James Warren Tea Ltd Management Discussions

BUSINESS OVERVIEW

The Company is engaged in cultivation, manufacture and sale of tea. The Company operates four tea estates, all of which are located in the South Bank of Upper Assam, a region renowned for producing high-quality Assam teas.

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

Your Company remains focused on enhancing its turnover through continuous improvement in tea yield, quality and operational efficiency. In keeping with its commitment to quality, sustainability and traceability, your Company follows an integrated plantation-to-manufacturing model and does not purchase bought leaf in any of its factories which ensures complete control over the cultivation and manufacturing process, enabling the Company to consistently maintain the highest standards of quality and integrity.

INDUSTRY STRUCTURE & DEVELOPMENTS

Global tea production in 2025 increased to approximately 7,266 million kilograms from 7,087 million kilograms in 2024. Indias contribution to the global tea production also witnessed an increase during the year, with production of approximately 1,370 million kilograms, as compared to 1,304 million kilograms in the previous year.

Tea continues to remain one of the most widely consumed beverages worldwide, with robust demand across domestic as well as international market, contributing substantially to the nations economy through foreign exchange earnings. In India, tea consumption has increased in the recent years due to its health benefits. In response to evolving consumer demand, the Indian tea industry has expanded and diversified its portfolio by introducing a wide range of tea varieties, blends and value-added offerings. This strategic evolution has created new growth opportunities both domestically and internationally while enabling producers to cater to the changing consumer tastes and preferences.

Production in Assam and Rest of India

(Chart showing Production in Assam and Rest of India from 2015 to 2025. Y-axis: Production 0 to 800. Legend: Assam, Rest of India. Quantity in million kg)

Opportunities and Threats

Global tea production and consumption have shown a consistent upward trend. 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. In addition, the industry remains vulnerable to the adverse effects of climate change and global warming which impact the tea yields and quality posing significant challenges to sustainable tea cultivation and long-term industry growth.

Export & Retention of Indian Tea

(Chart showing Export & Retention of Indian Tea from 2016 to 2025. Y-axis: Production 0 to 1400. Legend: Export, Retention. Quantity in million kg)

Source: J Thomas Tea Statistics 2025

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 ensuring broad market access. 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 approximately 83% of countrys total tea production. The tea industrys viability, however continues to be impacted by the twin challenges arising from volatile market dynamics and the escalating impact of extreme climatic conditions.

The tea market is highly sensitive to the fluctuations of demand and supply, weather conditions, quality differentials and intensity of international competition. Further, the profitability of the Company is likely to be impacted due to escalation in salaries, wages and other input costs, leading to increase in the overall cost. However, in spite of this scenario, the outlook for the tea industry remains positive driven by evolving consumer preferences, growing demand and continued improvements in the countrys distribution infrastructure. The Company remains committed to producing premium-quality teas in a cost-efficient manner by leveraging innovative agricultural and manufacturing practices. At the same time, sustained efforts are being made to identify and mitigate trade barriers, enabling the Company to capitalize on emerging growth opportunities in both domestic and international markets.

RISKS & CONCERNS

The tea industry is largely dependent on climatic conditions, with weather patterns playing a critical role in determining the overall production. As the tea industry operates in a dynamic business environment, it is exposed to various internal and external risks that could impact operational and financial performance. Erratic rainfall patterns and fluctuating ambient temperatures have become increasingly frequent across all tea-growing regions of the North East, adversely affecting crop yields, particularly during the peak harvesting season. The fluctuating temperature levels have resulted in the growth and proliferation of pests, thereby increasing the cost of crop protection. Additionally, being a labour intensive industry, tea cultivation faces significant challenges arising from labour availability during peak seasons. Any shortage of labour may adversely affect timely plucking, thereby impacting crop quality and crop productivity.

INTERNAL CONTROL SYSTEMS

The Company has in place adequate system of internal financial control commensurate with the size, nature and regulatory requirements of its business. The systems are reviewed from time to time. Your Company has engaged reputable Chartered Accountants for conducting periodic internal audit. These audits evaluate the adequacy and effectiveness of the Companys internal control systems and provide an independent assurance over the internal controls. The Audit Committee reviews the audit reports and evaluates the observations and recommends corrective measures for implementation.

FINANCIAL PERFORMANCES

During the current year under review, revenue from operations of the Company stood at 11,139 lakhs (P.Y. 16,599 lakhs). Profit after tax of your Company stood at 1,242 lakhs (P.Y. 10,140 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 serves as a significant source of employment, providing livelihoods to a large section of the population residing in and around tea plantation regions. The Company believes that a progressive organization can attain its full potential by developing and maintaining a cordial work culture that promotes happiness at the workplace. Your Company has employed over 3,538 personnel at its tea estates and other establishments in India as on 31st March, 2026. Tea plantation workers and their families are provided with housing, healthcare, educational facilities, provident fund, gratuity and other benefits. Employee welfare remains a key focus area and extends beyond our workforce to include support for employees family members. Industrial relations across all the tea estates and other establishments remained cordial throughout the year. Focused efforts towards the effective deployment and utilization of labour resources across the tea estates have contributed 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.