Jay Shree Tea & Industries Ltd

Directors' Report

We present the 78^th Annual Report of the Company along with the summary of Standalone and Consolidated Financial Statements for the year ended 31^st March, 2024:-

EQUITY DIVIDEND

As there is inadequate profit, the Board has decided not to recommend any dividend for the year.

SHARE CAPITAL

During the year ended 31st March, 2024 there is no change in the issued and subscribed capital of your Company. The outstanding capital as on 31st March, 2024 is Rs.1443.87 lakh comprising of 2,88,77,488 equity shares of Rs. 5/- each. The authorized share capital of the Company is Rs.6225 lakh. None of the directors or KMP of the Company holds instruments Convertible into equity shares of the Company.

TRANSFER TO RESERVES

The Board does not propose to transfer any amount to general reserve.

REVIEW OF PERFORMANCE

All India Tea production has increased marginally from 1343 mn. Kg last year to 1368 mn. Kg in the current year. Tea has become a wellness and lifestyle beverage and several new varieties and blends of tea are entering the market. The stable economic development of India and increase in buying capacity of rural Indian population augurs well for the industry's growth. Another source of support for the Tea industry in India is that packaged segment saw an uptick in volume.

The Chemicals & Fertilizers division of the Company maintained its quality standard. The Company continued to provide full support to farmers by making SSP of good quality available to them in maximum quantity to grow their production. The strong network of dealers, retailers and well known Annapurna Brand helped the Company to improve its market share.

All India sugar production in India is pegged at 32.30 mn tonnes compared to 32.80 mn tonnes last year. The supply of sugar in the Country is sufficient to meet the domestic consumption which is estimated to be at 28 mn tonnes. Exports are restricted from June 2022. This year diversion of sugarcane for ethanol manufacturing was 17 lakh tonnes via sugarcane juice/B heavy molasses as against 38 lakh tonnes last year.

The global uncertainty continued, however the Indian economy grew by 7% in 2023 making it 5^th largest economy in the world.

The major factors attributing to the operations of the company are:

i) Decrease in Assam, Cachar and Darjeeling crop with lower realization

ii) Increase in crop of Dooars

iii) Rising cost of labour and oil/gas, raising the cost of production

iv) The performance of the Single Superphosphate Plant at Khardah, West Bengal was destablised with the Government reducing subsidy w.e.f October 2023 (peak season) when the unsold stock with dealers was 22000 M.T.

v) Increase in the sugarcane crushing during the season

Tea Estates

All India production in 2023 was at 1368 million kg. compared to 1340 million kg. in 2022. The tea prices in India declined compared to last year as nearby 6500 mn. Kg of teas were produced globally compared to 6400 mn. Kg in 2022.

Your company's own production was lower at 152.07 lakh kg compared to 159.72 lakh kg last year. The bought leaf production was reduced from 13.59 lakh kg to 8.91 lakh kg. In view of the subdued tea market the price realization of your company on an average was lower by Rs.18/- per Kg. The market of Assam was down by Rs.35/-, Cachar by Rs.11/-, Darjeeling by Rs.34/- and Dooars and Terai by Rs.4/- per kg.

The daily wage of workers has increased considerably in the last few years. The components of production cost i.e coal, gas, oil and fertilisers have also gone up. During the year, Darjeeling first flush quality was affected by drought conditions. There were pest attack in one of tea estate due to dry weather. Contribution of small tea growers in the Country has gone up considerably, and they produce around 60% of the total tea production of the Country. They neither maintain quality standards nor has obligation to foot social cost bill. It is difficult for any organised sector to compete with such units.

The Government of Assam continued to provide relief to the Tea industry of Assam. We are thankful to the Government & its leadership for extending the benefit of interest subsidy at 3% on working capital and Orthodox subsidy @ Rs.10/- per kg for 5 years upto 2027-28 under Assam Tea Industrial Special Incentive Scheme 2020.

There is no material change and/or commitment affecting the financial position of the Company occurred between the end of the financial year and the date of this report.

