flex foods ltd share price Management discussions


Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.


At the beginning of the year 2023, the outlook for the world economy was clouded by aggressive monetary policy tightening, deteriorating financial conditions and declining confidence. Global trade growth slowed in the second half of 2022, mirroring the slowdown in industrial production and economic activity across advanced economies. Economic activity also deteriorated significantly in China, to its slowest pace since the mid-1970s, due to COVID-19 related restrictions, droughts, and ongoing property sector stress. The global outlook had deteriorated markedly throughout 2022 amid high inflation, aggressive monetary tightening, and uncertainties from both the war in Ukraine and the lingering pandemic. Soaring food and energy prices has eroded real incomes, triggering a global cost-of-living crisis, particularly for the most vulnerable groups. Growth in the worlds three largest economies?the United States, China, and the European Union?has weakened, with significant impact on other countries. At the same time, rising government borrowing costs and large capital outflows has exacerbated fiscal and balance of payments pressures in many developing countries. Spurred by pent-up demand, lingering supply disruptions, and commodity price spikes, inflation reached multi decade highs last year in many economies, leading central banks to tighten aggressively to bring it back toward their targets and keep inflation expectations anchored. Further, the unexpected failures of two specialized regional banks in the United States in mid-March 2023 and the collapse of confidence in Credit Suisse?a globally bank?have roiled financial markets, with bank depositors and investors re-evaluating the safety of their holdings and shifting away from institutions and investments perceived as vulnerable. This banking crisis hits world economy already disrupted by pandemic, war, sanctions, geopolitical tensions, and climate shocks. The current global economic slowdown cuts across both developed and developing countries. Growth momentum has weakened in the United States, the European Union, and other developed economies, adversely affecting the rest of the world economy.

The recovery of global economy is hindered by various factors, such as high energy prices, trade disruptions, and volatility. However, it appears poised for a gradual recovery from the powerful blows of the pandemic and of Russia-Ukraine conflict. China is rebounding strongly following the reopening of its economy. Supply-chain disruptions are unwinding, while the dislocations to energy and food markets caused by the war are receding. Simultaneously, the massive and synchronous tightening of monetary Policy by most central banks should start to bear fruit, with inflation moving back toward its targets. However, the International Monitory Fund (IMF) has projected that global growth will bottom out at 2.8 percent in 2023 before rising modestly to 3.0 percent in 2024. Global inflation will decrease, although more slowly than initially anticipated, from 8.7 percent in 2022 to 7.0 percent in 2023 and 4.9 percent in 2024. Moreover, with global growth over the coming years not expected to overshoot pre-2022 shock forecasts, the level of global output is unlikely to recover to its previous path (Source: https://www.imf.org/).

While significant challenges remain in the global environment, India was one of the fastest growing economies in the world with real GDP growing 7.7 percent year-on-year during Q1- Q3 fiscal year 2022/23 (April-March, FY22/23). Growth was strengthened by robust domestic demand - strong investment activity bolstered by the governments capex push and buoyant private consumption, particularly among higher income earners. While the overall growth momentum remains robust and real GDP growth for FY22/23 is estimated to be 6.9 percent, there were signs of moderation in Q3 as growth slowed to 4.4 percent year-on-year (y-o-y). There was also a change in the composition of domestic demand in Q3 FY22/23 with a lower share from government consumption as fiscal consolidation efforts continued. Estimates suggest that the pandemic induced a spike in extreme poverty ($2.15), of up to 4 percentage points, moderated in FY21/22. Facilitated by widespread access to vaccines, extreme poverty rates are estimated to have declined to 13.8 percent in FY21/22, although not as low as pre-pandemic levels. Continued poverty reduction in FY22/23 will depend on how the economic rebound translates into productive jobs for the bottom half of the population and the welfare implications of fiscal consolidation efforts (Source: https://worldbank.org/).

World Bank Report indicates that Indias economy has been relatively resilient to challenging external conditions, real GDP growth is likely to moderate to 6.3 percent in FY23/24 from the estimated 6.9 percent in FY22-23. Domestic demand is likely to remain robust despite an expected tempering of consumption growth. Consumption is expected to be constrained by rising borrowing costs, slower income growth and continued fiscal consolidation. Investment activity is expected to be supported by the governments sustained capex-push and improved corporate and banking sector balance sheets due to healthy corporate profits and a reduction in non-performing loans (NPLs), respectively. Moderating consumption growth, easing global commodity prices and the lagged effect of monetary policy tightening is expected to bring headline inflation within the RBIs target range despite core inflation remaining elevated. On the external front, the negative contribution of net exports will be smaller due to the strong performance of service exports and a gradual decline in the import bill. The narrowing trade deficit will contribute to the current account deficit reducing to 2.1 percent from around 3 percent in FY 22-23. The general government deficit will likely consolidate by 0.7 percentage points to 8.7 percent in FY23-24 due to continued, albeit slower, revenue growth and lower current spending, reflecting the withdrawal of pandemic-related support programs. The lower projected fiscal deficit will stabilize the debt-to-GDP ratio at around 83 percent (Source: https://worldbank.ora/).

