Terai Tea Co Ltd Management Discussions

Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 stipulates disclosure under specific heads which are given in the following paragraphs and which continue to be followed in the usual course of the Companys business over the years in discussion amongst the Directors and Senior Management Personnel.

INDUSTRY STRUCTURE AND DEVELOPMENT

The Companys main business is manufacture and sale of Tea. Tea being a seasonal industry manufacture of tea commences from around mid-March and continues till around mid-December. The crop yield depends to a large extant on the weather conditions. The plantation area being constant the yield depends on irrigation facilities, better soil management techniques, weather etc. Necessary steps are initiated by the Company for improving the yield and quality of crop in its gardens. The Company lays stress on improving the quality. Use of vermi compost in the plantation areas is in vogue for sustaining the quality of soil as well as for improving the yield. The Company adopts good tea plantation practices to maintain the yield and has embarked on production of quality teas. India is the second-largest producer of tea globally. Indian tea is one of the finest in the world owing to strong geographical indications, heavy investment in tea processing units, continuous innovation, augmented product mix, and strategic market expansion. India exports tea to more than 25 countries throughout the world. Russia, Iran, UAE, USA, the UK, Germany, and China are some of the major importers of tea from India. Indias tea export soared to a 10- year high of 255 million kilograms in 2024, marking a significant achievement despite global market uncertainities caused by geopolitical tentions. The country saw a robust 10 percent growth in tea exports compared to 231.69 million kilograms recorded in 2023.

OPPORTUNITIES AND THREATS:

The continuous promotional efforts and better marketing and brand building initiatives taken jointly by the Government/Tea Board including TRUSTEA programmes are likely to benefit the industry in the long term. Erratic weather conditions and shortage of labour are the main threats to the industry. Inspite of all technological advancement tea remain totally a rain dependent crop. Global Warming induced drastic climate change is effecting all agriculture crop including tea.

Climate change have changed the character of monsoon to no rain for long period with heavy rain for short periods.

RISK AND CONCERN:-

The Management has to constantly monitor the risks and concerns associated with the industry by ensuring adequate irrigation facilities to the Plantation areas, soil enrichment, protection of plantation against attacks by pests etc and is also subject to changing market conditions and the trends. Further increased supply in the global market and slowdown of the economic growth may also adversely affect the Companys business prospects.

SEGMENT ANALYSIS AND REVIEW

The Company is engaged in the Manufacturing of Tea, and Trading of Sugar, Raw Jute and others Merchandise.

INDIAN TEA MARKET OUTLOOK

The tea industry in India is being driven by the high penetration of the beverage in the country across socioeconomic classes. Indias healthy economic growth and the subsequent rise in the middle-class population are also proving to be catalysts for the industrys growth as the consumers are preferring premium brands. The rising demand for the packaged variety of the beverage in both urban and rural areas due to lesser chances of adulteration, convenient storage, and their superior quality is further aiding the tea industry in India. The demand for packaged varieties with natural ingredients is also witnessing a growth.

The Tea market is projected to grow at a CAGR of nearly 4.5% in the forecast period of 2023-2028. The market in the country is projected to witness a further growth in the forecast period of 2023-2028, growing at a CAGR of 4.2%. In 2026, the tea industry in India is expected to attain 1.40 million tons.

FINANCIAL REVIEW & ANALYSIS

The Companys financial position is strong enough which has helped Company to pass through in turbulent times. The development work in garden is always given top priority for improvement in quality as well as quantity. The surplus fund of the Company is deployed in such a way that reasonable returns are derived.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has laid down guidelines, procedures and policies for better management control which are periodically tested and supplemented by an extensive internal audit programme. Significant findings are placed before the Audit Committee and the corrective measures are recommended for implementation. In the opinion of the management, the existing internal checks and controls are effective and adequate.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The relationships were cordial with the employees throughout the year. Tea Industry being highly labour intensive, prime focus is always on the Labour class. The Company carries out various program for development of its executives at all levels. During the year the Company carried out restructuring exercise at key level for improvement in plantation activities and overall corporate performance. The Company would like to record appreciation of the whole hearted support and dedication from employees at all levels in maintaining smooth production and manufacture of tea from all the Tea Estates during the year.

RATIO ANALYSIS

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

The forward-looking statements and the views expressed in the Management Discussion and Analysis Report are based on certain assumptions. The actual results, performances or achievements may differ materially from those stated therein. The Company would not be held liable, in any manner, if the future turns out to be quite different, even materially.