grob tea co ltd Management discussions

(Forming part of Directors Report for the financial year ended 31^st March, 2023)

Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 stipulates disclosure under specific heads which are given in the following paragraphs and which continue to be followed in the usual course of the Companys business over the years in discussion amongst the Directors and Senior Management Personnel.

Industrial Structure & Development

During the year 2022 world tea production dropped marginally to 6422 M. Kgs against last year 6452 M. Kgs - North Indias crop gained by + 25 M. Kgs (+ 2%) - South India crop dropped marginally by 3 M.kgs (-1%) - over all Indian crop touched 1365 M. Kgs out of which STG share 52% and organized growers 48% - the crop increase is mainly in the STG Sector.

After decades low export of last year - the export front picked up during 2022 and it touched 227 M.Kgs against last year 196 M. kgs - higher export reduced the retention quantity to 1138 M. Kgs against 1133 M.kgs of 2021.

Opportunity and Threat: The continuous promotional efforts and initiatives taken by the Government / Tea Board including Trustee programme will benefit the industry in the long term. Three of your Companys garden are already Trustea certified and the fourth garden is going to be certified soon.

Inspite of all technological advancement tea remain totally a rain dependent crop. Global Warming induced drastic climate change is effecting all agriculture crop including tea. The ill effect of climate change is being felt in all the tea growing regions of the country particularly the N.E. - your Company have taken up a comprehensive project (project work on climate change - PWCC) to minimize the effect to some extent and improve the micro climate around the gardens. Capacity and efficiency of the existing irrigation sets have been improved to a large extent to minimize the effect of early drought. Climate change have changed the character of monsoon to no rain for long period with heavy rain for short periods.

Product-wise Information :- During the year under review all India production is up by 22 M kgs compare to previous years - export have been up by 31 M kgs over last year which reduced the retention to some extent with improved quality of the produce the average realization increased by 11%. The details performance is given below

Year	Production (lacs kgs)	Sale (lac kgs)	Avg. realization (per kg.)
2022-23	43.51	43.19	236.36
2021-22	44.68	43.44	213.34
Change %	(-) 0.03%	(-) 0.58%	(+) 10.79%

Outlook :- As expected season started with early drought effecting the first flush crop - though due to intensive irrigation the ill effect could be minimized and till May crop is down by merely 1.50% over last year but last year was also not a very good year - compare to 2019 the short fall is to the tune of 25% - June is not looking too bright - garden are experiencing a severe heat wave with mercury touching 40⁰ C on numerous occasion - one bright spot among the gloom is the significant improvement in the quality of your Companys produce.

Risk and Concern :- Weather plays an important role in the success or failure of any agriculture industry including plantations. Tea is a perennial crop and hence with climate change, repeated erratic rainfall and weather conditions affects the production of tea crops. Further, tea being the labour intensive industry, shortage of labour in peak season and substantial increase in labour costs, high social cost and other input cost remains the major cause of concern for the industry.

Discussion on Financial Performance with respect to Operational Performance: There have been series of significant changes in the overall market scenario in last few years. Over the last four years we have been faced with many a difficult circumstance like vagaries of weather due to climate change, severe pest infestation, significant rise in labour wages due to statutory changes and also the recent pandemic, all have had significant impact on Companys profitability. The disclosures under financial performance with respect to operational performance are covered by the respective sections i.e., “Financial Highlights” and “State of Company Affairs and Future Outlook” under the Directors Report.

Internal Control System and their Adequacy:The Company has an effective system of internal control commensurate with its size and it ensures operational efficiency, accuracy in financial reporting and compliance of applicable laws and regulations at all levels of Management of the Company. These are reviewed from time to time and improved upon, where required. 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.

Information regarding Human Resources/Industrial Relation

The Company deeply appreciates performance and cooperation of the employees for the year and to maintain this cordial relationship for the years to come. Human resources are the most valuable assets of the Company and thus adequate care is taken by the Company for their development and wellbeing. Tea being an essentially labour intensive industry, the

Employees are the mainstay of its operations. It is your Companys endeavor to provide safe, healthy and sustainable work environment in all the estates for the employees and their families. Your Company believes in employee empowerment across the entire organization in order to achieve organizational effectiveness. The Company employs over 3937 employees at its tea estate and other establishments in the country. The Industrial relations of the Company was cordial and there were no instances of employee disputes arising during the year.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

Ratios	2022-23		2021-22		%Increase/ (Decrease)	Reason for variance greater than 25%
Debtors Turnover Ratio	67.04		40.53		65.39%	Improvement in the ratio indicates better debtor realisation with increase in turnover as compare to last year.
Inventory Turnover Ratio	6.49		6.85		-5.24%	N.A.
Debt Service Coverage Ratio	0.60		2.62		-77.25%	Debt increases due to increase in the loan of Rs 450 Lakhs taken against Fixed deposit from Yes Bank at the year end, this had reduces the ratio.
Current Ratio	2.33		2.93		-20.49%	N.A.
Debt Equity Ratio	0.15		0.04		283.55%	Debt increases due to increase in the loan of Rs 450 Lakhs taken against Fixed deposit from Yes Bank at the year end.
Ratios	2022-23	2021-22		%Increase/ (Decrease)		Reason for variance greater than 25%
Operating Profit Margin ( %)	7.17%	6.51%		10.19%		N.A.
Net Profit Margin (%)	0.59%	4.48%		-86.81%		Increases in Labour Wages and substantial increase in some of input costs along with impairment in value of closing stock of LED lights and higher provision of Deffered Tax Liability impacted the bottom line of the Company as compared to last year.

Details of any change in Return on Capital employed as compared to the immediately previous financial year along with a detailed explanation thereof:

2022-23	2021-22	%Increase/ Decrease	Reasons
4.57%	6.68%	-31.52%	Increases in Loan of Rs.450 Lakhs against Fixed Deposit from Yes Bank in the year end increase the capital employed and increases in Labour Wages, substantial increase in some of input costs, impairment in value of closing stock of LED lights reduces the Earnings.

Cautionary Statement:Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to factors beyond control.

For and on behalf of the Board

Place : Kolkata	P. K. Agarwal	Director
Dated: 25th May, 2023	(DIN NO. 00703745)
	M K Agarwal	Executive Director
	(DIN NO. 00697746)
	Subrata Dasgupta	CEO