James Warren Tea Ltd 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 6604 m kg in 2023 as compared to 6422 m kg in 2022. Out of the total production, the contribution from Indian Tea crop was approximately 1367 m kg against 1365 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. In India, tea consumption is on the rise due to its health benefits. The Indian tea industry has responded to this growing demand by diversifying its offerings and introducing several varieties of tea to cater to different tastes and preferences thus opening up new market opportunities both domestically and internationally.

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The key challenges faced by the industry are selling prices not keeping pace with the rising costs, climate change and outdated legislative frameworks.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.

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, a major importer of orthodox tea from India, has seen a significant drop in its tea imports during the year.

Further, the profitability of the Company during the current financial year is likely to be impacted due to escalation in the wages of daily rated workers and input costs. However, in spite of this scenario the outlook for the tea industry is positive and encouraging because of the increased demand and strong consumer focus on health and wellness. The Companys focus is to continue manufacturing better quality teas at lower cost and also address any barriers that hinder trade to unlock opportunities.

RIKS & CONCERNS

The tea Industry is largely dependent on vagaries of weather. Weather plays a major role in determining the final production of tea. Erratic distribution of rain with fluctuating ambient temperature are being experienced by all tea growing region of North East and it is badly impacting the growth during the 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. Your Company has engaged reputable Chartered Accountants for conducting internal audit of the Gardens and the Head Office to provide assurance over the internal controls. The Audit Committee looks into the Auditors observations, which is deliberated upon and necessary instructions are issued to the concerned person of the related division to take corrective measures.

FINANCIAL PERFORMANCES

During the current year under review total turnover of the Company stood at Rs. 11,680 lakhs (P.Y. Rs. 13,049 lakhs). Profit after tax of your Company stood at Rs. 188 lakhs (P.Y. Rs. 949 lakhs).

RATIO ANALYSIS

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

HUMAN RESOURCES

The Tea industry is labour intensive and provides employment to large segment of the population residing in and around the tea plantation areas. Your Company has employed over 6433 personnel at its tea estates and other establishments in India as on 31^st March, 2024. A tea plantation worker 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, 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 since the Companys operations are dependent on 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 new information. Actual results may differ from those mentioned in the report.