The Jay Shree Chemicals & Fertilisers, Khardah

The all India sale of Single Super Phosphate declined by 21% over 2022-23. Unprecedented heat wave and deficient monsoon in West Bengal affected the sale of Single Super Phosphate. Adding to the woe was reduction in subsidy by the Government in mid-season by Rs.3332/- per tonne. The quality parameters maintained by your Company was well appreciated by the farmers of Bengal. The Government has raised the subsidy by Rs. 1264/- per tonne w.e.f 01.04.2024.

The figures of production and despatches are as under:

The Jay Shree Chemicals & Fertilizers, Gurugram

The unit is facing tough competition from copper smelter units for whom this is a by-product and which are coming up in nearby areas. The sale price of sulphuric acid was at times lower than the cost of production, going forward this competition might increase manifold. So looking to the size of plant and its viability your Company is exploring other avenues in the interest of all stakeholders.

The figures of production and despatches are as under:-

Sugar Division

Majhaulia Sugar in its sugar mill produced 43628 tonnes of white sugar in the year compared to 41048 tonnes last year. The sugarcane crushed was 542493 tonnes in the year compared to 517556 tonnes last year. The recovery in sugar season 202324 was 9.80%compared to 9.60% in the previous year i.e an increase of 0.20%. The Company continued with its cane development work and enthused farmers to cover further areas under autumn planting to increase the availability of sugarcane in the coming season.

The unit had set up a sugar refinery project to refine the sugar as well as to run the ethanol plant to its full capacity of 330 days a year. This could be done by diverting sugarcane juice during season time to ethanol plant. In order to stabilize the price of sugar in the Country, the Government of India did not permit use of sugarcane juice and/or B heavy molasses for production of ethanol in the current year. However the production for current and next season is likely to be more than sufficient for domestic consumption, these restrictions seems to be of temporary in nature. The Government has recently issued tenders for ethanol from B heavy molasses to consume this stock.

India's 2023-24 sugar production is estimated at around 32.3 mn tonnes compared to 31 mn tonnes last year with a consumption of around 28 mn tonnes. A total of 3.8 mn tonne was diverted towards ethanol manufacturing via sugarcane juice/B heavy molasses. There is superior prospects for integrated sugar companies.

The Government approved the National Policy on bio-fuels to achieve 20% blending of ethanol in petrol and has set the target of achieving it to 2025. Your Company is committed to harnessing the synergies between the sugar and distillery segments and current year crushing target is 70 lakh quintal of cane with improvement in recovery by 0.50% our Cane development work of last 3 years will help us in achieving the target.

The sugar industry in India continues to be dependent on the Government intervention and the following measures has been taken by the Government:-

a) Fair & Remunerative Price (FRP) of sugarcane for the sugar season 2023-24 revised to Rs.315 per quintal from Rs.305 per quintal (linked to a basic recovery of 10.25%) and for the sugar season 2024-25 to Rs.340 per quintal

b) State Advised Price (SAP) of sugarcane for sugar season 2023-24 for Bihar was revised by Rs.20 i.e from Rs.335 to Rs.355 per quintal

c) Minimum Selling Price of sugar was Rs.31 per kg since February 2019. However the prevailing selling price is higher than MSP

d) Stock holding limits on mills regulates sugar supply, in domestic market which in turn provides stability to prices.

e) Ethanol production from B heavy molasses and sugarcane syrup/juice discontinued as per Government notification w.e.f 07/12/2023

f) Higher customs duty on sugar imports. Export of sugar continues to attract zero custom duty. Currently export has been put under restrictive list.

