparative analysis of Important Ratios with variance is tabulated below:

S. No Descriptions Ratios (current Year) Ratios (Previous Year) Variance (%) Reason of Significant variance
1 Debtors Turnover Inventory 2.55 1.81 40.49 Due to covid there was a delay in receiving payment from debtors resulting in decrease in Trade Receivable ratio. Due to decrease in sales due to restrictions imposed on
2 Turnover 4.81 7.84 (38.74) imports, Inventory turnover ratio has decreased.
3 Net Capital Turnover Ratio 1.17 3.33 (64.89) Due to increase in working capital from right issue and drop in turnover during the year, Net capital turnover ratio has decreased. Due to availability of working capital from right issue and
4 Current Ratio 2.55 1.81 40.49 realization of debts, current ratio has improved. Due to decrease in
5 Debt Equity Ratio 0.45 0.79 (40.49) shareholders equity and repayment of debts, debt equity ratio has improved. Return on Investment has
6 Return on Investment (0.88) 0.79 (211.09) decreased due to increase in capital from right issue and loss in the current year. Due to drop in sales and fixed
7 Net Profit Ratio (1.27) 0.82 (256.62) cost remaining same there was a loss during the year resulting in negative Net profit ratio. Return on capital employed
8 Return to Capital employed 4.18 5.33 (21.53) has decreased due to increase in capital from right issue and drop in sales during the year.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE WORKING CAPITAL

During the year the Average Working Capital of the Company has increased from Rs.280.42 million to Rs.219.37million in Financial Year 2022-2023.

ACTIVITY ANALYSIS

During the Year the turnover of the Company has decreased from Rs.736.512 million to Rs.331.898 Million in Financial Year 2022-23.

PROFIT ANALYSIS

During the year, the Company has incurred a loss of Rs.42.74 6million. Compared to last year profit Rs.5.79 million Financial Year 2022-23.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Directors believe that human resource is the most important asset and also a source of competitive advantage. Efforts are being made to design and implement an effective staff policy in the Company in order to foster a culture of harmony, learning, sense of belongingness and care. The relations of the Company remained cordial and harmonious throughout the year.

CAUTIONARY STATEMENT

This report includes forward looking statements and assessments that involve risks and uncertainties. Actual results might differ materially from those expressed or implied.

For and on Behalf of the Board

Registered Office:
4/1, Middleton Street, Sd/- Sd/-
Sikkim Commerce House Hariram Garg Sunil Garg
5th Floor, Kolkata-700071 (DIN: 00216053) (DIN: 00216155)
Date: 30th May 2023 Managing Director Director