Management Discussion and Analysis
The total world tea production was 6422 million Kgs in 2022 as compared to 6452 million Kgs in 2021, out of which contribution from Indian tea crop was 1365 million Kgs when compared to 1343 million Kgs. last year. Total Indian tea export was 226 million Kgs in 2022 against last year 196 million Kgs. The contribution of small growers in Indian tea production continues to swell every year and has already breached 50% of total crop. Whereas production from organized sector is showing a declining trend. Global tea consumption is likely to grow due to rising population of tea drinkers as tea being recognized as health drink. Indian tea consumption is likely to continue to grow at a steady rate.
Segment Analysis
Tea crop is entirely dependent on weather conditions being agriculture in nature. With global warming and extremely uncertain weather conditions the crop tends to suffer. Extreme weather conditions also gives rise to pest infestation which is again detrimental for crop. We follow prudent field practices and 100% irrigation facilities to overcome such natural vagaries.
Opportunities Threats, Risks and Concerns
Global tea production is rising every year and so is the consumption. Being agricultural in nature, production is directly linked to the weather conditions prevailing during the year and tends to affect the production in adverse conditions. Furthermore, mushrooming of small growers in the Indian tea sectors is challenging the survivability of organized tea gardens as there is no level playing field between the two. The latter is burdened with huge social cost falling under Plantation Labour Act, whereas small growers are not affected by it. Rising cost in form of higher wages and other inputs not supported by increase in price realization, continues to pose major threat on survivability or organized sector.
Outlook
Current year continues to look very challenging due to oversupply of teas which is denting the market sentiments. Production from small growers continues to spiral upwards and flooding the market. Furthermore, steep decline in orthodox tea prices because of Iran payment crisis has compelled producers from switching over to CTC tea production from orthodox tea. Cost of inputs including wages continues to increase every year putting immense pressure on the bottom-line of the tea industry. However demand for quality tea continues to be stable and price differential between quality and non-quality tea continues to widen. Our company has a backing of high yielding gardens together with better quality of tea manufacturing which gives us tremendous advantage over our competitors. Our company is confident of passing through this turbulent times and see better years ahead.
Financial Review and Analysis
The Companys financial position is strong enough which has helped company to pass through in turbulent times. The development and modernization work in garden is always given top priority for improvement in quantity as well as quality. The surplus fund in the Company is deployed in such a way that reasonable returns are derived.
Details of Significant Changes in key financial ratios along with detailed explanations.
In compliance with the requirement of the Listing Regulations, the key financial ratios of the Company along with explanation for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year will be termed as ‘significant changes) has been provided hereunder:
The significant changes over previous year across all ratios is due to increase in profit as compared to last year and deduction in interest cost. For detailed explanation, please refer to Note no. 41 of the Notes to Standalone Financial Statements for the financial year ended March 31, 2023.
Internal Control systems and their adequacy
The Company has laid down policies, guidelines and procedures, which form part of its internal control system. The Companys internal control system are periodically tested and supplemented by an extensive programme of internal audit by independent firm of Chartered Accountants. Audits are finalized and conducted based on internal risk assessment. Significant findings are brought to the notice of the Audit Committee of the Board and corrective measures are recommended for implementation.
Material developments in human resource / industrial relations front, including number of people employed
Industrial relations in all tea estates and units continued to be cordial. Focus on better deployment of labour in garden area has resulted in improving productivity both in quantitative and qualitative manner. The total number of people employed in your Company as on 31st March, 2023 was 3661.
Cautionary Statement
The statements in the report of the Board of Directors and the Managements Discussion and Analysis Report describing the Companys projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities Laws and Regulations. Actual results could differ materially from those expressed or implied since the Companys operations are influenced by many external and internal factors beyond the control of the Company.
For and on behalf of the Board | ||
Registered Office : | Sd/- | Sd/- |
3B, Lalbazar Street | Sandeep Singhania | Sarita Singhania |
Kolkata - 700 001 | Managing Director | (Whole-time Director) |
Date : 10th August, 2023 | (DIN: 00343837) | (DIN: 00343786) |
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.