Industry Scenario and Development

The global processed food products industry is rapidly changing, with rising demographics, increased demand for branded and convenience food products and a growing consumer focus on organic food and clean label food products. Food processing ingredients are products derived from minimally processed food through refining, milling, pressing, or grinding processes. These products are not directly consumed but are used to prepare minimally processed foods.

The global food processing market is anticipated to reach USD 235.67 billion by 2028 (Source: https://www. verifiedmarketresearch.com/). Innovation in food processing machinery is one of the major factors anticipated to bolster the food processing market. Other factors include the surge in the adoption of automated technologies in the food processing industry and increasing R&D in food processing machinery. Some of the emerging trends that have a direct impact on the dynamics of the food processing industry include:

A global shift towards healthy eating and healthy alternatives

The markets drivers are a shift in consumer preferences toward healthier foods, population growth, improved cold chain logistics, and the adoption of automation systems and products. Players in the food processing ingredients market are poised to capitalise on this opportunity. Healthconscious consumers have reduced their consumption of sweeteners, carbohydrates, and high-fat foods. Another trend that is expected to grow is the use of new raw materials derived from marine sources which are used due to desirable oil and fiber content.

• Innovating process, products, and packaging

Novel processing techniques, products & packaging food processors are being developed & marketed in order to appeal to consumer demand. A most exciting new food processing trend is the use of high-pressure processing and it is gaining pace among food producers for more natural applications, such as ice cream and cookie dough. This is a low-temperature pasteurization technique. High-pressure processing has its own challenges, such as the equipment expense, and the need for packaging which can withstand high pressure. It also does not completely eradicate microbes and therefore products refrigeration as well which adds to additional costs. Despite challenges, it is witnessing wider adoption as High-pressure processing manufacturers & packaging suppliers innovate to enhance throughput and hence decrease processing costs. Another reason why food scientists are so excited about the future of food is the development of alternative proteins. The aim of alternative proteins is to make cell-based & plant-based products that possess the same/better taste & feel and cost the same or less than comparable animal proteins. While Plant-based foods have started replacing such animal products that include ice cream, meat, chicken & pet food, cell-based meat & seafood, such as burgers that have the taste with blend of animal protein.

In order to complement these spaces & create a more authentic eating experience there has been innovation in cell-based fats. These products leverage novel technologies, such as extrusion, which have been scaled up for commercial-scale manufacturing by engineers.

Increasing consumer preference for sustainable products

There is consumer pressure that continues to grow in the food industry in order to remove the food industrys high reliance often on single-use plastics, decrease waste & produce food in a sustainable way.

• Decreasing packaging waste

Since there is a science to food packaging, food businesses have to ensure food safety & satisfy consumers, but at the same time they should carefully balance product quality, appearance, functionality, price as well as environmental impact. Fueled by corporate responsibility as well as consumer demand, manufacturers are now taking a proactive approach to prioritizing sustainability in their packaging.

• Economic development in developing region is providing abundance growth to global market

Economic development is critical to increasing the number of distributors of specialty food ingredients in the developing regions. The key parameters that determine growth in processed food consumption in developing economies are disposable income and population purchasing power parity. GDP growth in emerging markets is expected to drive demand for value-added products and thus distribution. Consumer preferences for functional foods and processed foods are changing in these emerging markets, which are also available in modern retail formats such as supermarkets and hypermarkets.

The food processing sector in India encompasses manufacturing enterprises in all the segments from micro to large industries. India is having competitive advantage in terms of resource endowment, large domestic market and scope for promoting value added products. Indias food processing sector in recent years has been known for its high growth and high profits, thus, increasing its contribution to the world food trade every year. The food processing sector is the fifth-largest sector in terms of production, consumption, exports and there is growth potential. Indias food processing industry is primed for rapid expansion and will contribute significantly to the countrys economic prosperity. India ranks number one globally, in the production of pulses, pearl millet and cotton, and second in wheat, rice, groundnut, rapeseed & mustard and sugarcane. The country has emerged as the largest exporter of rice in the recent past. Such achievements became possible with the innovations in technologies including high-yielding varieties, irrigation, fertilizer, and farm policies (Source: www.icar.org.in).


Over the decade, India has achieved tremendous growth in terms of industrialization and globalization. Since India is a global agricultural powerhouse, agriculture with its allied sectors, is unquestionably the largest livelihood provider in India, especially in vast rural areas. It also contributes a significantly to the Gross Domestic Product (GDP). Sustainable agriculture, in terms of food security, rural employment, and environmentally sustainable technologies such as soil conservation, sustainable natural resource management and biodiversity protection, are essential for holistic rural development. Indian agriculture and allied activities have witnessed a green revolution, a white revolution, a yellow revolution and a blue revolution.

