Bengal Tea & Fabrics Ltd Management Discussions

(Forming part of Directors Report for the financial year ended 31^st March, 2025)

Industry Structure and Developments: India is one of the largest Black Tea producer in the world producing approximately 1297 million kgs during the financial year 2024-25 and consuming 80% of the total production domestically. Due to lower crop, prices of the common medium teas coupled with good quality teas moved up as a result the overall all India average has been 201.39 during the financial year 2024-25 as against 164.43 during the financial year 2023-24 which resulted in the overall increase of about 22% during the previous year.

Opportunities and Threats: The continuous promotional efforts and better marketing and brand building initiatives, taken jointly by the Government/Tea Board to increase the per capita consumption of Tea which is still lower than the global peers. Also ATISIS/TRUSTEA programs for specialty tea /orthodox tea, are likely to have positive impact on the industry in the long term. Fluctuation in global tea prices, rising production costs and shortage of labour are threats being faced by the Industry. Global warming and climate change, with unpredictable weather patterns impacted tea harvests and also affects the quality of teas.

Product-wise Performance: During the year under review, the production of Black Tea moved up by about 25% as compared to previous year. The gist of performance of the division during the financial year 2024-25 is as under:

*excludes operation of traded goods

Outlook: The Indian tea industry is projected to reach significant growth by 2025, driven by rising domestic consumption and strong export potential, particularly to Russia, Iran, and the UAE. While black tea remains the most widely consumed, herbal and specialty tea segments are experiencing rapid expansion, fueled by wellness trends. The industry is also expected to see innovation in _avors, packaging, and specialty blends.

Also the export market is looking good for the Orthodox teas and better realizations are expected.

Risks & Concerns: Continuous drop in yields due to climatic conditions, stagnant domestic consumption of the tea, shortage of labour during peak season, increase in wages and other costs could affect the fortunes of the Tea Industry.

Discussion on financial performance with respect to operational performance:

During the year under review, production and sales realisation were higher in comparison to the previous year resulting in the growth of profit of the Tea Division.

A. Details of significant changes (i.e. change of 25% or more as compared to the immediately preceding previous financial year) in key financial ratios or sector specific ratios along with detailed explanations therefore:

#Excluding Profit from Exceptional Item

Internal Control Systems and its Adequacy: The Company has laid down guidelines, procedures and policies for better management control which are periodically tested and supplemented by an extensive internal audit program. Significant findings are placed before the Audit Committee and the corrective measures are recommended for implementation. In the opinion of the management, the existing internal checks and controls are effective and adequate. Information regarding Human Resources/Industrial Relations: The relationships were cordial with the employees throughout the year. The total numbers of manpower employed by the Tea Division as on 31^st March, 2025 was 1506.

Cautionary Statement: The forward-looking statements and the views expressed in the Management Discussion and Analysis Report are based on certain assumptions. The actual results, performances or achievements may differ materially from those stated therein. The Company would not be held liable, in any manner, if the future turns out to be quite different, even materially.