g) A lower GST of 5% on ethanol

Export of Tea

Indian Tea export during the year 2023 went down to 220 million kg from 231 million kg in 2022 due to geopolitical problems like the ongoing Ukraine-Russia and Isreal-Palestine wars. Shipments also yielded less revenue as tea prices fell following a glut in the global market with a rise of production in Kenya and other Countries. Your Company increased its export by entering new markets which are opening up for good quality teas and exported tea worth Rs.83.05 crore as against Rs.77.87 crore last year.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The application for demerger of Sholayar Tea Estate with Bidhannagar Tea Co. Pvt Ltd is awaiting NOC from Stock Exchanges. Birla Holdings Ltd, UAE the off-shore investment arm of the Company, maintains status quo. The Financial Statements of these subsidiaries are kept for inspection at the registered office of the company and those of respective subsidiary companies. Any member interested to obtain copy of the same may write to the Company separately. These documents shall be made available either in physical form or electronic mode as per Green Initiative of the MCA. Pursuant to section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiary Companies is given in Form AOC-1 and forms an integral part of the Annual Report.

Birla Holdings Limited (BHL) is a wholly owned subsidiary of the company in Dubai (UAE).Kijura Tea Company Limited, Uganda is wholly owned subsidiary of BHL. Bondo Tea Estates Limited, Uganda is a step down subsidiary of BHL. Kijura Tea Estate owned by these companies manufactured 20.31 lakh kg. of tea compared to 20.74 lakh kg. last year. The average sale price realized was USD 0.78 per kg. against USD 1.18 per kg. last year. The Company reduced its cost from USD 1.15 per Kg to 0.89 Cent per Kg. During the year the company recorded a loss of USD 308 thousand (INR 257 lakh) on sales turnover of USD 2.40 million (INR 1961 lakh) as against last year profit of USD 109 thousand (INR 90 lakh) on sales turnover of USD 2.45 million (INR 2000 lakh).

CORPORATE GOVERNANCE

As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on corporate Governance is enclosed as a part of this Annual Report. A certificate from the Auditors of the Company regarding compliance as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Report on Corporate Governance.

The declaration by the Chairperson & Managing Director stating that all the Board members and Senior Management personnel have affirmed their compliance with the Company's Code of Conduct for the year ended 31^st March 2024 is forming part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As a part of its initiative under the "Corporate Social Responsibility" (CSR) drive, the Company continues to carry out its activities in the areas of education, sports and preventive health care. These projects are in accordance with Section 135 of the Act and the Company's CSR policy.

The composition of the members of CSR Committee remains the same namely: Mrs. Jayashree Mohta, Chairperson & Managing Director alongwith Mr. H. V. Kanoria, and Mr. Vikash Kandoi as members.

CSR Policy is placed on the website of the company "www. jayshreetea.in". The Report on CSR activities as required under the Companies (CSR Policy) Rules, 2014 along with the brief outline and contents of the CSR policy are annexed and forms an integral part of this Report.

PROSPECTS

The outlook for tea appears positive. Going ahead, the company will focus on enhancing the production of tea with quality standard. The fertilizers and sugar business is going to be very promising, it will further improve market share in fertilisers; increase sugar production with massive cane development work; it will utilize full capacity of ethanol production. We are continuously moderating working capital outlay and emphasis on capital efficiency to enhance value in the hands of all those who own a stake in the Company's progress.

We are positive about the prospects of the Indian tea, sugar & fertilizer industry. We are focusing on branding and sale of tea in packets and online sales. The long term industry fundamentals remain unchanged, and tea & sugar will continue to be an important and essential commodity.

Your Company is a quality tea producer of India and is hopeful that with the increased focus on packet tea under new brand names and establishing contacts with old & new overseas customers will fetch better price realization in years to come.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors would like to inform members that the audited accounts containing the financial statements for the year 202324 are in conformity with the requirements of the provisions of Section 134(3)(c) read with Section 134(5) and all other applicable provision of the Companies Act, 2013 and they believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company's financial condition and results of operations. The Statutory Auditors, Singhi & Co., Chartered Accountants, Kolkata have audited these financial statements.