Indias food processing sector is a sunrise sector that has gained prominence in recent years. Major processed food products exported from India include processed fruits and juices, pulses, guar gum, groundnuts, milled products, cereals preparations, oil meals and alcoholic beverages. India created history in agriculture and processed food exports by exporting products worth US$ 25.6 billion in FY22. Export of APEDA (Agriculture and Processed Food Product Expoert Devevelopment Authority) products stood at US$ 7.4 billion as of April-June 2022, up 31% compared with US$ 5.7 billion over the same period last fiscal, according to the Directorate General of Commercial Intelligence and Statistics. Furthermore, exports of processed fruits and vegetables grew by 59.1%; cereals and miscellaneous processed items grew by 37.66%; meat, dairy and poultry products grew by 9.5%; basmati rice grew by 25.5%; non-basmati rice grew by 5%; and miscellaneous products grew by 50%. The Indian food processing industry is among the largest in the nation in terms of growth, production, consumption and exports (Source: https://aDeda.aov.in/).

The Company is engaged in the cultivation and processing of Culinary Herbs, Mushrooms, Fruits, and Vegetables for more than three decades. It is primarily involved in the cultivation and processing of Mushrooms, Herbs, Fruits and Vegetables in Freeze-Dried, Air-Dried and Individually Quick-Frozen (IQF) form. The Companys Air-dried products includes Oregano, Basil, Parsley, Thyme, Sage, Mint, Coriander- Cilantro, Dill, Marjoram, Savory, Chervil, Chives, Curry Leaves, Fennel, Lemon Grass, Rosemary, and Thai Basil. Further, Papaya, Strawberry, Mango, Banana, Pineapple, Sapota/Chikoo and Apple are the Frozen fruits products. Baby Corn, Mushrooms and Sweet Corn are also available in Canned form. The Companys Nutraceutical products includes White Musli, Wheat Grass, Stevia, Shitake Mushroom, Shallaki, Senna, Raw Papaya, Moringa, Holy Basil, Hibiscus, Reishi Mushroom, Ginger, Garlic, Giloy, Green Peppercorn, Chamomile, Bitter Gourd, Bahera and Asparagus/ Shatavari. The Company has manufacturing facilities in Dehradun, Uttarakhand, India. Further, the Company has set-up a manufacturing facility for Air Drying/ Freeze Drying of Vegetables, Fruits, Culinary Herbs and spices, at Krishnagiri in Tamil Nadu.

Mushroom Business

Surge in consumption of vegan diet across globe has become a key growth factor of mushroom market. High nutritional contents found in mushrooms have made their use popular in diet. The global mushroom market is witnessing a significant growth in the demand for mushrooms with each passing year. As per the “Mushroom Global Market Report 2023” by “The Business Research Company”, the global mushroom market size grew from $57.18 billion in 2022 to $62.44 billion in 2023 at a compound annual growth rate (CAGR) of 9.2%. The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries has led to economic sanctions on multiple countries, a surge in commodity prices, and supply chain disruptions, causing inflation across goods and services and affecting many markets across the globe. The mushroom market size is expected to grow to $90.88 billion in 2027 at a CAGR of 9.8% (Source: httDs://www.thebusinessresearchcompanv. com/).

The global Mushroom Market by geography has the dominant share in Asia Pacific. The consumption of mushroom in Asian countries such as Japan, India, and others is increasing at a significant pace attributed by increasing production along with the increased import of mushrooms in these countries. Utilization of advanced mushroom processing techniques by mushroom producers and distributors in Europe is set to contribute to the growth of the processed mushroom sales across the region. The Company has a strong international presence (the US and European markets) through established distribution channels and exports, primarily to Europe and the US.

• Fruits and Vegetables

Fruit and vegetable processing refers to a method of increasing shelf life and retaining the quality of fruits and vegetables for long-term preservation. When fruits and vegetables are processed, their shelf life is extended. India is the largest producer of Fruits and Vegetables and there is a huge opportunity in harnessing the potential of fruits and vegetables processing in the form of frozen (IQF), canned, pulp, puree, paste, sauces, snacks, dressings, flakes, dices, dehydration, pickles, juices, slices, chips, jams and jelly. The growth in the demand for convenience food products is driving the fruit and vegetable processing market. Convenience food is often referred to as tertiary processed food that is ready-to-eat processed foods. Convenient food includes fruits and vegetable which is prepared (usually by processing) in a manner that they can be consumed directly.

