Bangalore Fort Farms Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The jute industry involves the cultivation, processing, and manufacturing of jute, a natural fiber derived from the plants of the Corchorus genus. Jute is primarily used for making various products, including sacks, bags, textiles, and other environmentally friendly goods.

The jute industry has been exploring new avenues for jute fiber utilization. Innovations in processing techniques have led to the production of finer and softer jute fibers suitable for textiles and fashion items.

With the growing global emphasis on sustainability, the jute industry gained attention due to its biodegradable and renewable nature. Jute is often seen as an environmentally friendly alternative to synthetic fibers and materials.

In jute-producing countries like India and Bangladesh, governments have shown interest in supporting the jute industry. Policies related to jute cultivation, processing, and export have been introduced to boost the sector and provide livelihoods to rural communities.

OVERVIEW OF THE COMPANY:

The Company is into Jute and Agro trading and has also entered into exports of Jute bags and accessories after setting up a unit in Falta SEZ. It has also spread hands in the import and export of metal handicrafts etc along with raw jute and merchandise, import, export of metal handicrafts, merchandise etc.

FINANCIAL PERFORMANCE:

Your Company could not declare any dividend to the shareholders of the company due to inadequacy of the profits. However, the management is confident that in coming years the company would be in a position to declare strong financials.

BUSINESS STRATEGY:

Growth in demand of Jute fibres and other jute products due to its diversification and increasing use jute handicrafts and products are the key factors based on which the company has formulated its expansion plans. The company will continue to cater the domestic market while exploring diversified opportunities in the international market for Jute products and handicraft items.

RISK AND CONCERNS:

The Company is exposed to trading risk due to price vitality. In the Jute production segment continuous increase in wage costs coupled with labour productivity issues and inability to achieve optimum utilization of machines remain the single biggest worry for the industry burdened with competition from Bangladeshi jute products produced with cheap de-unionized labour.

The jute industry has faced challenges such as competition from synthetic materials, fluctuating demand, and modernization issues. Efforts have been made to address these challenges through innovation and diversification.

BUSINESS SEGMENT:

The Company is presently into Single Business Segment.

OPPORTUNITIES & THREATS:

Opportunities:

• With the rise in awareness of disposal issues of plastic, it has been banned around the globe. This gives the much needed boost to the Jute industry. The use of Jute products is increasing due to its biodegradability and sustainability with the environment. These biodegradable and natural fibers have made space due to their eco-friendly nature. ? Different incentive schemes by government to promote jute goods and various products made out of Jute like Lifestyle and promotional bags, Jute geo-textile, upholstery, apparels and fashion bags shall lay down a foundation for the continuous increase in demand of Jute.

The major threats are:

• Dilution of compulsory Jute packing order and lower order from government can adversely affect the Jute market. ? Shortage of skilled labor ? Increasing employee and wage cost results in higher conversion cost ? Competition from Bangladeshi Jute goods and synthetic packaging material.

INTERNAL CONTROL SYSTEM:

The Company has set up internal control procedures commensurate with its nature of the business. These business procedures ensure optimum use and protection of the resources and compliance with the policies, procedures and statutes. The internal control systems provide for well-defined policies, guidelines and authorizations and approval procedures. The prime objective of such audits is to test the adequacy and effectiveness of the internal controls laid down by management and to suggest improvements.

FUTURE OUTLOOK:

The future outlook for the business appears very promising, encouraging and the Company proposes to take advantage of the growing demand in the Jute products with special focus in export segment and hence plan to take necessary steps in this decision.

We are exploring international market for Jute products like Bags, Accessories and other decorative items. The overall market conditions at present give a promising view of the future market of Jute items.

CODE OF CONDUCT:

The Code of Conduct for the Board of Directors and the Senior Management is disclosed on the website of the company.

CAUTIONARY STATEMENT:

Statement made in this section of the report is based on the prevailing position in the jute industry and market conditions and future expectations. Actual results might differ from what we perceive with respect to Companys outlook and performance.

For and on behalf of the Board For Bangalore Fort Farms Limited

Place: Mumbai

Date: 31^st July, 2023

Sd/- Bidhan Chandra Roy Chief Financial Officer

BANGALORE FORT FARMS LIMITED