Tyroon Tea Company Ltd Management Discussions

Industrial Structure and Development

India is the largest producer of black tea, producing approximately 1383 million kg during FY 2025-26 as against 1295 million kg during FY 2024-25. The all-India average tea price during FY 2025-26 was Rs. 190 per kg , compared to Rs. 202 per kg in FY 2024-25. India is the second-largest tea producer in the world after China.

Climate change continues to pose significant challenges to the tea industry, as tea cultivation remains highly dependent on weather conditions. Erratic climatic conditions in the tea-growing regions have adversely affected tea production, including at the Companys tea estate.

The contribution of small tea growers to Indias total tea production continues to increase each year and now accounts for more than 50% of the countrys total tea output, while production from the organised sector has been witnessing a consistent decline. Global tea consumption is expected to grow as tea continues to gain recognition as a healthy beverage. Domestic tea consumption in India is also growing, at a slower rate than previously projected.

The Companys principal business comprises the cultivation, manufacture, and sale of tea. Tea production is significantly influenced by climatic conditions. The Company continues to adopt improved agricultural practices with a view to enhancing crop productivity and maintaining quality standards.

Outlook

The performance of the tea industry depends largely on geographical and climatic conditions, which are beyond the control of the Company. The industry is highly labour-intensive, and wages are determined through periodic wage settlement agreements. Such settlements often lead to significant increases in labour costs, irrespective of improvements in productivity or price realisation. Further, the continuing geopolitical conflicts involving Russia-Ukraine and developments in the Middle East, including the USA-Iran-Israel conflict, along with global trade disruptions, have adversely affected exports and tea prices. The Company remains committed to its long-term strategy of continuous uprooting and replanting with high-yielding quality clones, coupled with the regular up gradation of its manufacturing facilities. These initiatives are expected to strengthen the Companys operational efficiency and enable it to meet future challenges effectively.

Internal Control Systems and Their Adequacy

The Company has an adequate internal control system designed to ensure the efficient utilisation of its resources, accuracy of financial reporting, safeguarding of assets, and compliance with applicable laws, regulations, and internal policies. The Statutory Auditors and Internal Auditors periodically review the effectiveness of the internal control systems and recommend corrective measures wherever necessary. The Audit Committee also reviews the adequacy and effectiveness of the internal control framework and discusses the observations of the Statutory Auditors before reporting its recommendations to the Board of Directors.

Financial and Operational Performance

During FY 2025-26, the Company reported net sales of Rs. 35.00 crores as compared to Rs. 41.23 crores in the previous year. The average sales realisation declined from Rs. 283 per kg in FY 2024-25 to Rs. 261 per kg in FY 2025-26.The Company reported a loss after tax of

Rs. 234.88 lakh for the year ended 31 March 2026 as against a profit after tax of Rs. 330.79 lakh in the previous year. The decline in production coupled with lower average price realisation adversely affected the Companys financial performance, resulting in a loss during the year under review.

Human Resources and Development

The Company has approximately 1349 permanent employees at its tea estate. A Labour Welfare Officer has been appointed to oversee and monitor the welfare of the workers. The Companys tea estate is certified under Trustea, demonstrating its commitment to sustainability and to maintaining high standards of workers health, hygiene, and safety. The Company continues to strive to provide a safe, healthy, and sustainable working environment for its employees and their families.

The Company also operates a hospital, ambulance services, and dispensaries across its out- divisions to provide medical facilities to its employees.

Personnel

The Company firmly believes in employee empowerment as a means of achieving organisational effectiveness and sustainable growth.

Key Financial Ratios

Details of significant changes (i.e., changes of 25% or more as compared to the immediately preceding financial year) in the key financial ratios, along with explanations thereof, are provided in Note No. 41 to the Notes to the Financial Statements.