Herbs and Spices

The changing consumer preferences are driven by the increasing awareness of the health benefits of herbs and spices. The consumers are becoming more health conscious and are looking for healthy food options. The herbs and spices offer a wide range of health benefits such as reducing the risk of chronic diseases, boosting immunity, and improving digestion. The shift in consumer palates in favour of low-sugar foods products and rising interest in exotic flavours are driving herbs and spices sales. The Company is Indias leading freeze-dried herb, food, and vegetable maker. It has made its position as a pioneer in freeze-dried herb manufacture. The Company seek to bridge distribution gap with the best quality produce of freeze-dried herbs, fruits, and vegetables in the market. Freeze-dried herbs have a well-known shelf life. The food processing industry is booming with unique opportunities. Freeze-dried herbs are one particular niche of preserved foods with massive potential for value addition.


Sale of Finished Goods


Current Year

Previous Year

Quantity (In MTS) Value (Rupees in Lacs) Quantity (In MTS)

Processed Foods

2188 10172.09 Processed




990 1173.03 Other 990


3178 11345.12 Total 3178


The food processing industry across the globe is rapidly rising with changing demographics, increasing demand for branded and convenience food products, growing trend towards clean

label products and other factors. Processed food products include, range of minimally processed food products to complex food preparations to combine a wide array of food processing ingredients. Increasing demand for processed food products along with increasing consumers spending on-the go food products is the prime factor creating market growth of food processing ingredients in the near future. Food processing ingredients covers ingredient such as, emulsifiers, flavors, spices, enzymes, proteins, preservatives and others. Asia pacific is one of the fastest growing regions with increasing demand for packaged food products with India being one of the largest exporters. Changing lifestyle, increasing working women and increasing consumption ready to eat food products in urban areas is pushing the market for food processing products, ultimately the market for food processing ingredients.


India is one of the worlds largest food producers where processed food is merely 8% of the total produce. However, the countrys food processing market has immense potential in terms of production, consumption as well as export and import prospects. In comparison to other countries, Indian processed food industry has an advantage in terms of easy availability of manpower and raw materials, untapped market of over one billion populations, government initiatives in the form of loans, technical support, and tax holidays. The massive demand for Indian food products across the globe has opened a plethora of opportunities for Indian manufacturers resulting in the growth of the food processing industry.

Fortification of Foods:

Food fortification involves adding micronutrients such as vitamins and minerals to increase the nutritional value of food products. Currently, 46% of the vegetable oil produced by big players in the refined packaged oil industry in India is being fortified. Also, more than 36% of packed milk in India is fortified. Vitamin D fortified milk helps in reducing the incidence of rickets. Owing to the increasing consumption of protein and vitamin-enriched food products, the fortified food industry in India is growing at a rapid pace. To fight malnutrition in India, the government has launched several initiatives to boost the fortification of food products.

The Rise of Plant-Based Foods:

The plant-based food industry in India is growing at a tremendous pace as consumers are adopting a sustainable lifestyle. Vegetarians, flexitarians, meat consumers, and protein deficient consumers are considered as the target consumer group. Plant-based food sector mainly comprises plant-based meat and milk products.

The shift towards Chemical-Free Food Additives:

Due to the rising demand for natural food additives, food processing industries are shifting away from chemical-free additives and replacing them with natural food additives such as stevia, coconut sugar, black pepper oleoresin, gum arabic, carrageenan, etc. There are various segments of food additives such as preservatives, sweeteners, food colorants, antioxidants, emulsifiers, flavour enhancers, thickeners, etc. Natural food colorants are produced from parts of plants, algae, fungi, and mould. Natural sweeteners include thaumatin, glucose-fructose syrup, xylitol, neohesperidin DC, etc. Many food processing industries are using synthetic food additives as they are less expensive.

• The Surge in Demand for Immunity Boosting Food Products:

An increase in awareness among consumers about the health benefits of immunity-boosting foods is driving the market. According to product type, immunity-boosting products are broadly classified as foods, beverages, and dietary supplements. Immunity-boosting foods are further classified as instant foods and seeds while beverages are classified as juice, probiotic shots, etc. The outbreak of the COVID-19 pandemic has accelerated the growth of immunity-boosting foods. An increase in adulteration of foods has caused a lack of nutrition among consumers and has resulted in a surge in demand for immunityboosting foods.

• Challenges

The food processing industry transforms raw food grains, fruits, vegetables, or dairy products into merchandise that have a high shelf life. They have better taste and more nutritious values; for instance, products like jams, jellies, juices, etc. The food processing industry has excellent potential as it makes products that are used by all households regularly. This sector generates a lot of employment and helps reduce the problem of high food wastage. If the processed products have a unique taste and conform to high standards of hygiene, then they can provide huge profits. There are several challenges that the food processing industry has to face and overcome on an everyday basis.

