terai tea co ltd Management discussions

Annexure "F" to the Directors Report

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

India is one of the largest Black Tea producer in the world producing approximately 1371 million kgs during the financial year 2022-23. Markets have been marginally higher for good quality teas whereas common medium teas remained steady resulting in increase in realization than the previous year.

During the year 2022 world tea production dropped marginally to 6422 M. Kgs against last year 6452 M. Kgs - North Indias crop gained by + 25 M. Kgs (+ 2%) - South India crop dropped marginally by 3 M.kgs (-1 %) - over all Indian crop touched 1365 M. Kgs out of which STG share 52% and organized growers 48% - the crop increase is mainly in the STG Sector.

After decades low export of last year - the export front picked up during 2022 and it touched 227 M.Kgs against last year 196 M. kgs - higher export reduced the retention quantity to 1138 M. Kgs against 1133 M.kgs of 2021.

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

Weather plays an important role in the success or failure of any agriculture industry including plantations. Tea is a perennial crop and hence with climate change, repeated erratic rainfall and weather conditions affects the production of tea crops. Further, tea being the labour intensive industry, shortage of labour in peak season and substantial increase in labour costs, high social cost and other input cost remains the major cause of concern for the industry.

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 working ardenis 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.

FINANCIAL PERFORMANCE

a) The report of the Board of Directors may be referred to for Financial Performance.

b) Details of Significant changes (i.e. changes as compared to the immediately previous financial year) in key financial ratios as as under -

i) Inventory Turnover: Increase in sales resulting into higher amount of materials consumed and traded goods purchased.

ii) Net Profit Margin % : Lower Profit after Tax with higher Turnover due to last year higher nonoperating Income.

iii) Change in Return / Net-Worth : Higher Profit in 2021-22 due to receipt of compensation not received in 2022-23.

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.

CAUTIONARY STATEMENT

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.

Registered Office:

"Ezra Mansion"

10, Government Place (East)

Kolkata 700 069

Dated, 21st day of August, 2023

By the order of the Board

For Terai Tea Company Limited

Sd/-

AJIT KUMAR AGARWALA

Managing Director DIN :00265775