Dhyaani Tradeventtures Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMY OVERVIEW:

The global economy continues to recover slowly from the blows of the pandemic, Russias invasion of Ukraine, and the cost-of-living crisis. In retrospect, the resilience has been remarkable. Despite the disruption in energy and food markets caused by the war, and the unprecedented tightening of global monetary conditions to combat decades-high inflation, the global economy has slowed, but not stalled. Yet growth remains slow and uneven, with growing global divergences. The global economy is limping along, not sprinting.

Global activity bottomed out at the end of last year while inflation both headline and underlying (core) is gradually being brought under control. But a full recovery toward pre-pandemic trends appears increasingly out of reach, especially in emerging market and developing economies. According to our latest projections, global growth will slow from 3.5 percent in 2022 to 3 percent this year and 2.9 percent next year, a 0.1 percentage point downgrade for 2024 from our July projections. This remains well below the historical average. Headline inflation continues to decelerate, from 9.2 percent in 2022, on a year-over-year basis, to 5.9 percent this year and 4.8 percent in 2024. Core inflation, excluding food and energy prices, is also projected to decline, albeit more gradually than headline inflation, to 4.5 percent in 2024.

As a result, projections are increasingly consistent with a "soft landing" scenario, bringing inflation down without a major downturn in activity, especially in the United States, where the forecast increase in unemployment is very modest, from 3.6 to 3.9 percent by 2025. But important divergences are appearing. The slowdown is more pronounced in advanced economies than in emerging market and developing ones. Within advanced economies, the US surprised on the upside, with resilient consumption and investment, while euro area activity was revised downward. Many emerging market economies proved quite resilient and surprised on the upside, with the notable exception of China, facing growing headwinds from its real estate crisis and weakening confidence.

Three global forces are at play. First, the recovery in services is almost complete. Over the past year, strong demand for services supported service-oriented economies including important tourism destinations such as France and Spain relative to manufacturing powerhouses such as China and Germany. High demand for labour-intensive services also translated into tighter labour markets, and higher and more persistent services inflation. But services activity is now weakening alongside a persistent manufacturing slowdown, suggesting services inflation will decrease in 2024 and labour markets and activity will soften.

Second, part of the slowdown is the result of the tighter monetary policy necessary to bring inflation down. This is starting to bite, but the transmission is uneven across countries. Tighter credit conditions are weighing on housing markets, investment, and activity, more so in countries with a higher share of adjustable-rate mortgages or where households are less willing, or able, to dip into their savings. Firm bankruptcies have increased in the US and the euro area, although from historically low levels. Countries are also at different points in their hiking cycles: advanced economies (except Japan) are near the peak, while some emerging market economies, such as Brazil and Chile, have already started easing Third, inflation and activity are shaped by the incidence of last years commodity price shock. Economies heavily dependent on Russian energy imports experienced a steeper increase in energy prices and a sharper slowdown. Some of our recent work shows that the pass through from higher energy prices played a large role in driving core inflation upward in the euro area, unlike in the United States, where core inflation pressures reflect instead a tight labor market. Despite signs of softening, labor markets in advanced economies remain buoyant, with historically low unemployment rates helping to support activity. So far, there is scant evidence of a "wage-price spiral," and real wages remain below pre pandemic levels. Further, many countries experienced a sharp and welcome compression in the wage distribution. Some of this compression reflects the higher amenity value of flexible and remote work schedules for high earners, reducing wage pressures for that group.

(Source - https://www.imf.org/en/Publications/WEO/Issues/2023/10/10/world-economic-outlook-october-2023 - World Economic Outlook October 2023)

AGRICULTURAL SECTOR

India is one of the major players in the agriculture sector worldwide and it is the primary source of livelihood for ~55% of Indias population. India has the worlds largest cattle herd (buffaloes), the largest area planted for wheat, rice, and cotton, and is the largest producer of milk, pulses, and spices in the world. It is the second-largest producer of fruit, vegetables, tea, farmed fish, cotton, sugarcane, wheat, rice, cotton, and sugar. The agriculture sector in India holds the record for second-largest agricultural land in the world generating employment for about half of the countrys population. Thus, farmers become an integral part of the sector to provide us with a means of sustenance. Consumer spending in India will return to growth in 2021 post the pandemic-led contraction, expanding by as much as 6.6%. The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year due to its immense potential for value addition, particularly within the food processing industry. The Indian food processing industry accounts for 32% of the countrys total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.

Food grain production in India touched 330.5 million metric tonnes (MT) in 2022-23 (3rd Advance Estimate). India is the worlds 2nd largest producer of food grains, fruits and vegetables and the 2nd largest exporter of sugar. A total of 521.27 LMT rice has been anticipated for procurement for the upcoming KMS 2023-24, up from 496 LMT produced during the previous KMS 2022-23.

The Agriculture and Allied industry sector witnessed some major developments, investments, and support from the Government in the recent past. Between April 2000-March 2024, FDI in agriculture services stood at US$ 3.08 billion.

According to the Department for Promotion of Industry and Internal Trade (DPIIT), the Indian food processing industry has cumulatively attracted a Foreign Direct Investment (FDI) equity inflow of about US$ 12.58 billion between April 2000-March 2024. This accounts for 1.85% of total FDI inflows received across industries.

