James Warren Tea Ltd Management Discussions

BUSINESS OVERVIEW

The Companys main business is to cultivate, manufacture and sale of tea. All the four tea estates of your Company are located in the top quality belt of the South Bank, Upper Assam.

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 continuously 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

In 2024, world tea production was 7,053 million kilograms, marking an increase from 6,727 million kilograms in 2023. However, Indias contribution to the world tea production saw a decline, with production of 1,285 million kilograms approximately, compared to 1,394 million kilograms in the previous year.

Tea continues to be one of the most widely consumed beverages globally, enjoying strong global popularity. It significantly contributes to the nations economy through foreign exchange earnings. In recent years, domestic consumption in India has increased, largely driven by the perceived health benefits of tea. In response to this growing demand, the Indian tea industry has diversified its portfolio, introducing a wide range of tea varieties to cater the consumer tastes and preferences. This strategic shift has opened up new market opportunities both within the country and in international markets.

Opportunities and Threats

Global tea production and consumption have been steadily increasing every year. The key challenges faced by the industry includes selling prices that fail to keep pace with the rising costs like escalation of salaries and wages and other input costs such as gas, electricity, fuel, pesticides, and fertilizers. Additionally, global warming and climate change affects tea harvests and quality of teas.

Source: J Thomas Statistics 2024

SEGMENTWISE PERFORMANCE

The Company operates in a single segment business and is engaged in the business of cultivation and manufacture of both CTC and Orthodox Teas. The teas are marketed and sold either through auction or through private channels. The performance is covered under the section ‘Financial Results in the Directors Report.

OUTLOOK

The Tea Industry in North India comprising Assam and North Bengal produces 82% of countrys total production. The viability of the tea industry continues to be adversely affected by the dual challenges of volatile market dynamics and the regressive impact of extreme climatic conditions.

Further, escalation in salaries, wages and other input costs is expected to drive up overall cost. However, in spite of this scenario, the outlook for the tea industry remains positive and encouraging because of the increased demand and strong consumer focus on health and wellness. The Company remains committed to enhancing operational efficiency, producing superior-quality teas at lower costs and adopting innovative agricultural and manufacturing practices. Additionally, efforts are underway to identify and address trade barriers to unlock new growth opportunities in both domestic and international markets.

RIKS & CONCERNS

The tea industry remains highly susceptible to the vagaries of weather, which play a major role in determining overall production. Erratic rainfall patterns with fluctuating ambient temperatures have become increasingly common across all tea-growing regions of the North East, adversely affecting crop yields during the peak harvesting months. Additionally, as a labour intensive industry, it continues to face significant challenges due to shortage of labour during peak seasons, which remains a major cause of concern.

INTERNAL CONTROL SYSTEMS

The Companys internal financial control framework is well-aligned with the size, nature and regulatory requirements of its business. The Company has engaged reputable Chartered Accountants for conducting internal audit. These audits provide independent assurance on the effectiveness of internal controls. The Audit Committee reviews the Auditors observations and recommends corrective measures for implementation, thereby reinforcing the Companys commitment to sound governance and operational integrity.

FINANCIAL PERFORMANCES

During the current year under review, revenue from operations of the Company stood at 16,599 lakhs (P.Y. 11,680 lakhs). Profit after tax of your Company stood at 10,140 lakhs (P.Y. 188 lakhs).

RATIO ANALYSIS

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

Sl No.	Ratios	2025	2024	% Change	Explanation if the change is more than 25%
1.	Debtors Turnover (Times)	487.11	187.82	159.35	Change is due to increase in Sales and decrease in Trade Receivables.
2.	Inventory Turnover (Times)	71.83	30.38	136.44	Change is due to increase in Sales.
3.	Interest coverage ratio	-	-	-	-
4.	Current Ratios	8.99	2.36	280.93	Change is due to increase in Current Assets.
5.	Debt Equity ratio	-	-	-	-
6.	Operating margin (%)	61.02	1.07	5602.80	Change is due to increase in Earnings before Interest and Tax.
7.	Net profit margin (%)	63.13	1.66	3703.01	Change is due to increase in Net Profit.
8.	Return on Net Worth (%)	75.97	1.60	4648.13	Change is due to increase in Earnings before Interest and Tax

HUMAN RESOURCES

The Tea industry is inherently labour intensive and plays a vital role in generating employment for a significant segment of the population residing in and around the tea plantation areas. The Company continues to focus on fostering a work culture that emphasizes performance, accountability and employee well-being. Your Company has employed over 3632 personnel at its tea estates and other establishments in India as on 31^st March, 2025. Tea plantation workers and their families are provided with housing, healthcare, educational facilities, provident fund, gratuity and other benefits. Your Company believes in employee empowerment across the entire organization to achieve organizational effectiveness. Industrial relations in all tea estates and other establishments continued to be harmonious throughout the year. 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 this 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.