Asian Tea & Exports Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is engaged in the business of trading of agricultural commodities, namely Tea, Rice (including White Raw/Non-Sortex Rice), Wheat and Pulses, along with earning Commission income on trading transactions carried out within India. The Company operates in the agri-commodity trading segment of the Indian economy, which continues to be a vital contributor to the countrys GDP, rural livelihood and food security architecture.

The Indian economy remained one of the fastest-growing major economies globally during Financial Year 2025-26, supported by resilient agricultural output, robust domestic consumption, government-led rural infrastructure spending and reform-oriented food-grain policies.

Agriculture and allied sectors continue to employ nearly half of Indias workforce and remain central to the governments Atmanirbhar Bharat and food security objectives. A brief overview of the industry segments in which the Company operates is set out below:

a) Tea Industry

India is the second-largest producer of tea in the world and among the top exporters, with cultivation concentrated in Assam, West Bengal (Darjeeling and Dooars-Terai) and the Nilgiris. During financial year 2025-26 (April 2025-March 2026), Indias tea exports were reported at approximately 239.51 million kg valued at approximately US$ 988.13 million, with India exporting to 151 countries and the UAE, Iraq and the USA emerging as the largest destination markets. On a calendar year basis, tea exports touched an all-time high of 280.40 million kg in calendar year 2025, aided by strong demand from Iran, Iraq and China, although the domestic tea sector faced headwinds from a sharp rainfall deficit in Assam during January-February 2026 and a decline in average auction prices during the year. The organised tea sector continues to be a major source of rural employment, engaging close to 12 lakh workers, more than half of whom are women.

b) Rice Industry

India remains the worlds largest exporter of rice, accounting for a significant share of global rice trade across both basmati and non-basmati varieties. For financial year 2025-26, industry bodies such as the Indian Rice Exporters Federation projected total rice exports (basmati and non-basmati combined) to rise by around 16% to approximately 23.5 million tonnes from 20.2 million tonnes in financial year 2024-25, supported by record domestic paddy production, easing of erstwhile export restrictions and expanding access to new markets across Africa and Asia. Non-basmati rice exports for financial year 2025-26 were recorded at approximately 15.01 million MT, valued at around Rs. 51,892 crore (US$ 5.82 billion). Domestic paddy procurement under the Minimum Support Price (MSP) mechanism also continued at a robust pace, reflecting government support to the sector.

c) Wheat Industry

India recorded a record wheat crop of over 115 million tonnes in the 2024-25 crop year, with the government targeting production of around 119 million tonnes for the 2025-26 crop year. Central pool wheat procurement during the Rabi Marketing Season 2025-26 substantially exceeded the corresponding period of the previous year crossing 250 lakh tonnes by end-April 2026 as against 205.41 lakh tonnes procured in the corresponding period a year earlier, an increase of nearly 25%, with the government subsequently reporting procurement in excess of 290 lakh tonnes against a target of 312 lakh tonnes for the season. The Minimum Support Price for wheat for the 2025-26 marketing season was fixed at Rs. 2,425 per quintal, underscoring continued policy support for wheat farmers and, in turn, for downstream trading and processing participants such as the Company.

d) Pulses Industry

India is both the largest producer and the largest consumer/importer of pulses in the world, accounting for a substantial share of global pulses production while continuing to depend on imports (from Myanmar, Australia, Russia, Canada and certain African countries) to bridge the demand-supply gap. Pulses production in India has grown steadily from around 16.3 million tonnes in FY 2015-16 to approximately 24.2-24.5 million tonnes in recent years. In FY 2025-26, the Government of India rolled out the six-year ‘Mission for Aatmanirbharta in Pulses with a financial outlay of approximately Rs. 11,440 crore, targeting an increase in pulses production to 350 lakh tonnes by 2030-31, alongside continued Price Support Scheme procurement of tur, urad and masur at up to 100% of state-wise production. These measures are expected to stabilise domestic pulses availability and pricing over the medium term a segment that continues to be the single largest contributor to the Companys trading revenue.

