Shri Vasuprada Plantations Ltd Management Discussions

Annexure C A. ECONOMIC REVIEW

The global economy exhibited uneven, yet steady growth across regions in 2024. A notable trend was the slowdown in global manufacturing, particularly in Europe and parts of Asia, due to supply chain constraints, geopolitical tensions and weak external demand. Conversely, the service sector remained a key growth driver in many economies. Inflationary pressures eased in most regions, although service inflation remained persistent. Monetary policies diverged, with some central banks cautiously lowering interest rates while others maintained a restrictive stance. While the global decline in inflation was a major milestone in 2024, downside risks to global growth started to emerge towards the end of the year and now dominate the outlook for 2025. The uncertainties surrounding tariffs outcome following the US election verdict in November, 2024 and its repercussion on global trade shroud the prospects of global economy. Economic policy uncertainty has increased sharply, especially on the trade and fiscal fronts. Various risks like escalation in regional conflicts, monetary policy remaining tight for too long and possible resurgence of financial market volatility dominate business sentiments across the globe. Despite these challenges, economies are expected to adapt by leveraging technology and strategic planning to maintain resilience and stability.

Against the uncertain global economic backdrop, the Indian economy remained strong and resilient, underpinned by strong domestic fundamentals and proactive policy measures. Growth has been driven by strong performances in agriculture and services, coupled with stable private consumption and macroeconomic stability. Government initiatives, including those promoting digital transformation, financial inclusion and ease of doing business, further strengthened the economy. Retail inflation based on Consumer Price Index peaked at 6.21% in October, 2024 and softened in subsequent months to reach 3.34% in March, 2025 as food price pressures moderated. As the inflationary pressures receded, the Monetary Policy Committee of the RBI unanimously decided to reduce policy repo rate by 25 basis points to 6.25% in February, 2025 after a gap of almost five years.

The RBI projects 6.5% growth in Indias real GDP in Financial Year 2026 supported by strong momentum in domestic demand amid cooling food inflation, tax benefits and lowering borrowing costs. External factors such as rising US tariffs and global trade pushbacks will be the headwinds. The uncertain and volatile global environment could further defer the revival in private capital expenditure. With strategic policy initiatives, robust domestic demand and structural reforms, India is wellpositioned to sustain its upward trajectory. The World Bank forecasts 6.7% growth for Financial Year 2026 and Financial Year 2027, reaffirming Indias position as the fastest growing major economy.

B INDUSTRY STRUCTURE & DEVELOPMENT, SEGMENTWISE / PRODUCTWISE PERFORMANCE, OPPORTUNITIES & THREATS AND OUTLOOK

TEA

The global tea production in calendar year 2024 shows decline as compared to previous year due to lower crop in India and Uganda. China continues to dominate tea production, with an annual output accounting for a significant portion of the global total. Indias tea output in the calendar year 2024 touched a fouryear low at 1285 million kgs as adverse weather impacted the output across key producing regions in all major states in the northern and southern parts. Tea production during 2024 was down by 7.8% from the production in the year 2023, wherein it had touched a record of 1394 million kgs. The dip in the production during 2024 was more pronounced in North India, where the output was lower by about 100 million kgs. In South India, the decline was about 10 million kgs. India has achieved a significant milestone in the global tea industry, surpassing Sri Lanka to become the worlds second largest exporter of Tea in 2024. The country exported an impressive 255 million kgs of tea last year making a substantial growth in its export figures, despite global market uncertainties caused by geopolitical tensions. South Indian tea made a higher contribution to exports of the beverage in 2024.

Tea Boards measures ensuring quality compliant teas to an early closure of estates in North India sent out a strong signal in the market. In 2024, Indian tea auction prices experienced a significant upward trend, driven by a combination of reduced production and increased demand, both domestically and internationally. The average auction price for tea across India marked an approximately 18% increase from the previous year. The surge in tea prices was bolstered by strong export demand from countries such as Russia, Iran, Iraq and UAE.

The production structure in Indian tea industry has undergone a paradigm transformation in the last couple of decades with the growth of the small tea growers and bought leaf sectors and their contribution to production surpassing 50%. Besides, the traditional sectors faces huge challenges in terms of absenteeism and low productivity. The growing phenomenon of migration from rural to urban is already affecting the tea plantations. The last decade has witnessed tea prices growing at a CAGR of 2.88% only, but trailing the escalating costs of inputs at 1012% CAGR. The industry despite the financial stress it has been passing through has been coping reasonably well with the reformative initiatives ushered in by the Government. It is anticipated that the positive trend in tea prices will continue into 2025 supported by ongoing export demand and steady domestic consumption. The implementation of measures like the mandatory 100% auction of dust category teas and early closure of production season in North India are expected to further stabilize prices and benefit producers.

