Beekay Niryat Ltd Management Discussions

> ECONOMIC OVERVIEW

The Russia-Ukraine war impacted global output and escalated inflation. The pandemic also impacted manufacturing activity, which in turn led to supply shortages, release of pent-up demand and high inflation in many emerging and developing economies. India is amongst the worlds largest populated Country. Over the past decade, the Countrys integration into the global economy has been accompanied by economic growth and it has now emerged as a global player. The Government and Reserve Bank of India took several monetary and fiscal policy measures to support and safeguard against the adverse impact of the crisis on the economy.

> INDUSTRY STRUCTURE AND DEVELOPMENT

The jute industry continues to play a pivotal role in Indias economy, particularly in generating employment in rural and semi-urban regions. India is the worlds largest producer of raw jute and jute goods, with West Bengal contributing the majority of cultivation and manufacturing. The industry structure consists of raw jute cultivation, procurement through the Jute Corporation of India at the Minimum Support Price (MSP), and manufacturing of jute products such as hessian, sacking, and diversified jute goods (DJG).

During the financial year 2024-25, the industry witnessed challenges arising from lower raw jute production, which is estimated to have declined by nearly 25-30% compared to the previous year due to crop shifts and adverse weather conditions. Despite this, the Government of India enhanced the MSP of raw jute to Rs5,335 per quintal, ensuring a remunerative price to farmers and safeguarding their interests. Government procurement also provided stability to the market, although significant carryover stock from previous years and subdued mill consumption impacted demand-supply dynamics.

On the developmental front, the industry is gradually diversifying from traditional packaging materials towards eco-friendly and value- added products such as shopping bags, mats, carpets, handicrafts, and geo-textiles. Growing global awareness of sustainability and environmental protection continues to create opportunities for the Indian jute sector, particularly as a substitute for plastics and synthetic materials.

Overall, while the jute industry faced production and supply-side challenges in FY 2024-25, policy support, product diversification, and increasing global demand for biodegradable products are expected to strengthen its long-term growth prospects.

> OPPORTUNITIES AND THREATS/ RISKS & CONCERNS

? Opportunities

In view of rising concern for environment and global warming, jute products are getting preference over other substitutes. Demand for diversified jute goods is increasing due to its functional value and increasing awareness for use of biodegradable products.

There may be opportunities for export of jute products at attractive prices, which in turn may result in an increase in demand for raw jute.

? Risks & Concerns / Threats

Due to low production, the price of raw jute generally prevails over the MSP determined by the Government as a result it is becoming difficult for your corporation to procure raw jute under MSP.

It is also risky to procure raw jute at ruling price for commercial operation.

There are various threats to the Company such as the market Competitors, which indulge in cost cutting of the product, which forces the Company to sell its product as low cost. This also led to loss to the Company. On the other hand, Companys raw material is based on agro product which is affected by calamities, which deteriorate the quality of the product, which is the major threat to the Company.

> SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company is operating in the single segment; Therefore, segment wise information has not been disclosed.

> OUTLOOK

The jute industry is expected to benefit from continued government support through MSP and compulsory packaging regulations, alongside rising global preference for sustainable and biodegradable products. While supply-side challenges and competition from synthetic substitutes remain, the focus on product diversification, modernization, and export opportunities is likely to drive steady growth in the coming years.

> INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal control system to safeguard the companys assets from any loss or damage, to control cost, prevent

revenue loss and required financial and accounting controls and to effectively implement the applicable accounting standards.

> MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSRIAL RELATIONS FRONT

Your Company maintained good industrial relation during the year under review. We believe that the people are the most valuable assets of the company as they contribute significantly to the achievement of business objectives. During the year, various HR measure were taken to make the HR policies up to the required business needs. The Company has strong dedicated term of employees and they have shown commitments, competence and dedication in all area of business.

> DETAILS OF SEGNIFICANT CHANGES IN KEY FINANCIAL RATIO

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Company is required to give details of significant changes (change of 25% or more as compared to immediately previous financial year) in key sector-specific financial ratios. During the year the Company maintain the specific ratios as follows:

During the year under review, the Current Ratio improved significantly to 17.55 in 2024-25 as compared to 1.67 in 2023-24, reflecting a substantial strengthening of the Companys liquidity position. The Debt-Equity Ratio decreased to 0.03 in 2024-25 from 0.05 in 2023-24, indicating lower financial leverage and a stronger capital structure. The Debt Service Coverage Ratio stood at 7.73 in 2024-25 as against 11.20 in 2023-24, showing a decline in coverage as compared to the previous year. The Return on Equity (ROE) decreased to 1.20% in 2024-25 from 3.00% in 2023-24, while the Return on Capital Employed (ROCE) also declined to 1.78% from 4.16% in the previous year, primarily on account of lower profitability during the year.

> CAUTIONARY STATEMENT

Statements in this Report describing the Companys objectives, projections, estimates, expectations, or predictions may be "forwardlooking statements" within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied due to risks, uncertainties, and external factors such as government policies, economic developments, demand-supply conditions, raw material availability, market prices, and other incidental factors. The Company assumes no responsibility to publicly amend, modify, or revise any forward-looking statements based on subsequent developments, information, or events.