Asian Tea & Exports Ltd Management Discussions

Industry Structure and Development

The baseline forecast is for the world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023. A slight acceleration for advanced economies where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025 will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025. The forecast for global growth five years from now at 3.1 percent is at its lowest in decades. Global inflation is forecast to decline steadily, from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. Core inflation is generally projected to decline more gradually.

INDIAN ECONOMIC OVERVIEW:

The Survey makes a case for serving the agricultural sector better with some re-orientation of existing and new policies and states that it is one area ripe for and in need of such a pan-India dialogue. The Survey states that the payoff will be immense if India unties the knots that bedevil farm sector policies. More than anything else, the Survey states, it will restore faith in the self-confidence and ability of the state to steer the nation to a better future, apart from delivering socio-economic benefits.

Technological advancements and geopolitics are challenging the conventional wisdom. Trade protectionism, resource-hoarding, excess capacity and dumping, on shoring production and the advent of AI are narrowing the scope for countries to squeeze out growth from manufacturing and services.

The Survey called for a return to roots, as it were, in terms of farming practices and policymaking, can generate higher value addition from agriculture, boost farmers income, create opportunities for food processing and exports and make the farm sector both fashionable and productive for Indias urban youth. This solution can become sources of Indias strength and a model for the rest of the world - developing and developed.

OUTLOOK

The company has achieved business turnover of Rs 343.076 Million in Current financial year compared to Rs 331.898 Million in 2022-23. The company has incurred a profit of Rs 2.862 million in Current financial year compared to Loss of Rs 4.274 million in 2022-23.

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.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE WORKING CAPITAL

The disclosures under financial performance with respect to operational performance are covered by the respective sections i.e., "Financial Results" and "Review of Operations in the Directors Report".

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.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Comparative analysis of Important Ratios with variance is tabulated below:

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

ACTIVITY ANALYSIS

During the Year the turnover of the Company has increased from Rs. 331.898 million to Rs. 343.076 Million in the Financial Year 2023-24.

PROFIT ANALYSIS

During the year, the Company has incurred a profit of Rs. 2.862 million to last year loss of Rs 4.274 million in the Financial Year 2023-24.

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.