The Company produced 32,23,423 Kgs of tea during the year ended 31st March, 2025 against 36,17,561 Kgs for the same period last year. The average price for Assam teas realised by the Company during the year was 270/ Kg and for South Indian teas was 137/ per Kg.

COFFFEE

The world coffee output for 202425 is forecast at 174.9 million bags compared to 168 million bags last year. This increase is primarily on account of rebounding output in Vietnam and Indonesia. The crop in Brazil, the largest producer, is feared to run low as the country experienced one of its worst droughts during August and September followed by heavy rains in October that damaged the flowering of 202526 crop. Global consumption is expected to rise 5.1 million bags to 168.1 million bags, with the largest gains in the EU, the US and China.

Indias coffee output for 202425 is provisionally estimated at 3.63 lakh tons against 3.60 lakh tons during 202324. However, there could be a downward revision in the production estimates as the flowering was impacted by higher than normal temperatures in FebruaryApril with the prolonged dry conditions during the premonsoon period while continuous and excess rains during July triggered berry droppings and diseases in several coffee growing pockets.

Raw coffee prices in India tracked the global trend and reached record highs. Farmgate prices registered an increase of 4060 percent, depending on the grades, during the year on the surging global trend. It is expected that the prices shall remain buoyant in the near term over tight supply issues from key producers.

For the third consecutive year, Indias coffee exports have exceeded the government target, driven by rising prices and global demand. In the calendar year 2024, exports saw a 45 percent jump in dollar value terms and the shipments were up by 47 percent. Indian coffee exports also gained as European buyers front loaded their purchases during the year the ahead of the implementation of the European Union Deforestation Regulations (EUDR) norms, which has now been deferred. Italy continues to be the largest buyer of Indian coffee.

Widespread rain across the countrys key coffee growing regions in Karnataka and Kerala in March has raised the expectations for the forthcoming 202526 crop. This comes amidst prices continuing to rule at elevated levels in line with global price trends. Sustainability will take centrestage as the industry navigates stricter environmental mandates and embraces ecofriendly practices. Domestically, the growing popularity of premium coffee and initiatives to boost inhome consumption present promising opportunities.

The Company produced 3,36,773 kgs of coffee comprising of 84,782 kgs of Arabica and 2,51,991 kgs of Robusta during the year ended 31st March, 2025 against 3,27,458 kgs comprising of 1,06,144 kgs of Arabica and 2,21,314 kgs of Robusta harvested for the same period last year. The average price for coffee realised by the Company during the year was higher at Rs. 448/ per kg as compared to 286/ per kg last year.

RUBBER

For the rubber sector, 2024 was a year in which climatic change exerted a significant impact on production across growing regions. Prolonged dry spell, torrential rains, flooding and fungal diseases hit production drastically. While some regions showed minimal production growth, others saw diminished output from extended moisture stress due to dry weather. India, however bucked the declining trend in natural rubber production across countries, recording a 2.1% growth in NR production during 2024 at 8,57,000 tons, up from 8,39,000 tons in the previous year. Consumption recorded a significant increase of 4.9% to 14,16,000 tons compared to 13,50,000 tons in the previous year.

NR prices began climbing after an 11year lull, briefly reaching near record levels last seen in 2011. The benchmark grade, RSS 4, grew 52 per kg yearonyear, maintaining higher price levels for much of the year. The market in 2025 is poised for continuous growth driven by sectors such as automobiles and healthcare. Chinas economic stimulus packages, anticipated monetary easing and persistent supply constraints in nations like Thailand and Indonesia are expected to support demand.

Global natural rubber production is expected to fall short of consumption for the fifth consecutive year in 2025 as higher prices fail to encourage tapping in major producing countries such as Indonesia and Vietnam. This production shortfall is likely to sustain firm global prices. According to Association of Natural Rubber Producing Countries (ANRPC), global production is expected to rise by 0.3% to 14.9 million tons in 2025, while demand is projected to grow at a much faster rate by 1.8% to 15.6 million tons. NR production and consumption in India are forecast to reach 8,75,000 tons and 14,25,000 tons respectively in 2025. Demand from China and India the worlds largest consumers of natural rubber, is expected to rise 2.5% and 3.4% respectively in the year 2025. To address the challenges like climatic change, shortage of skilled labourers and diseases in rubber plantations, the Rubber Board has geared momentum for new avenues in research and development, especially in areas like use of drones in spraying, climate resilient clones and participatory research and extension programmes etc.

The Company produced 15,49,104 kgs of rubber during 202425 as against 11,67,320 kgs in the previous year. The average price realised by the Company during the year was 206/ per kg as against 170/ per kg last year.

