Peria Karamalai Tea & Produce Company Ltd Management Discussions

a. Industry Structure & Development

During the financial year 2024-25 India produced 1284.80 million kg of tea compared to 1393.70 million kg of tea in 2023-24 and degrown by 07.81 %. In 2024-25 South Indian Tea industry produced 226.80 million kg of tea compared to 236.70 million kg of tea in 2023-24 and de grown by 4.18% in line with Indian Tea Industry. In 2024-25 North India produced 1058 million kg of tea compared to 1157 million kg of tea in 2023-24 and de grown by (8.56) %.

All India auctions average sale price stood at Rs.199.30 per kg in 2024-25 compared to Rs.169.02 per kg in 2023-24 Increased by 30.28 per kg due to shortfall in supply compared to previous year. North India average sale price was Rs. 221.57 per kg in 2024-25 compared to Rs. 187.39 per kg in 2023-24 and increased by Rs.34.18 per Kg. South Indian tea average sale price was Rs.130.74 per kg in 2024-25 compared to Rs.113.56 per kg in 2023-24 and Increased by Rs.17.18 per kg.

Export of tea from India was 254.67 million kg in 2024-25 compared to 231.69 million kg in 2023-24 and increased by 22.98 million kg due to slightly export demand.

b. Opportunities & Threats

Automation of tea processing in the light of Global competition and shortage of estate workers is imperative for future growth of tea industry. Sharing the social cost by the State Governments will reduce the cost of production and thereby increase the competitive strength of Indian tea

• Increase in Labour wages.

• Inflated price of inputs like fertilizers, firewood, Diesel etc.

• Erratic weather, global warming effect.

• Deforestation

• Increasing trend of pest and disease.

• Dwindling of labour force.

• Longer period of dry spell.

c. Segment wise Performance

The price of orthodox tea is attractive and stable. Our company has been producing and selling of good quality of orthodox tea from the financial year 2018-19 onwards as a diversification.

Tea and other crops business accounted for 84.11% of the total revenue of the Company, Income from power generation is 1.73 % and Investment income accounted for 14.16 %.

d. Forward looking statements / Outlook

Certain statements included above may be forward looking and would involve number of risks uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information / future events or otherwise.

e. Risk & concerns

Risk management is an integral part of the business process. With the help of experienced professionals, the company mapped the risks at the business processes and enterprise levels and evolved a risk management framework. Risk mitigating measures have been identified and these would be periodically reviewed by the Board of Directors.

During the financial year 2024-25, our total tea production stood at 25.58 lakh kgs, compared to 28.16 lakh kgs in the previous year, reflecting a decline of 2.58 lakh kgs approximately 9.16%. This shortfall was primarily due to a delay in rainfall, with the first significant rain arriving only at the end of May 2024.The impact was most pronounced in the first quarter, where we experienced a production shortfall of 3.73 lakh kgs.

f. Internal Control

The Company has adequate internal control system to monitor internal business process financial reporting and compliance with applicable laws. The internal control system ensures that all assets are protected against loss from unauthorized use and all transactions are recorded and reported correctly. The Company periodically reviews the adequacy and effectiveness of the control systems. The Audit Committee of the Board assures the existence of effective internal control environment.

g. Discussion on financial performance with respect to operational performance

This section is covered in the Boards Report under the section of financial results and operation.

h. Human Resource

Relationship with employees at all level remains cordial. Training and development of employees continue to be an area of prime importance. The devotion and

commitment of employees has enabled the Company to fulfil its targets and deadlines in time. The total number of employees on the rolls of the Company as on 31st March 2025 was 1042.

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

j. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.