Overall, the agri-commodity trading industry in India continues to be shaped by monsoon performance, government MSP and procurement policy, export-import regulations (including periodic imposition or removal of Minimum Export Price/export duty), global commodity price movements, and logistics and warehousing infrastructure. The Company, being engaged in trading across a diversified basket of tea, rice, wheat and pulses, is positioned to partially mitigate commodity-specific and seasonal risks through this diversification.

2. OPPORTUNITIES AND THREATS Opportunities

? Rising domestic consumption of food grains, tea and pulses driven by population growth, urbanisation and increasing per-capita incomes.

? Government thrust on self-sufficiency in pulses under the ‘Mission for Aatmanirbharta in Pulses, supported by assured procurement and a targeted increase in production to 350 lakh tonnes by 2030-31, which should improve raw material availability and price stability.

? Record wheat and paddy production together with sustained MSP-based procurement, supporting stable sourcing for the Companys wheat and rice trading operations.

? Growing global demand for Indian tea, with exports at an all-time high and new/expanding markets such as China showing strong incremental demand for orthodox blends.

? Expanding e-NAM and digital agri-marketplaces, and improving rural logistics and warehousing infrastructure, which can reduce transaction costs and improve price discovery.

? Potential to deepen relationships with the Companys subsidiaries and associates, enabling backward integration and better-quality control.

Threats

? High dependence on monsoon and weather conditions; adverse rainfall (such as the deficit witnessed in Assam during January-February 2026) can impact crop output, quality and prices.

? Continued dependence on imports for pulses exposes the trade to global price volatility, foreign exchange fluctuations and changes in the trade/tariff policies of exporting countries.

? Frequent changes in government policy relating to MSP, Minimum Export Price, export duty/ban and stock-holding limits on food grains can materially affect trading margins.

? Intensifying competition from organised and unorganised trading houses, and thin trading margins characteristic of the commodity trading business.

? Rising input, transportation and warehousing costs, and interest rate movements affecting the cost of working capital funding required for inventory holding.

? Stricter international food safety and residue-limit norms (such as evolving EU Maximum Residue Limits for tea) that may affect export competitiveness of Indian-origin produce.

The Companys management continues to actively monitor these risks and has instituted internal control and risk management processes, as described in the following section, to mitigate their impact on the business.

3. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

(Rs. In Lakhs)

Product / Head	FY 2025-26	FY 2024-25
Tea	3.09	1.92
Rice	119.00	62.25
White Raw Rice (Non-Sortex)	75.24	226.46
Local Desi Wheat	95.98	30.47
Pulses	4919.65	4613.69
Commission	155.20	156.97
Total Revenue from Operations	5,368.17	5,091.76

Key observations on product-wise performance:

? Pulses continued to be the mainstay of the Companys trading operations, contributing approximately 91.6% of total revenue from operations in financial year 2025-26 (Rs. 4919.65 lakhs out of Rs. 5,368.17 lakhs), and registered a healthy growth of approximately 6.6% over financial year 2024-25, aided by improved availability and steady demand.

? Revenue from Rice trading (excluding White Raw/Non-Sortex Rice) grew sharply by approximately 91.2% year-on-year, reflecting the Companys ability to capitalise on the strong domestic and export environment for rice during the year.

? Revenue from local desi wheat more than tripled (growth of approximately 215%), supported by record wheat production and active MSP-linked procurement during the Rabi Marketing Season 2025-26.

? Revenue from White Raw Rice (Non-Sortex) declined by approximately 66.8%, reflecting a shift in the Companys product/customer mix towards other rice varieties and trading opportunities during the year.

? Tea trading revenue, though a relatively small proportion of the overall business, grew by approximately 60.9%, in line with the broader uptrend in Indian tea demand and prices during part of the year.

? Commission income remained broadly stable, marginally lower by approximately 1.1% as compared to the previous year.

Overall, revenue from operations increased by approximately 5.4% from Rs. 5,091.76 lakhs in financial year 2024-25 to Rs. 5,368.17 lakhs in financial year 2025-26, driven primarily by higher volumes in rice and wheat trading and continued strength in the core pulses trading business.

4. OUTLOOK:

The outlook for the Companys business remains cautiously positive, supported by the following broad trends expected to shape the agri-commodity trading landscape in India over the medium term:

? Continued government focus on achieving self-sufficiency in pulses is expected to gradually improve domestic availability, moderate price volatility and support sustainable growth in the Companys largest revenue segment over the coming years.