OPPORTUNITIES AND THREATS

Several challenges are being faced by the agricultural sector in India.

? The sector is plagued by the problem of low productivity due to outdated farming techniques, lack of proper irrigation facilities, and inadequate use of fertilizers and pesticides that led to lower yields and lower profits for farmers. ? The agriculture sector is vulnerable to the impact of climate change, which has resulted in erratic weather patterns, prolonged droughts, and floods, affecting the production and availability of crops and leading to higher prices for consumers. ? A lack of infrastructure in rural areas, including poor roads, inadequate storage facilities, and limited access to credit have made it difficult for farmers to transport their produce to markets and resulted in a lack of investment in the sector. ? A lack of awareness among farmers about the use of modern technology and best practices in the field has limited their ability to adopt new farming techniques and improve their yields. ? The agriculture sector in India is dominated by small and marginal farmers with limited access to inputs and resources, making it difficult for them to compete with larger players in the market.

India is an agrarian economy with a vast potential for agricultural development. Several opportunities can be leveraged to promote sustainable and inclusive growth in the agricultural sector.

? Indias large and growing population creates a massive demand for food and agri products. This demand can be met by increasing agricultural productivity and improving the supply chain. ? India has a diverse range of agro-climatic zones, which makes it possible to cultivate a variety of crops, giving ample opportunities for an increase in the income of farmers through diversification. ? A growing trend toward organic farming and sustainable agriculture has a vast potential to make India a global leader in organic farming and tap into the growing demand for organic products worldwide. ? An additional income for farmers through agro-forestry and agro-tourism, a booming sector, if capitalized, will promote sustainable land use practices. ? The Government of India has launched several initiatives to promote agricultural development, such as the Pradhan Mantri Fasal Bima Yojana, Pradhan Mantri Krishi Sinchai Yojana, and the e-NAM (National Agriculture Market) initiative. These initiatives offer farmers with opportunities to access insurance, irrigation facilities, and market information to enhance their productivity and income.

FUTURE OUTLOOK

1. Enhancing our customer base

Our Company is customer satisfaction oriented company and strives to maintain good relationship with the customers. We continuously strive to increase the sales in the existing states and customers. However we aim at widening our distribution network so as to enhance our geographical presence and consequently our customer base. We also aim to take the maximum advantage of the location of the company by reaching to the un-explored or less explored sea faced areas of the country which has direct connectivity to the current location of the company. We have started exploring international markets by undertaking export assignments.

2. Improving functional efficiencies

Our company intends to improve efficiencies to achieve cost reductions and have a competitive edge over our peers. We believe that this can be achieved through continuous process improvement, customer service and technology development.

3. To increase brand visibility

The market for our products is highly competitive on account of both the organized and unorganized players. Our market goodwill is significantly dependent on brand recall and our ability to compete effectively would significantly depend on our ability to promote and develop our brand. We propose to increase the number of channel partners/dealers in order to broaden our reach. We believe greater visibility of our brand would ensure brand retention in the minds of the customers and would in effect further enhance our reach.

RISKS AND CONCERNS

The risk associated with the products of the Company is always a cause of concern for the Company. The general risk associated with the competition from large organization as well as from the unorganized and small-scale organizations affects the domestic market to a large extent. Your company is confident of performing better in spite of such business risks.

INTERNAL CONTROL SYSTEMS

The Company does not have any formal internal audit system. The internal policies of the Company ensure efficient use and protection of assets and resources, compliance with policies and reliability of the financial and operational reports. The management is taking steps to introduce the internal audit system commensurate with the size and nature of the business of the company. The Audit Committee of the Board of Directors deals with the adequacy of internal controls and budgeting functions.

FINANCIAL PERFOMANCE

During the year under review, the company has achieved revenue from operations of Rs. 29,66,86,000/- and earned profit amounting to Rs.68,64,000/-as compared to the previous Financial Year 2022-2023 where the Revenue from Operations was Rs. 92,25,300/- and incurred Loss of Rs. 1,90,14,100/-. The Basic and Diluted Earnings per share of the company as on 31^st March, 2024 stands at 1.61/-.

HUMAN RESOURCES

The Company continued to have cordial and harmonious relations with its employees during the year under review.

FOREIGN CURRENCY RISKS

Volatility in global economies have become the new common in recent times and since company has less exposure to foreign revenue, risk is low in our case. However, the company has a defined policy for managing its foreign exchange exposure minimizing the currency risk which results in stable earnings.

FINANCIAL RATIOS

Sr. No.	Particulars	FY 2023-24	FY 2022-23
1	Debtors Turnover Ratio	0.98	0.45
2	Inventory Turnover Ratio	134.60	0.92
3	Interest Coverage Ratio	6.58	NA
4	Current Ratio	1.05	1.08
5	Debt Equity Ratio	0.61	0.02

Return on Net Worth

Financial Year	FY 2023-24	FY 2022-23
Return on net worth

CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis report describing the Companys objective, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

Important factors that could make a difference to the Companys operations include economic conditions affecting demand / supply and price conditions in the domestic and overseas markets, changes.