Difficulties in living upto the Food Safety Standards:

Processed foods like juices, jams, and jellies must conform to high food safety standards. The fruits and vegetables used for processing undergo long periods of storage. Hence there is a high probability that they might begin to rot. Also, if the acidity levels of the jams and juices are not kept under tight check, they begin to harbor microorganisms. The growth of bacteria in canned food produces several life-threatening diseases like Botulism and Shigellosis. Hence, governments worldwide have set very high safety standards for these industries. Thus, food processing industries try their best to operate under sterile conditions. Minimizing the scope for human contact reduces the chances of bacterial growth. If clean automated machines are used for all processes, bacterial growth cases can be significantly reduced. Hence, these industries try to use automatic sealing machines for sealing containers, mechanical blades for cutting raw materials, etc.

• Limited availability of equipment:

Food processing industries need equipment like blades, valves, mixers, sorting machines, etc. Due to financial constraints, the appropriate equipment may sometimes be unavailable. In many of these industries, sorting and cleaning operations are done manually. Again, the workers might lack the technical know-how required to operate all the equipment/ machines. All this reduces the overall efficiency of the industry. For instance, valves are a must to control the movement of liquids and gasses while processing raw materials. Sometimes it is necessary to stop or open the flow of a substance totally, and sometimes it has to be done in a controlled manner.

Therefore, it is essential to have knowledge of operating equipment/ machines.

- Lack of economic sustainability:

Food processing industries frequently suffer from a lack of economic sustainability. Several factors reduce the profit margins of these industries, such as stiff competition, high food safety compliance burdens, etc.

The industry is vulnerable due to climatic and environmental factors, resource scarcity, and periodic governing regulatory changes. Other significant challenges include infrastructure, seasonal fluctuations in raw material availability, and a lack of knowledge resulting in technological barriers in developing regions. It is a major impediment to the growth of the market for food processing ingredients. Furthermore, an insufficient supply chain in developing economies is limiting the market growth. Further, the food processing industry has to deal with pests, government policies, and other challenges. However, there are examples of small-scale food processing units doing very well and creating a brand for themselves not only in the country of origin but also overseas Thus, using innovative ideas and dedicated efforts, all challenges can be dealt with effectively.


The food processing industry continues to experience significant growth and to handle that growth, organizations are spending more time evaluating existing conveyor systems, determining the need for new systems, and selecting the best system for their specific needs. Indias food processing sector, a shining pillar of the Indian economy, has been booming in recent years. Holding a place among the largest food processing industries in the world, it is responsible for a significant portion - about 32 per cent - of Indias overall food market. India, has emerged as the second largest producer of agricultural goods and an abundant source of fruits and vegetables. Its dairy, marine, poultry, and meat industries are thriving and leading the world in production. Additionally, the Indian gourmet food market is rapidly expanding at a rate of 20 per cent annually. Driven by the high-value processing of various agricultural products, increased urbanization, rising disposable incomes, the rise of nuclear families, and the demand for convenient food, Indias food processing industry is expected to grow at rapid pace. The COVID-19 pandemic has further boosted growth by shifting customer preferences towards branded packaged goods and promoting a healthier lifestyle. With the market becoming increasingly competitive, customers now have more options with the introduction of new products and market. This strong growth is expected to continue in the foreseeable future.

Further, with changing consumer needs, the governments focus on growth of food processing sector, developing infrastructure, and improvements in agriculture, Indias food processing ecosystem is at an inflection point, poised for exponential growth. Domestic players as well as international players have identified this potential and are gearing up for this paradigm shift which will see India move up the global rankings as one of the top food processing countries.


As the food processing industry attempts to recover from the aftermath of the pandemic, industry leaders are encouraged to identify, evaluate, and mitigate the risks in the market. Consumers changing preferences, supply chain disruptions, current economic conditions, and, most importantly, food

safety, are some of the risks of food processing. The management of risk is embedded in the corporate strategies of developing a portfolio of world-class businesses that best match organisational capability with opportunities in domestic and international markets, developing capabilities and competencies for the future in order to enhance competitiveness and win in the markets of tomorrow. The Company continues to focus on a system-based approach to business risk management and has been able to mitigate such risks by working upon strengthening its supply chain and increasing its customer base. The Company has in place sound corporate governance structure and practices in place aligned with the food processing industry. It also has thorough understanding of regulator expectations, business processes and challenges.


Recognising and tracking the Internal Control Systems is a critical part in an organization and the Company has a wellframed internal control system commensurate with the size and nature of its business. These internal controls ensure safeguarding of assets from unauthorised use or disposition, proper recording and reporting of all transactions and compliance with applicable regulatory requirements. The internal control systems are reviewed and modified continually to keep up with the changes in business environment and statutory requirements. The company has a secured system of internal controls which works together with internal financial controls that are repeatedly administered by the Management. The Internal Control System of the Company shows proficiency in operations; make the best use of resources and adhere with all applicable laws and regulations. The Companys internal auditors are responsible for providing assurance on compliance with operating systems, internal policies and legal requirements, as well as suggesting improvements to systems and processes. The Company has also identified and documented key internal financial controls for critical processes across plant, warehouses and offices wherein financial transactions are undertaken. The financial controls are evaluated for operating effectiveness through managements ongoing monitoring and review process, and independently by Internal Audit. Key controls are examined during the year and restorative and precautionary actions are taken for any fault. Internal audits are organized systematically by designated audit teams. Key internal audit findings are presented to the Audit Committee at its quarterly meetings. Most importantly, the senior management sets the tone at the top of no tolerance to non-compliance and promotes a culture of continuous innovation and improvement. The Audit Committee sanctions the risk based internal audit plan which also reviews worth and efficacy of the Companys internal financial controls.


