james warren tea ltd share price Management discussions

BUSINESS OVERVIEW

The Companys main business is growing, manufacturing and marketing of tea produced in its six tea estates as mentioned below. The Tea Estates are located in the top quality belt of the South Bank, Upper Assam.

1. Dhoedaam Tea Estate

2. Deamoolie Tea Estate

3. Thowra Tea Estate

4. Balijan (H) Tea estate

5. Rajah Alli Tea Estate

6. Zaloni Tea Estate

Our Tea Estates manufacture top quality CTC and orthodox teas and are popular among customers in the Indian domestic market as well as with prominent importers in Germany, UK, USA and Middle East.

Your Company strives to improve its turnover by focusing on increasing yield and quality. In the best interest of quality, sustainability and traceability, your Company does not purchase bought leaf in any of its factories.

INDUSTRY STRUCTURE & DEVELOPMENTS

The total world tea production was about 6422 m kg in 2022 as compared to 6469 m kg in 2021. Out of the total production,thecontributionfrom Indian Tea crop was approximately 1365 m kg against 1329 m kg last year. Tea continues to be savored globally and remains the most popular beverage in the country contributing substantially to the countrys income by way of foreign exchange earnings. There is resurgence of tea consumption owing to proven health benefits. The Indian tea industry has new avenues.

OPPORTUNITIES AND THREATS

Global tea production is rising every year and so is the consumption. The key challenges faced by the industry are selling prices not keeping pace with the rising costs, climate change and outdated legislative frameworks. The escalation of wages and other input costs such as gas, electricity,pesticides,fuel and fertilizer in the recent past led to increase in the cost.

Source: J Thomas Tea Statistics 2022

SEGMENTWISE PERFORMANCE

The Company operates in a single segment business and produces both CTC and Orthodox Teas. The Company is primarily engaged in the business of cultivation, manufacture and sale of tea which takes places either through auction sales or through private channels. The performance is covered under section ‘Financial Results in the

Directors Report.

OUTLOOK

The Tea Industry in North East India comprising Assam and North Bengal produces 83% of countrys total production. The viability of the Tea Industry continues to be impacted by the twin factors of market forces and regression arising out of extreme climate. In India, the Orthodox market has been very sluggish. Iran, which is the largest importer of Indian orthodox tea, has not been issuing fresh orders since December, 2022 as inflation has hit their economy severely.

Further, the profitability of the Company during the current financial year is likely to be impacted due to escalation in the staff salary and wages of daily rated workers. However, in spite of this scenario the outlook for the tea industry is positive because of the increasing demand, consumption and acceptance of the same as a wellness drink globally. The Companys focus is to continue manufacturing better quality teas at lower cost.

RIKS & CONCERNS

Weather is of prime importance for the industry. Due to climate change and erratic weather conditions, the growth of leaf and bushes are affected, which in turn affects the tea production during high cropping months.

The Tea industry being highly labour intensive and shortage of labour in peak season remains the major cause of concern for the industry.

INTERNAL CONTROL SYSTEMS

Our internal financial control framework is commensurate with the size of the business and the regulatory requirements. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes and ensuring compliance with corporate policies. The internal audit of the gardens and the head office is carried out by reputed Chartered Accountants. The Audit Committee looks into the Auditors observations, which is deliberated upon and necessary concerned person of the related Division to take corrective measures. instructions

FINANCIAL PERFORMANCES

During the current year under review total turnover of the Company stood at 13,049 lakhs (P.Y. 11,118 lakhs).

Profit after tax of your Company stood at 949 lakhs (P.Y. 825 lakhs).

RATIO ANALYSIS

Following are ratiosfor the current financial year and their comparison with preceding financial year along with explanations:

Sl No	Ratios	2023	2022	% Change	Explanation if the change is more than 25%
1.	Debtors Turnover (Times)	185.65	105.00	76.81%	Change due to increase in Sales as compared to last year.
2.	Inventory Turnover (Times)	35.96	59.30	-39.36%	Change due to increase in Sales and in average inventory as compared to last year.
3.	Interest coverage ratio	-	-	-	-
4.	Current Ratios	2.70	2.41	12.03%	-
5.	Debt Equity ratio	-	-	-	-
6.	Operating margin (%)	7.03	8.00	-12.13%	-
7.	Net profit margin (%)	7.27	7.42	-2.06%	-
8.	Return on Net Worth (%)	10.10	9.11	10.81%	-

HUMAN RESOURCES

The Tea industry is labour intensive and provides employment to large segment of the populationresiding in and around the tea plantationareas. Your Company has employed over 6565 personnel at its tea estates and other establishments in India as on 31^st March, 2023. A tea plantationworker and his family are provided with housing, medical, education facilities,insurance, provident fund and gratuity. Your Company believes in employee empowerment across the entire organization to achieve organizational effectiveness. 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.

CAUTIONARY STATEMENT

The statements in the report of the Board of Directors and the Managements Discussion and Analysis Report describing the Companys projections, estimates,expectationsorpredictionsmay be forward looking statements withinthemeaningofapplicablesecuritiesLawsandRegulations.Actual results could differ materially from those expressed or implied since the Companys operations are by many external and internal factors beyond the control of the Company. The Company assumes no responsibility to publicly modify or revise any forward looking statements on the basis of any future events or newinformation.Actual results may differ from those mentioned in the report.