? Record wheat and paddy output, coupled with an active MSP procurement regime, is expected to keep raw material availability comfortable for wheat and rice trading operations, although downstream commodity prices may remain range-bound given elevated government stock levels.

? Sustained global demand for Indian tea, along with the Tea Boards export target of 300 million kg for calendar year 2026, presents an opportunity for the Company to scale up its (relatively small) tea trading operations, subject to compliance with evolving international quality and residue-limit norms.

? The Company will continue to focus on prudent working capital management, diversification across commodities, and leveraging its network of subsidiaries and associates in the tea plantation and trading space to strengthen its overall business resilience.

? Management will continue to closely monitor monsoon trends, MSP and trade-policy announcements, and global commodity price movements, and will calibrate its trading strategy, inventory positions and product mix accordingly.

The statements in this section are based on managements current assessment of market conditions and are subject to the risks and uncertainties described under ‘Risks and Concerns and the ‘Cautionary Statement below.

5. RISKS AND CONCERNS

? Commodity price risk: Prices of tea, rice, wheat and pulses are inherently volatile and are influenced by monsoon performance, domestic and global supply-demand dynamics, and government intervention (MSP, buffer stock operations, import/export policy), which may adversely affect the Companys trading margins.

? Regulatory and policy risk: Frequent changes in Minimum Export Price, export duty, stockholding limits and import tariffs on food grains and pulses can significantly impact the

Companys ability to plan and execute trades.

? Credit and counterparty risk: The Companys trade receivables (Rs. 1,718.31 lakhs as at 31^st March, 2026) represent a significant proportion of current assets, and the Company remains exposed to the risk of delayed realisation or default by trade counterparties.

? Liquidity and working capital risk: The trading business is working-capital intensive, requiring the Company to fund inventory and receivables through a mix of internal accruals and short-term borrowings; any tightening of credit availability or increase in interest cost could impact profitability.

? Foreign exchange and import dependency risk: To the extent pulses trading relies on imported material (India being a large net importer of pulses), the Company remains indirectly exposed to global price and currency fluctuations.

? Climate and agro-climatic risk: Erratic monsoons, droughts or excess rainfall in key growing regions (as witnessed in Assam during January-February 2026) can affect crop output, quality and availability of key commodities traded by the Company.

? Competition risk: The agri-commodity trading business is highly fragmented and competitive, with numerous organised and unorganised players, exerting continuous pressure on trading margins.

? Concentration risk: A substantial proportion of the Companys revenue (over 91%) is derived from a single commodity category, namely pulses, resulting in concentration risk should this segment face adverse conditions.

The Companys management continues to actively monitor these risks and has instituted internal control and risk management processes, as described in the following section, to mitigate their impact on the business.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems commensurate with the size, scale and nature of its operations, designed to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition, that transactions are authorised, recorded and reported correctly, and that applicable statutes, accounting policies and management policies are duly complied with.

The internal control framework is periodically reviewed by the Internal Auditor of the Company, who reports directly to the Audit Committee. For the financial year 2025-26, the Companys Internal Auditor was M/s Arya Agarwal & Associates, Chartered Accountants (Firm Registration No. 329343E). The Board, on the recommendation of the Audit Committee, has appointed M/s Yash & Associates, Chartered Accountants (Firm Registration No. 32522E) as Internal Auditor for the financial year 2026-27.

The Audit Committee of the Board reviews the internal audit reports, the adequacy of internal financial controls, and the significant audit findings on a periodic basis, and follows up on the implementation of corrective actions, where required. Statutory Auditors of the Company, M/s Agarwal Kejriwal & Co, Chartered Accountants (Firm Registration No. 316112E) have also, in the course of their audit of the financial statements for the financial year 2025-26, reviewed the internal financial controls over financial reporting and no material weaknesses have been reported. The Board is of the view that the internal control systems of the Company are adequate for its present size and nature of operations.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

7.1 Statement of Profit and Loss Summary

(Rs. In Lakhs)

Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	5,368.17	5,091.76
Other income	84.03	164.59
Total Income	5,452.20	5,256.35
Total Expenses	5,420.66	5,227.96
Finance Costs	89.34	167.86
Employee Benefits Expense	48.50	29.03
Profit Before Tax	31.54	28.40
Total Tax Expense	4.00	10.51
Profit for the Year	27.54	17.89
Other Comprehensive Income (net of tax)	1.41	1.15
Total Comprehensive Income for the Year	28.94	19.03
Basic & Diluted EPS (In Rs.) [Face Value Rs.10]	0.11	0.09

Total income increased by approximately 3.7% from Rs. 5,256.35 lakhs in financial year 2024-25 to Rs. 5,452.20 lakhs in financial year 2025-26, driven by higher revenue from operations, partly offset by a decline of approximately 48.9% in other income (from Rs. 164.59 lakhs to Rs. 84.03 lakhs). Total expenses increased marginally by approximately 3.7%, broadly in line with the increase in revenue. Finance costs declined significantly by approximately 46.8% (from Rs. 167.86 lakhs to Rs. 89.34 lakhs), reflecting a reduction in the Companys borrowings during the year, while employee benefits expense increased by approximately 67.1% (from Rs. 29.03 lakhs to Rs. 48.50 lakhs), reflecting the Companys continued investment in its workforce.

As a result, Profit Before Tax grew by approximately 11.1% from Rs. 28.40 lakhs to Rs. 31.54 lakhs, and Profit for the year (after tax) grew by approximately 54.0% from Rs. 17.89 lakhs to Rs. 27.54 lakhs, aided also by a lower total tax expense during the year. Total Comprehensive Income for the year increased by approximately 52.1%, from Rs. 19.03 lakhs to Rs. 28.94 lakhs.

7.2 Balance Sheet Summary

(Rs. In Lakhs)

Particulars	As at 31.03.2026	As at 31.03.2025
Total Non-Current Assets	2,150.82	2,147.99
Total Current Assets	4,702.40	5,025.11
Inventories	606.50	1003.86
Trade Receivables	1,718.31	2,039.77
Total Assets	6,853.24	7,173.11
Total Equity	5,429.55	5,400.60
Total Non-Current Liabilities	5.65	107.38
Total Current Liabilities	1,418.04	1,665.12
Current Borrowings	862.25	1,198.07
Trade Payables	434.87	326.97
Total Liabilities	1,423.69	1,772.50
Total Equity and Liabilities	6,853.24	7,173.11

Total assets of the Company declined by approximately 4.5% from Rs. 7,173.11 lakhs as at 31^st March, 2025 to Rs. 6,853.24 lakhs as at 31^st March, 2026, primarily on account of a reduction in current assets, particularly inventories (down approximately 39.6%) and trade receivables (down approximately 15.8%), reflecting more efficient working capital management during the year. Total equity increased marginally by approximately 0.5%, largely on account of the profit earned during the year, while total liabilities declined by approximately 19.7%, driven by repayment of non-current borrowings (which reduced to Nil from Rs. 98.78 lakhs) and a reduction in current borrowings (down approximately 28.0%) and other current liabilities, partly offset by an increase in trade payables (up approximately 33.0%).

7.3 Key Financial Ratios

In terms of Regulation 34(3) read with Schedule V (Part B) of the SEBI (LODR) Regulations, 2015, the details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in the key financial ratios, along with detailed explanations, are given below:

Ratio	FY 2024-25	FY 2025-26	Variance (%)	Reason of variance
Current Ratio	3.02	3.32	9.93	Normal variance.
Debt-Equity Ratio	0.26	0.17	(34.62)	Decreased due to decrease in total debt.
Debt Service Coverage Ratio	13.39	12.61	(5.82)	Normal variance.
Return on Equity Ratio	0.39	0.53	38.22	Improved as the company has earned profit compared to last years.
Inventory Turnover Ratio	8.55	6.37	(25.50)	Decreased due to increase in average inventory.
Trade Receivables Turnover Ratio	2.83	2.77	(2.12)	Normal variance.
Trade Payables Turnover Ratio	34.63	12.42	(64.14)	Decreased due to increase in average accounts payable.
Net Capital Turnover Ratio	1.68	1.57	(6.55)	Normal variance.
Net Profit Ratio	0.39	0.56	43.96	Increased due to increase in net profit.
Return on Capital Employed	3.56	2.23	(37.52)	Decreased due to decrease in earnings before interest and tax.
Return on Investment	0.35	0.53	54.27	Improved due to profit earned in the current year.