C RISKS & CONCERNS

Risk may be defined as the possibility of occurrence of an event that can adversely affect the achievement of companys objectives and goals. Risk is inherent in every business, whether it is of financial nature or nonfinancial nature. Thus management of risk is very important. Risk management is a structured, consistent and continuous process, applied across the organisation for the identification and assessment of risks, control and exposure monitoring. Better risk management techniques provide early warning signals so that the same may be addressed in time. The essence of risk management lies in reducing risks to an acceptable and manageable level on an ongoing basis. To ensure proper risk management, the Company has established procedures for regular review. The mitigation plans for all the key risks are aligned with the Companys strategic business plans and performance management system which are reviewed by the Board of Directors on a periodic basis.

Plantation industry is heavily dependent on the unpredictable forces of nature. Frequent changes in the weather pattern and increasing extremes in localized weather have become serious everyday challenges to contend with in the estates. Increase in consequential pest activity poses another potential risk to maintaining economically sustainable production and yields. The industry is also highly labour intensive and subject to stringent labour laws. Substantial increase in wages, high social and infrastructure costs, increasing energy and other input costs remain the major problems for the plantation industry. Shortage of workers who seek more lucrative employment outside plantations during the peak season in some pockets is also a cause of concern. To address these issues, it is imperative to improve labour productivity through mechanization. The Companys strategy is focused on enhancing performance by creating points of differentiation in both its existing and new product offerings, elevating its position in the value chain and striving to reduce costs. The Company has made substantial investment in irrigation in earlier years to minimise the import of crop due to change in climatic conditions. The Company follows TRA and UPASI guidelines on good agricultural practices for its estates on field practices and integral pest management. The Company has invested in Trustea certification programs to manage environmental risks and ensure long term sustainability of its tea operations. It also helps to mitigate possible risks related to food safety and quality of product. The Company is committed to embracing superior agricultural practices that will invariably enhance the yield of its crops.

D. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company adopts a structured approach and prioritizes the implementation of effective checks to ensure operational efficiency and accuracy. The Company maintains an appropriate and comprehensive system of internal controls that aligns with its size and the nature of its operations. The Companys internal control system provides reasonable assurance for safeguarding assets and ensuring proper authorization, recording and reporting of transactions. The Internal Auditors, Cost Auditors, Secretarial Auditors and the Statutory Auditors are also responsible for checks during the course of their respective audits. The Companys Internal Auditors conduct audits across various departments and areas. The Audit Committee of the Board reviews audit reports submitted by the Internal Auditors and oversees the implementation of corrective actions. Additionally, the Statutory Auditors provide assurance regarding the adequacy of the Companys internal control systems. Overall, these strong auditing mechanism helps to ensure that the Companys internal controls remain effective and aligned with best practices, promoting transparency and accountability within its operations.

E. FINANCIAL & OPERATIONAL PERFORMANCE

The details of Financial Performance and Operational Performance have been provided in the Report of the Directors.

F. HUMAN RESOURCE DEVELOPMENT / INDUSTRIAL RELATIONS

The Company is committed to promoting a safe, collaborative and positive work environment that encourages strong relationships between workers and staff. The Companys constant endeavours are on sustaining an engaged and skilled workforce. The Company prioritizes delivering value to its employees, enhancing their overall experience and maintaining functional excellence across all levels of the organization. The Companys senior management ensures they are readily accessible to effectively address any grievances that arise. As of 31st March, 2025 there with 2728 permanent employees on the rolls of the Company. On the industrial relations front, the Company has maintained harmonious labour relations, with a strong emphasis on collaboration, transparency and employee welfare.

G. SIGNIFICANT CHANGES (MORE THAN 25%) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS

Sl. No. Key Financial Ratios	31.03.2025	31.03.2024	Change (%)
1 Debtors Turnover Ratio	44.47	75.23	(41%)
2 Interest Service CoverageRatio	3.95	1.44	174%
3 Operating Profit Margin	3.58	(8.46)	(142%)
4 Net Profit Margin	4.64	(8.53)	(154%)
5 Return on Net Worth	0.01	(0.06)	(120%)

For detailed explanation regarding significant changes in the abovementioned ratios, please refer to Note no. 49 of the Notes to Standalone Financial Statements for the financial year ended 31st March, 2025.

During Financial Year 202425, there was no significant change in Inventory Turnover Ratio, Current Ratio, Debt Equity Ratio compared to that of Previous Year.

H. CAUTIONARY STATEMENT

The statements made in this Managements Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be "Forward Looking Statements" within the meaning of applicable Securities Laws & Regulations. Actual results may differ materially from those expressed or implied due to external and internal factors beyond the control of the Company.