Based on the same, your Directors further confirm that according to their information:

i. in the preparation of the annual accounts, applicable accounting standards have been followed and there are no material departures;

ii. the accounting policies selected by directors are consistently followed and applied and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. the annual accounts have been prepared on a going concern basis.

v. that there is adequate proper internal financial controls with reference to the financial statement have been laid down for the company and such internal financial controls are adequate and were operating effectively.

vi. that proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

BUSINESS RESPONSIBILITY REPORT (BR)

In terms of SEBI (LODR) Regulations 2015, Top 1000 listed entities are required to submit as part of their Annual Reports, Business Responsibility Reports, describing the initiatives taken by them from an environmental, social and Governance perspective. Your company does not fall under this category. However, BR Report on environment, human resources and principle wise performance in short forms part of the Management discussion and analysis report.

PARTICULARS OF EMPLOYEES

The Information as required under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in the Annexure forming part of the Report.

PUBLIC DEPOSITS

The company has not accepted or renewed any deposit during the year.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans, Guarantees and investment covered under the provisions of Section 186 of the Companies Act, 2013 is given in the Standalone Financial Statement forming part of the Annual Report.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has a comprehensive internal control and mechanism, which is constantly assessed and strengthened with new/revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of operations.

Business risks and mitigation plans are reviewed on timely intervals and the internal audit processes include evaluation of all critical and high risk areas. Critical functions are rigorously reviewed and the reports are shared with the Management for timely corrective actions, if any. The main focus of internal audit is to review business risks, test and review controls, assess business processes besides benchmarking controls with best practices in the industry. During the year under review, there were no elements of risk which in the opinion of the Board of Directors threaten the existence of the Company. Risks do arise in the businesses of the Company which are mitigated in accordance with the Risk Management Framework and Policy.

The company's internal control systems are periodically tested and supplemented by extensive program of internal audit by independent firms of Chartered Accountants. Audits are finalized and conducted based on internal risk management. Significant findings are brought to the notice of the Audit Committee of the Board and corrective measures are recommended for implementation.

RISK MANAGEMENT

The company has laid down the procedures to inform to the Board about the risk assessment and minimization procedures, which shall be responsible for framing, implementing and monitoring the risk management plan of the company. Jay Shree Tea is committed to manage its risk in a proactive manner. Though risks cannot be completely eliminated, an effective risk management plan ensures that risks are reduced, avoided, retained or shared.

DISCLOSURE OF PARTICULARS WITH REGARD TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Necessary information on conservation of energy, technology absorption, foreign exchange earnings and outgo, required to be given pursuant to the provisions of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is presented in Annexure to this Report.

ENVIRONMENT AND SAFETY

The company is conscious of clean environment and safe operations. It ensures safety of all concerned, compliance with environmental regulations and preservation of natural resources.

As required by the Sexual Harassment of women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the company has an internal policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. During the year under review, no complaints were reported to the Board.

STATUTORY AUDITORS AND AUDITORS' REPORT

In the Annual General Meeting held on 2nd August,2022 Singhi & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company for a period of 5 years upto 31.03.2027 in terms of the provisions of the Companies Act, 2013 at a remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors from time to time. No ratification of their appointment is required as per notification dated May 7, 2018 issued by the Ministry of Corporate Affairs. The Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

The Auditors Report form part of this Annual report. The Report does not contain any qualifications.

COST AUDITORS

The Audit Committee in its meeting held on 23^rd May, 2024 has recommended the reappointment of D. Sabyasachi & Co., the Cost Auditor to conduct the cost audit of the company for the financial year 2024-25 in terms of section 148(3) of the Companies Act, 2013. Accordingly the Board appointed the said firm of Cost Accountants to carry out the cost audit for the year 2024-25 on the remuneration as recommended by the Board to be fixed by members in the ensuing Annual General Meeting of the Company.

INTERNAL AUDIT

The Company continued to engage reputed firms of Chartered Accountants as its internal auditors at its units and tea estates. Their scope of work and the plan for audit is approved by the Audit Committee. The report submitted by them is regularly reviewed and their findings are discussed with the process owners and suitable corrective action taken on an ongoing basis to improve efficiency in operations.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed MR & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the company. The report of the Secretarial Audit is annexed herewith. Regarding observations: The company had a pending case under Section 58(A) of the Companies Act, 1956 with the court relating to acceptance of a small amount during the period of approval of form by the Board and its filing with ROC and the matter is subjudice.

