Diana Tea Company Limited , a prominent player in the Indian tea industry, has recently found itself in the spotlight due to a penalty order from the Income Tax Department. The company has taken action in response to this development, addressing the regulatory matter.

Penalty Details and Company Response

The Income Tax Department has levied a penalty of Rs 5,18,960 on Diana Tea Company under Section 270A of the Income Tax Act, 1961 for the Assessment Year 2023-24. The company received this order on September 19, 2023, and has since filed an appeal against the National Faceless Assessment Centre on October 21, 2023.

Financial Impact and Company Stance

Diana Tea Company has stated that this penalty order does not have any material impact on its financials, operations, or other activities for the current financial year. The company's approach in filing an appeal underscores its position and commitment to resolving the matter through proper channels.

Disclosure Delay Explanation

The company acknowledged a delay in disclosing this information, citing an unusual circumstance where the email notification regarding the tax litigation and penalty was received in their spam folder. Additionally, they mentioned not receiving any hard copy of the order. The company also noted that the Diwali celebration period contributed to the slight delay in their response, which was submitted on October 21st.

Ongoing Proceedings

As of now, the appeal filed by Diana Tea Company against the penalty order is under process. No settlement has been reached, and the company continues to evaluate its next steps in this matter.

This development highlights the importance of robust internal communication systems and vigilant monitoring of regulatory correspondence for listed companies. It also underscores the complex nature of tax assessments and the avenues available for companies to address such issues within the legal framework.

Diana Tea Company Limited, a prominent player in the Indian tea industry, has reported a net loss of ₹458.44 lakhs for the financial year ended March 31, 2025, compared to a profit of ₹23.96 lakhs in the previous year. The company's financial performance was significantly impacted by adverse weather conditions and market challenges.

Revenue and Production Decline

The company's revenue from operations decreased to ₹7,082.45 lakhs in FY2025 from ₹7,305.15 lakhs in FY2024. Tea production saw a notable decline, with the company producing 27,99,612 kgs of tea against 31,13,239 kgs in the previous year. This reduction was primarily attributed to major pest attacks and fungal activity affecting north India tea production.

Market Challenges

Diana Tea Company faced additional pressure from market conditions. The tea market, which remained buoyant until mid-September, experienced a sharp fall due to excessive imports of tea from Nepal and Kenya. This eroded gains in average realization, resulting in an average price of ₹236.41 per kg compared to ₹233.50 in the previous year.

Financial Highlights

All figures in lakhs

Operational Challenges

The company's Managing Director, Mr. Sandeep Singhania, attributed the loss to several factors:

1. Major pest attacks and fungal activity in north India
2. Absence of certain effective chemicals for pest control
3. Early closure of operations on November 30
4. Sharp fall in tea market prices due to excessive imports

Future Outlook

Despite the challenging year, the company remains cautiously optimistic about the future. The current year has started on a better note for crop production, with Indian tea production higher by 67 million kgs till May. However, the company acknowledges that excess availability may put pressure on overall market sentiments.

Diana Tea Company is taking precautionary measures to navigate through this turbulent phase faced by the industry. The management is focusing on continuous developmental work in fields and factories to improve crop quality and optimize costs.

Corporate Governance

The company has announced changes to its Board of Directors:

• Mr. Devang Singhania was appointed as a Whole-Time Director effective November 11, 2024.
• Mr. Ravindra Suchanti and Mr. Navin Nayar were appointed as Independent Directors, subject to shareholder approval at the upcoming Annual General Meeting.

In conclusion, while Diana Tea Company Limited faced significant challenges in FY2025, the management remains committed to improving operational efficiency and navigating market uncertainties in the coming year.