The Companys conviction that human capital is the primary factor in driving strategic growth has been strengthened. The Company has developed a work culture that emphasises the creation of an organisation prepared for the future. The Company fosters a safe, inclusive and collaborative work environment for the overall growth and welfare of the employees. The HR policies of the Company are aimed at attracting, nurturing and retaining talented employees in a constantly evolving business environment while ensuring trust, transparency and teamwork amongst its employees. The Company continuously organises training programmes for its

employees in different areas viz. technical skills, behavioural skills, business excellence, general management, advanced management, leadership skills, customer orientation, safety, values and code of conduct enabling them to evolve with technological advancements. The Companys permanent employee strength stood at 478 as on 31st March, 2023. The Companys industrial relations continued to be harmonious during the year under review.


Maintaining safety of all stakeholder(s), be it internal or external, is a humongous task, especially in todays challenging times. The aim of the Company is to develop business while improving its environmental performance in order to create a more sustainable future. In order to achieve this, the Company continues to focus on measures for the conservation and optimal utilization of energy in all the areas of its operations.


The composition and growth of assets was as under:

Factories are encouraged to consistently improve operational efficiencies, minimize consumption of natural resources and reduce water usage, energy usage and carbon emissions while maximizing production volumes. The Company is committed to conducting its operations with due regard to the environment and providing a safe and healthy workplace for employees. The collective endeavour of the Companys employees, at all levels, is directed towards sustaining and continuously improving standards of environment, occupational health, and safety, in a bid to attain and exceed international benchmarks.


The accompanying financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and Generally Accepted Accounting Principles and Accounting Standards prevailing in India.

[Rs. in lacs]


March 31, 2023 March 31, 2022 Growth %

Land & Investment Property

1397.81 1397.81 -


8010.16 2582.50 210.17

Plant & Equipments

20700.96 11139.58 85.83

Electrical Fittings & Installations

1458.67 451.40 223.14

Office Equipments

412.80 130.96 215.21

ERP Software

32.49 32.49 -

Furniture & Fixtures

105.34 46.18 128.11


204.15 192.48 6.06

Right of use assets

233.35 - -


32555.73 15973.40

Less: Acc. Depreciation

9148.52 8178.95


4873.27 12364.03

Net Fixed Assets

28280.48 20158.48


The summary of operating performance for the year under review is given below:

(Rs.in lacs)


Year ended March 31, 2023

Year ended March 31, 2022

Amount % Amount %


Revenue from operations

11732.60 99.50 11188.16 99.71

Other income

58.33 0.50 32.41 0.29

Total Revenue

11790.93 100.00 11220.57 100.00


Raw Material Consumed

2912.77 24.70 2389.59 21.30

Purchase of Stock in Trade

231.30 1.96 244.88 2.18

(Increase)/Decrease in stock

(947.67) (8.04) 120.02 1.07



Year ended March 31, 2023

Year ended March 31, 2022

Amount % Amount %

Change in Inventory of Biological Assets

2.90 0.03 (6.52) (0.06)

Gain in Change in fair value of Biological Assets

(3.08) (0.03) (2.66) (0.02)

Manufacturing Exp.

4009.18 34.00 2879.69 25.66

Payment & Benefit to Emp.

2065.40 17.52 1697.53 15.13

Administrative, Selling & Other Expenses

2349.31 19.93 1897.08 16.91


10620.11 90.07 9219.61 82.17


1170.82 9.93 2000.96 17.83


During the year the significant changes in the financial ratios of the Company, which are more than 25% as compared to the previous year are summarized below:

Financial Ratio





Change Reason for change

Debt Equity Ratio

2.31 1.31 76.3%

The significant change in these ratios is due to the additional borrowings raised by the Company during the year for its Expansion Project at Krishnagiri, Tamil Nadu. The operation of this plant has partially commenced from 26th September, 2022. The plant will fully commence in FY 2023-24.

Debt Service Coverage Ratio

0.66 10.68 -93.80%

Return on Equity

-9.8 8.3 -218.40%

Change is due to increase in expenses in the current year due to partially capitalization of Tamil Nadu plant.

Inventory Turnover Ratio

0.77 1.36 -43.40%

Change is due to increase in Closing Stock which is due to Low sale volumes in comparison to estimations because of the recession in both USA and Europe market as company has major part of its sales from export.

