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This Management Discussion and Analysis report has been prepared in compliance with the requirements of Listing Agreement/ Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and contains expectations and projections about the strategy for growth, product development, market position, expenditures and financial results. The Companys actual results, performance or achievements could differ from those projected in such forward looking statements on the basis of any subsequent development, information or events for which the Company do not bear any responsibility.
a) Industry Structure and Development :
Government of India has been taking different measures to protect the jute Industry and accordingly extended the validity of the Jute Packaging Materials (Compulsory use for Packing Commodities) Act, 1987 for another year and has increased the Reservation level for food grains packing from 90% to 100% and for sugar packing at 20% in the larger interest of the Industry.
Availability of Raw Jute during the season 2018-19 was under pressure leading to increase in price of Raw jute and consequent increase in Raw material cost as compared to last year.
b) Opportunities and threats / Risk and concerns :
Jute being a natural bio-degradable fibre is environment friendly and use of Jute goods in different areas like Jute Geo textiles is being promoted. Some diversified products such as floor coverings and shopping bags are being developed in the Industry for export markets.
i) Govt. attempt for Dilution of compulsory packaging under JPMA will lead to affect the future plans.
ii) Farmers are reluctant to take up jute crop as new generation of workers are interested in alternate opportunities.
iii) Shortage of workers is causing obstruction in optimization of capacity utilization.
c) Segment wise or product wise performance :
The Company is mainly engaged in the business of Manufacturing of Jute Goods and hence segment wise performance is not required to be disclosed.
The following disclosure under Geographical segment has, however, been considered on the basis of sales for the Jute goods :
- Within India - Rs. 19338.78 lakh (previous year Rs. 20015.94 lakh)
- Outside India - Rs. NIL (previous year Rs. NIL lakh)
d) Outlook :
Demand for Jute Goods during the year 2019-20 is expected to remain good. Projections from Govt. Agencies for purchase of gunny bags for current kharif crop is satisfactory. The company has started to manufacture Food Grade Jute Bags for Export market and hope to cater to the export market demand. The Company has also started production of Geo Textile which is now being used in Road Construction Projects although the demand is very small.
Jute crop for the current season 2019-20 is expected to be better than last year in view of favourable weather conditions and higher sowing. The carryover of Raw Jute stock in the current year is comfortable and consequently the prices of Raw Jute should remain at current levels.
The outlook for the current year remains positive.
e) Internal control systems and their adequacy :
Your company has an adequate system of internal control, which provides reasonable assurance with regard to safeguarding the companys assets, promoting operational efficiency and ensuring compliance with various statutory provisions. The Audit Committee of the Board plays a significant role in the internal control system and reviews the scope of internal audit work and internal Audit reports, financial performance of the company and suggests improvements in the internal control systems wherever required.
f) Discussion on financial performance with respect to operational performance :
Sale of Jute goods during the year was Rs.19338.78 lakhs as compared to Rs. 20015.94 lakhs during previous year. Operating loss for the year was Rs. 541.59 lakhs as compared to profit of Rs. 88.88 lakhs in the previous year.
g) Material developments in Human Resources/ Industrial Relations front, including number of people employed :
Employment of workers at new pay scale and training programmes for the workers are being continued. Steps have been taken to provide residential quarters within the mill compound for outside workers as well. The company is making all efforts to train the workers and increase their skills by way of continuous training but Industry wide shortage of workers is a matter of great concern for all. The relations with the unions were cordial during the year.
There were 4120 permanent employees on the rolls of Company as on March 31, 2019.
h) Cautionary statement :
Statement made in this section of the report is based on the prevailing position in the Jute industry and market conditions. Actual results could however differ materially from those expressed or implied with regard to Companys Outlook and Performance.