INSURANCE

Adequate insurance cover has been taken for properties of the company including buildings, plant and machineries and stocks against fire, earthquake and other risks as considered necessary.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review Mr. S.K. Tapuriah (DIN: 01065278), retired from the Board on 14^th August, 2023. Mr. Tapuriah, an ex-member of the Parliament has been associated with the Company since last 33 years. He has contributed his vast knowledge & wisdom to the Company from time to time.

As per the provisions of Section 152 of the Companies Act, 2013, Mrs. Jayashree Mohta (DIN:01034912) retires by rotation and being eligible offers herself for reappointment. The Board recommends her reappointment.

Based on the recommendation of the Nomination and Remuneration Committee Mr. Harsh Vardhan Kanoria (DIN:00060259), a well known industrialist of repute joined the Board on 11^th February, 2019 for a period of 5 years. The proposal relating to his re-appointment has been included in the Notice convening the AGM for the consideration of the Members, which the Board recommends.

The Board appointed Mrs. Jayashree Mohta as Chairperson and Managing Director with effect from 16^th September, 2020. Mrs. Mohta has attained the age of seventy years on 12^th May, 2021 and hence continuation of her employment as Chairperson and Managing Director requires the approval of members by a special resolution. She has been looking after day to day affairs of the Company and is guiding force behind its performance. Keeping in view the vast experience of Mrs. Mohta the Board as recommended by the Nomination and Remuneration Committee proposes continuation of her employment as Chairperson and Managing Director of the Company.

A brief profile of Directors proposed as above has been provided in the Notice convening the AGM.

The Independent Directors have submitted the declaration of independence as required under Section 149 of the Companies Act, 2013 and the Board is of the opinion that they are independent within the meaning of the said requirement of the Act.

There is no change in the Key Managerial Personnel during the year.

OTHER DISCLOSURES EXTRACT OF ANNUAL RETURN

The details for the financial year ended 31^st March, 2024 has been provided in our website at www.jayshreetea.in.

NUMBER OF BOARD MEETINGS

The Board of Directors met five times during the year ended 31st March, 2024. The details of the Board meetings and the attendance of Directors are provided in the Corporate Governance Report.

COMPOSITION OF COMMITTEE OF DIRECTORS

The Board has constituted the following Committees of Directors:

(a) Audit Committee,

(b) Nomination & Remuneration Committee,

(c) Stakeholder relationship Committee

The detailed composition of the above Committees along with number of meetings and attendance at the meetings are given in Corporate Governance Report.

(d) Corporate Social Responsibility Committee

The detailed composition of the above Committee is given under the head Corporate Social Responsibility (CSR).

ANNUAL GENERAL MEETING

Annual General Meeting of the Company is scheduled to be held on 9th August, 2024

WHISTLE BLOWER POLICY

The company has formulated Whistle Blower Policy in terms of Section 177(9) of the Companies Act, 2013 the details of which is being provided in the Corporate Governance Report. The Whistle Blower Policy has also been posted on the website of the Company.

RELATED PARTY TRANSACTIONS

All the related party transactions for the year under review are entered on arm's length basis and are in compliance with the Companies Act, 2013 and the Listing Regulations. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc, which may have potential conflict with the interest of the Company at large. All related party transactions are presented to the Audit Committee and the Board for its approval.

The related party transactions policy as approved by the Board is uploaded on the Company's website "www.jayshreetea.in".

The details of the transactions with related party is given in the Standalone Financial Statement forming part of the Annual Report.

EVALUATION OF BOARD'S PERFORMANCE

In compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 , the performance evaluation of the Board was carried out during the year under review. The Board of Directors expressed their satisfaction with the evaluation process. More details on the same is given in the Corporate Governance Report.

APPRECIATION

The Board wishes to place on record its appreciation of the efforts put in by your company's workers, staff and executives.