Trade Payables Turnover Ratio

2.18 3.04 -28.30%

Net-Profit Ratio

-9.34% 8.39% -211.4%

Change is due to increase in expenses in the current year due to partially capitalization of Tamil Nadu plant.

Return on Capital Employes

-2.49% 4.79% -151.90%

a. The significant change in these ratios is due to the additional borrowings raised by the Company during the year for its Expansion Project at Krishnagiri, Tamil Nadu. The operation of this plant has partially commenced from 26th September, 2022. The plant will fully commence in FY 2023-24.

b. Change is due to increase in expenses in the current year due to partially capitalization of Tamil Nadu plant.



We have conducted the review of the compliance of the applicable statutory provisions and the adherence to good corporate practices by FLEX FOODS LIMITED (‘the listed entity), having its Registered Office at Lal Tappar Industrial Area, P.O. - Resham Majri, Haridwar Road, Dehradun (Uttarakhand, Secretarial Review was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and to provide our observations thereon.

Based on our verification of the listed entitys books, papers, minutes books, forms and returns filed and other records maintained by the listed entity and also the information provided by the listed entity, its officers, agents and authorized representatives during the conduct of Secretarial Review, we hereby report that in our opinion, the listed entity has, during the review period covering the financial year ended on March 31,2023, complied with the statutory provisions listed hereunder and also that the listed entity has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I, Mahesh Kumar Gupta, have examined:

a) all the documents and records were made available to me and explanation provided by FLEX FOODS LIMITED (the “Listed Entity”),

b) the filings/ submissions made by the listed entity to the stock exchanges,

c) website of the listed entity,

d) any other document/ filing, as may be relevant, which has been relied upon to make this certification,for the year ended 31st March, 2023 (“Review Period”) in respect of compliance with the provisions of:

(a) the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Regulations, circulars, guidelines issued thereunder; and

(b) the Securities Contracts (Regulations) Act, 1956 (“SCRA”), rules made thereunder and the Regulations, circulars, guidelines issued thereunder by the Securities and Exchange Board of India (“SEBI”);

The specific Regulations, whose provisions and the circulars/ guidelines issued thereunder, have been examined include:-

a) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

b) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 - Not applicable as the Company did not issue any securities during the year under review.

c) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

d) Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 - Not applicable as the Company has not bought back any of its securities during the year under review.

e) Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021;- Not applicable as the Company has not granted any Options to its employees during the year under review.

f) Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 - Not applicable as the Company has not issued any Non-Convertible Securities during the year under review.

g) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

And circulars/ guidelines issued thereunder;

And based on the above examination, I/We hereby report that, during the Review Period:

I (a) (**) The listed entity has complied with the provisions of the above Regulations and circulars/ guidelines issued thereunder, except in respect of matters specified below: NIL

Sr. Compliance No. Requirement (Regulations/ circulars/ guidelines including specific clause)




Deviations Action Taken by Type of Action Details of Violation Fine


Observations/ Remarks of the Practicing Company Secretary Management


Advisory/ Clarification/ Fine/Show Cause Notice/ Warning, etc.

(b) The listed entity has taken the following actions to comply with the observations made in previous reports:NIL














Deviations Action Taken by Type of Action Details of Violation Fine


Observations/ Remarks of the Practicing Company Secretary Management


Advisory/ Clarification/ Fine/Show Cause Notice/ Warning, etc.

II. Compliances related to resignation of statutory auditors from listed entities and their material subsidiaries as per SEBI Circular CIR/CFD/CMD1/114/2019 dated 18th October, 2019:

Sr. Particulars No.

Compliance Status (Yes/ No/ NA) Observations/ Remarks by PCS*

1. Compliances with the following conditions while appointing/re-appointing an auditor

i. If the auditor has resigned within 45 days from the end of a quarter of a financial year, the auditor before such resignation, has issued the limited review/ audit report for such quarter; or


ii. If the auditor has resigned after 45 days from the end of a quarter of a financial year, the auditor before such resignation, has issued the limited review/ audit report for such quarter as well as the next quarter; or

--NA-- There is no resignation of Auditor.

iii. If the auditor has signed the limited review/ audit report for the first three quarters of a financial year, the auditor before such resignation, has issued the limited review/ audit report for the last quarter of such financial year as well as the audit report for such financial year.


2. Other conditions relating to resignation of statutory auditor

i. Reporting of concerns by Auditor with respect to the listed entity/its material subsidiary to the Audit Committee:

--NA-- There is no resignation of Statutory Auditor.

a. In case of any concern with the management of the listed entity/ material subsidiary such as non-availability of information / non- cooperation by the management which has hampered the audit process, the auditor has approached the Chairman of the Audit Committee of the listed entity and the Audit Committee shall receive such concern directly and immediately without specifically waiting for the quarterly Audit Committee meetings.

b. In case the auditor proposes to resign, all concerns with respect to the proposed resignation, along with relevant documents has been brought to the notice of the Audit Committee. In cases where the proposed resignation is due to non-receipt of information / explanation from the company, the auditor has informed the Audit Committee the details of information/ explanation sought and not provided by the management, as applicable.

