Managements Discussion and Analysis Report for the year under review, as stipulated
under Schedule V of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) is presented below
forming part of this Annual Report. The industry structure, development, performance,
opportunities, threats, outlook, risk and concerns, internal control systems and its
adequacy, financial performance with respect to operational performance and material
developments in human resource and industrial relations have been discussed in the
paragraphs to follow.
Textile Division
The year under review started with an unprecedented crisis due to lockdown imposed in
the country and the major economies of the world. The lockdown resulted in total
disruption to the business and destruction of the demand across the world. After initial
phase of complete lockdown, the industry was allowed to function with unsustainable and
unviable capacity from the later part of the first quarter. However, the situation started
improving gradually from the second half of the year with better demand for the textile
products particularly in the cotton value chain which resulted in significant improvement
in performance of the cotton mill.
During the year under review, North India Spinning Mill Unit located in the state of
Punjab was sold in order to reduce debts and improve the overall profitability of the
company.
The series of lockdown imposed again during the current year due to pandemic by almost
all the states has resulted in disruption in demand. The cotton value chain has been less
impacted because of good demand from the export market as compared to synthetic value
chain which has been badly impacted. The industry continues to deal with uncertainty
regarding the government directives and restrictions, uncertain labour supply and
unpredictable demand.
However, the entire world is taking aggressive steps to minimize the impact of the
pandemic and putting the human life back to normalcy. If successful, the same will result
in improved demand for textile products and the resultant improvement in the performance
of the textile value chain.
Tea Division
The Global Tea Production (excluding China) in the financial year 2020-21 was slightly
higher as compared to 2019-20 with Kenya being major contributor to increase. All India
Tea Production in Financial year 2020-21 is lower at 1255.60 million kgs compared to
1360.10 million kgs in the previous financial year, primarily due to lockdown imposed in
pandemic.
Your Division also suffer production loss due to pandemic and reported a production of
7.4 million kgs during the year under review. Average Tea Prices at auction centres in
North India witnessed a significant increase of Rs.50 per kg compared to the previous
year, primarily due to lower tea in supply chain. Price realization of our bulk tea
witnessed increase of Rs.65 per kg from previous years, which helped to compensate the
production loss.
During the year under review, Tengpani Tea Estate was sold in order to reduce the debts
and improve the overall profitability of the Company.
During the financial year, total tea exported from India was 18% lower as compared to
previous year. The performance of the Export Division is impacted due to lower offtake by
exporting countries consequent to significant spurt in domestic tea price whereas sluggish
demand and lower price in international market. Your Tea Division is hopeful for
improvement in its performance in the coming year subject to little parity in price of
domestic and international market.
All six factories of your Tea Division are certified under ISO 22000-2018 and are also
certified under Trustea. Tea Division also enjoys RFA certification in its three Tea
Estates located in the Golaghat district.
During the current year, due to unprecedented resurgent in cases of Covid-19 pandemic,
many states impose varied degree of lockdown resulting in disruption of demand. However,
with gradual relaxation after lockdown, we expect demand to improve. The production as on
date, even though higher than last year, has been impacted due to adverse climatic
condition in early part of the current year. There has been an interim increase in wages
in both the states of Assam and West Bengal, which will result in increase in cost and may
have adverse impact on the performance of the division in the current year. The division
is continuing its focus on quality, mechanization and exploring new export market, to keep
the performance of division stable in the current year.
Engineering (MICCO) Division
Engineering (MICCO) Division which basically carries out project execution in EPC and
supply/erection mode, also had to undergo through adverse situation due to pandemic. Our
project sites at JSW Dolvi Plant, Tata Sites at Kalinganagar and Vizag were totally closed
from April 2020, and could gradually resume its normal operations from the month of June
2020 only. Further, work at Tata Kalinganagar site, was temporarily suspended by customer
for several months, which affected our execution.
Against all odds, Engineering division achieved a revenue of Rs.33.71 Crores during the
period under review. By sustained efforts, the Division won orders for new projects during
the year of around Rs.38.87 Crores. During the financial year, the division had
systematically reduced its manpower from 125 heads to 85 heads and curtail other
overheads.
The execution of project has remained challenging even during the current year due to
prevalent pandemic and lockdown. However, your Directors are hopeful with gradual ease of
restriction, pace of execution will improve. Steel industry has performed well and hopeful
that producer will proceed with expansion/modernization program and we expect to procure
sufficient order.
Property Division
Property Division had reported revenue of Rs.888.68 lakhs during the period under
review, which has been slightly lower compared to previous financial year. As also
reported in last year that due to Covid-19 the world has been going through a recession
period and real estate sector was also under stress, which adversely affected the
activities of the division resulting in some of the tenants vacating the occupancy during
the period under review. During the current year, the Division has been trying to induct
some new tenants but as on date there is hardly any demand. In spite of that your Division
will put forward its continuous effort and try its best to increase the occupancy of
Gillander House, the property which majorly generates rental income of your Company.
Details of Significant Changes in the Key Financial Ratios & Return on Net Worth
As per the Schedule V to the SEBI Listing Regulations read with Regulation 34(3) of the
SEBI Listing Regulations, details of significant changes (i.e., change of 25% or more as
compared to the immediately previous financial year) in Key Financial Ratios and any
changes in Return on Net Worth along with detailed explanations therefore, are given
below:
| Sl. No. |
Particulars |
2020-21 |
2019-20 |
% Change |
| i) |
Debt Equity Ratio |
0.72 |
1.14 |
36.84 |
| ii) |
Net Profit Margin ( in lakhs) |
(974.44) |
(1,780.19) |
45.26 |
| iii) |
Return on Net Worth |
(0.04) |
(0.07) |
42.86 |
The significant changes as reflected in the ratios during the year are majorly due to
the reason that the company has sold North India Spinning Mill Unit located in the state
of Punjab and Tengpani Tea Estate in Tinsukia, Assam in order to reduce and repay debts
due with banks/financial institutions.
Internal financial control systems and their adequacy
Your Company has adequate Internal Financial Control Systems in all areas of operation.
Your Board has adopted policies and procedures for ensuring the orderly and efficient
conduct of its businesses, including adherence to the Companys policies, safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records and the timely preparation of reliable financial
disclosures. Internal Audits are conducted by Independent firms of Chartered Accountants
and the reports are discussed with the operational heads by the CFO, Managing Director and
Executive Director & CEO of the Company, and thereafter, placed before the Meetings of
the Audit Committee of the Board of Directors. Representatives of the Statutory Auditors,
Cost Auditors and Internal Auditors are also invited at the Meetings of the Audit
Committee as and when required. Corrective measures suggested at the Audit Committee
Meetings are duly implemented.
The Audit Committee of the Board also reviews the adequacy of Internal Financial
Control Systems at regular intervals. No fraud has been reported by the Statutory Auditor,
Secretarial Auditor, Cost Auditors or Internal Auditors of the Company.
Human Resources and Industrial Relations
The Company has laid down the process for attracting, retaining and recognizing talent
as it acknowledges the importance of good Human Resources. Company has cordial relation
with employees and there is mutual respect and admiration for each other. The Directors
wish to record their appreciation for the co-operation received from all employees.
Industrial relation was good.
Cautionary Statement
Management Discussion and Analysis Report contains forward-looking statements, which
are based on certain assumptions and expectations of future events. The Companys actual
results and performance may differ from those projected due to unforeseen circumstances
viz., political, economic, pandemic etc., over which the Company does not have any
control. The Company assumes no responsibility to publicly amend, modify or revise any
such statements on the basis of subsequent developments, information or events. Readers
are advised to apply their diligence and independent judgment.
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