The Grob Tea Co Ltd Management Discussions

ANNEXURE “A”

(Forming part of Directors Report for the financial year ended 31st March, 2024)

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.

Industrial Structure &Development: -During the year 2023 world tea production rose to 6603 M. Kgs compare to 6482 M. kgs of 2022 i.e. an increase of almost 2% over previous year. Overall Indian Crop remain more or less same as of last year at 1368 M. kgs against previous year 1366 M. Kgs out of which STGs share is 53% and organized sector is 47%.

Export: - after closing a higher export in 2022 the export quantity dropped to 227 M. Kgs against previous years 231 M. Kgs lower export increased the retention quantity to 1140 M. Kgs against 1135 M. Kgs of previous year.

Opportunity and Threat: Ever increasing production with almost stagnant internal consumption and with decreasing export have resulted in serious mismatch of supply and demand in order to reduce the production Tea Boards order for early closer have not yielded the desired result production have to be curtailed in line with demand and with higher export & improve of internal consumption can tilt the balance in favour of the Tea Industry.

In spite of all the technical development the tea crop is totally rain dependent and erratic climate change frequently jeopardize the crop/harvest. The ill effect of climate change is being felt in all the tea growing regions of the country particularly the N.E. your Company have taken up a comprehensive project (project work on climate change PWCC) to mitigate the ill-effect to some extent and improve the micro climate around the gardens. Capacity and efficiency of the existing irrigation sets are being improved to a large extent to minimize the effect of early drought. Climate change have changed the character of monsoon to no rain for longer period with heavy rain for shorter periods.

Product-wise Information: -During the year under review all India production is up by just 2 M. Kgs compare to previous year export dropped by 4 M. kgs which increased the retention by 5 M. Kgs - due to the excess supply situation the average price realization also dropped by 3.50%.

Outlook: -current year though started with drought like situation but weather improved gradually and by end of May your Company is ahead in crop by 0.91 lac kgs or 14% due to in general lower production the market has responded favourably and your Companys average price upto May 2024 is up by 3% over previous year.

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.

Discussion on Financial Performance with respect to Operational Performance: There have been series of significant changes in the overall market scenario in last few years. Over the last four years we have been faced with many a difficult circumstance like vagaries of weather due to climate change, severe pest infestation, significant rise in labour wages due to statutory changes and also the recent pandemic, all have had significant impact on Companys profitability. The disclosures under financial performance with respect to operational performance are covered by the respective sections i.e., “Financial Highlights” and “State of Company Affairs and Future Outlook” under the Directors Report.

Internal Control System and their Adequacy: The Company has an effective system of internal control commensurate with its size and it ensures operational efficiency, accuracy in financial reporting and compliance of applicable laws and regulations at all levels of Management of the Company. These are reviewed from time to time and improved upon, where required. Internal Audits are conducted by Independent firms of Chartered Accountants and the reports are discussed with the operational heads by the CFO, Managing Director and Executive Director & CEO of the Company, and thereafter, placed before the Meetings of the Audit Committee of the Board of Directors. Representatives of the Statutory Auditors, Cost Auditors and Internal Auditors are also invited at the Meetings of the Audit Committee as and when required. Corrective measures suggested at the Audit Committee Meetings are duly implemented.

Information regarding Human Resources/Industrial Relation

The Company deeply appreciates performance and cooperation of the employees for the year and to maintain this cordial relationship for the years to come. Human resources are the most valuable assets of the Company and thus adequate care is taken by the Company for their development and well being. Tea being an essentially labour intensive industry, the Employees are the mainstay of its operations. It is your Companys endeavor to provide safe, healthy and sustainable work environment in all the estates for the employees and their families. Your Company believes in employee empowerment across the entire organization in order to achieve organizational effectiveness. The Company employs over 3790 employees at its tea estate and other establishments in the country. The Industrial relations of the Company was cordial and there were no instances of employee disputes arising during the year.

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 therefor, including:

Details of any change in Return on Capital employed as compared to the immediately previous financial year along with a detailed explanation thereof:

Cautionary Statement: Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to factors beyond control.