--NA-- There is no resignation of Statutory Auditor.

c. The Audit Committee / Board of Directors, as the case may be, deliberated on the matter on receipt of such information from the auditor relating to the proposal to resign as mentioned above and communicate its views to the management and the auditor.


ii. Disclaimer in case of non-receipt of information:

The auditor has provided an appropriate disclaimer in its audit report, which is in accordance with the Standards of Auditing as specified by ICAI / NFRA, in case where the listed entity/ its material subsidiary has not provided information as required by the auditor.


3. The listed entity / its material subsidiary has obtained information from the Auditor upon resignation, in the format as specified in Annexure- A in SEBI Circular CIR/ CFD/CMD1/114/2019 dated 18th October, 2019.

--NA-- There is no resignation of Auditor.

III. I, hereby report that, during the Review Period the compliance status of the listed entity is appended as below:

Sr. Particulars No.




Observations/ Remarks by PCS*

1. Secretarial Standards:

The compliances of the listed entity are in accordance with the applicable Secretarial Standards (SS) issued by the Institute of Company Secretaries India (ICSI),as notified by the Central Government under section 118(10) of the Companies Act, 2013 and mandatorily applicable.


2. Adoption and timely updation of the Policies:

• All applicable policies under SEBI Regulations are adopted with the approval of board of directors of the listed entities


• All the policies are in conformity with SEBI Regulations and have been reviewed & updated on time, as per the regulations/circulars/guidelines issued by SEBI


3. Maintenance and disclosures on Website:

• The Listed entity is maintaining a functional website


• Timely dissemination of the documents/ information under a separate section on the website


• Web-links provided in annual corporate governance reports under Regulation 27(2) are accurate and specific which re- directs to the relevant document(s)/section of the website


4. Disqualification of Director:

None of the Director(s) of the Company are disqualified under Section 164 of Companies Act, 2013as confirmed by the listed entity.


5. Details related to Subsidiaries of listed entities have been examined w.r.t.:

(a) Identification of material subsidiary companies

(b) Disclosure requirement of material as well as other subsidiaries

--N.A.? --N.A.? There is no Subsidiary.

6. Preservation of Documents:

The listed entity is preserving and maintaining records as prescribed under SEBI Regulations and disposal of records as per Policy of Preservation of Documents and Archival policy prescribed under SEBI LODR Regulations, 2015.


7. Performance Evaluation:

The listed entity has conducted performance evaluation of the Board, Independent Directors and the Committees during the financial year as prescribed in SEBI Regulations.


8. Related Party Transactions:

(a) The listed entity has obtained prior approval of Audit Committee for all related party transactions; or

--YES? There is no such transaction(s).

(b) The listed entity has provided detailed reasons along with confirmation whether the transactions were subsequently approved/ratified/rejected by the Audit Committee, in case no prior approval has been obtained.


Sr. Particulars No.




Observations/ Remarks by PCS*

9. Disclosure of events or information:

The listed entity has provided all the required disclosure(s) under Regulation 30 along with Schedule III of SEBI LODR Regulations, 2015 within the time limits prescribed thereunder.


10. Prohibition of Insider Trading:

The listed entity is in compliance with Regulation 3(5) & 3(6) SEBI (Prohibition of Insider Trading) Regulations, 2015.


11. Actions taken by SEBI or Stock Exchange(s), if any:

No action(s) has been taken against the listed entity/ its promoters/ directors/ subsidiaries either by SEBI or by Stock Exchanges (including under the Standard Operating Procedures issued by SEBI through various circulars) under SEBI Regulations and circulars/ guidelines issued thereunder except as provided paragraph herein


12. Additional Non-compliances, if any:

No additional non-compliance observed for any SEBI regulation/circular/ guidance note etc.


Assumptions & Limitation of scope and Review:

1. Compliance of the applicable laws and ensuring the authenticity of documents and information furnished, are the responsibilities of the management of the listed entity.

2. Our responsibility is to certify based upon our examination of relevant documents and information. This is neither an audit nor an expression of opinion.

3. We have not verified the correctness and appropriateness of financial Records and Books of Accounts of the listed entity.

4. This Report is solely for the intended purpose of compliance in terms of Regulation 24A (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is neither an assurance as to the future viability of the listed entity nor of the efficacy or effectiveness with which the management has conducted the affairs of the listed entity.

For Mahesh Gupta and Company Company Secretaries

Mahesh Kumar Gupta


FCS No.: 2870; C P No.: 1999

Place : Delhi

Peer review certificate no. 727/2020

Date: 26th May, 2023

UDIN NO.: F002870F000384207