Explanation for significant variances (25% or more):

? Trade Payable Turnover Ratio decreased by approximately 64.14%, on account of an increase in average trade/accounts payable during the year, reflecting extended credit terms availed by the Company from its suppliers.

? Return on Equity Ratio improved by approximately 38.22%, as the Company earned higher profit during financial year 2025-26 as compared to the previous year.

? Inventory Turnover Ratio decreased by approximately 25.50%, on account of an increase in average inventory held during the year.

? Net Profit Ratio increased by approximately 43.96%, on account of an increase in net profit during the year.

? Return on Capital Employed decreased by approximately 37.52%, on account of a decrease in earnings before interest and tax during the year.

? Return on Investment improved by approximately 54.27%, on account of the profit earned by the Company during the current year, which improved the return on capital employed.

? Debt-Equity Ratio decreased by approximately 34.62%, on account of a decrease in the

Companys total debt during the year.

8. DETAILS OF SIGNIFICANT CHANGES IN RETURN ON NET WORTH

Return on Net Worth (Return on Equity) improved from 0.39 (39%) in financial year 2024-25 to 0.53 (53%) in financial year 2025-26, representing an increase of approximately 38.2%, which is a significant change as per the threshold prescribed under the SEBI (LODR) Regulations, 2015.

This improvement was driven by an increase in the Companys net profit after tax (and total comprehensive income) during financial year 2025-26, on a marginally higher average shareholders equity base (which increased from Rs. 4,921.61 lakhs to Rs. 5,415.07 lakhs). The Board and management believe this reflects improved operational efficiency and profitability of the Companys core trading operations during the year.

9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company considers its human resources to be an important asset and continues to invest in attracting, retaining and developing talent to support its trading operations. Employee benefits expense increased from Rs. 29.03 lakhs in the financial year 2024-25 to Rs. 48.50 lakhs in the financial year 2025-26, an increase of approximately 67.1%, reflecting the Companys continued investment in its workforce during the year, including revisions in compensation and employee benefit obligations.

The Company maintained cordial and harmonious industrial relations with its employees throughout financial year 2025-26, and there were no significant industrial disputes or work stoppages during the year. The Company continues to comply with all applicable labour laws and regulations, and encourages a culture of professionalism, integrity and continuous improvement across the organisation.

10. DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of the Company for the financial year 2025-26 have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. There has been no significant departure from the applicable Accounting

Standards in the preparation of the financial statements for the year under review, and accordingly there is no separate disclosure required in this regard.

11. SUBSIDIARIES AND ASSOCIATES

As at 31^st March, 2026, the Company had the following Subsidiaries and Associates, and the consolidated performance of the Company includes the financial results of these entities as per the applicable provisions of the Companies Act, 2013 and Ind AS 110/28:

Subsidiaries	Associates
Greenol Laboratories Private Limited	Kesavatsapur Tea Co. Private Limited
Sarita Nupur Vyapar Private Limited	Asian Tea Co. Private Limited
Herbby Tea Plantations Private Limited	Hurdeodass Co. Private Limited

12. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, 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. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand and supply, government regulations, tax laws, monsoon and other agro-climatic conditions, global and domestic commodity price movements, foreign exchange fluctuations, changes in trade policy and other statutes, and other incidental factors. The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable law.

13. ACKNOWLEDGEMENT

The Board of Directors wishes to place on record its appreciation for the continued support, cooperation and confidence reposed by Shareholders, Customers, Suppliers, Bankers, Regulatory Authorities and Employees of the Company during the year under review.

For and on Behalf of the Board
Registered Office:
4/1, Middleton Street,
Sikkim Commerce House
5th Floor, Kolkata-700071
Date: 03rd September, 2026
Sd/-	Sd/-
Hariram Garg	Sunil Garg
(DIN: 00216053)	(DIN: 00216155)
Managing Director	Director