Flex Foods Ltd Management Discussions

FORWARDLOOKING STATEMENTS

Forwardlooking 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 forwardlooking statements. The Company assumes no responsibility to publicly amend, modify or revise any forwardlooking statements, on the basis of any subsequent developments, information or events.

MACROECONOMIC OVERVIEW

After enduring a prolonged and unprecedented series of shocks, the global economy appeared to have stabilized, with steady yet underwhelming growth rates. Further, intensifying downside risks dominate the outlook, amid escalating trade tensions and financial market adjustments. Divergent and swiftly changing policy positions or deteriorating sentiment could lead to even tighter global financial conditions. Ratcheting up a trade war and heightened trade policy uncertainty may further hinder both shortterm and longterm growth prospects. Scaling back international cooperation could jeopardize progress toward a more resilient global economy.

GLOBAL ECONOMIC OUTLOOK

Following an unprecedented series of shocks in the preceding years, global growth was stable yet underwhelming through 2024 and was projected to remain so in January, 2025 World Economic Outlook (WEO) update. However, the landscape has changed as governments around the world reorder policy priorities. Since the release of the January 2025 WEO Update, a series of new tariff measures by the United States countermeasures by its trading partners have been announced and implemented, ending up in nearuniversal US tariffs on April 2, 2025 and bringing effective tariff rates to levels not seen in a century. This on its own is a major negative shock to growth. The unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook and, at the same time, makes it more difficult than usual to make assumptions that would constitute a basis for an internally consistent and timely set of projections. Further, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climaterelated natural disasters. Against this backdrop, emerging market and developing economies (EMDEs) which fuel 60 percent of global growth are set to enter the second quarter of the twentycentury with per capita incomes on a trajectory that implies substantially slower catchup toward advancedeconomy living standards than they previously experienced. Without course corrections, most lowincome countries are unlikely to graduate to middleincome status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address longterm theeffects growth and development. Global growth is set to slow further this year, amid the lagged financial andongoing effects conditions, and feeble global trade and investment. Downside risks to the outlook include an escalation of the recent conflict in the Middle East and associated commodity market disruptions, financial stress amid elevated debt and high borrowing costs, persistent inflation,weakerthanexpected activity in China, trade fragmentation, and climaterelated disasters. Against this backdrop, policy makers around the world face enormous challenges. Even though investment in emerging market and developing economies (EMDEs) is likely to remain subdued, lessons learned from episodes of investment growth acceleration over the past seven decades highlight the importance of macroeconomic and structural policy actions and their interaction with wellfunctioning institutions in boosting investment and thus longterm growth prospects. Commodityexporting EMDEs face a unique set of challenges amid fiscal policy procyclicality and volatility. This underscores the need for a properly designed fiscal framework that, combined with a strong institutional environment, can help build buffers during commodity price booms that can be drawn upon during subsequent slumps in prices. At the global level, cooperation needs to be strengthened to provide debt relief, facilitate trade integration, tackle climate change, and alleviate food insecurity. Further, the Global growth is expected to hold steady at 2.7 percent in 202526. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climaterelated natural disasters. (Source: https://www.worldbank.org/en/publication/globaleconomicprospects).

INDIAN ECONOMIC OVERVIEW

India has emerged as the fastestgrowing major economy in the world and is expected to be one of the top three economic powers in the world over the next 1015 years, backed by its robust democracy and strong partnerships. India is poised to lead the global economy once again, with the International Monetary Fund (IMF) projecting it to remain the fastest growing major economy over the next two years. According to the April 2025 edition of the IMFs World Economic Outlook, Indias economy is expected to grow by 6.2 per cent in 2025 and 6.3 per cent in 2026, maintaining a solid lead over global and regional peers. The April 2025 edition of the WEO shows a downward revision in the 2025 forecast compared to the January 2025 update, reflecting the impact of heightened global trade tensions and growing uncertainty. Despite this slight moderation, the overall outlook remains strong. This consistency signals not only the strength of Indias macroeconomic fundamentals but also its capacity to sustain momentum in a complex international environment. As the IMF reaffirms Indias economic resilience, the countrys role as a key driver of global growth continues to gain prominence. The IMF has also revised its growth estimates for other major global economies. Chinas GDP growth forecast for 2025 has been downgraded to 4.0 per cent, down from 4.6 per cent in the January 2025 edition of the World Economic Outlook. Similarly, the United States is expected to see a slowdown, with its growth revised downward by 90 basis points to 1.8 per cent. Despite these revisions, Indias robust growth trajectory continues to set it apart on the global stage.

Further, Indias economic outlook for 2025 and 2026 remains one of the brightest among major global economies, as highlighted by the IMF. Despite global uncertainties and downward revisions in growth forecasts for other large economies, India is set to maintain its leadership in global economic growth. Supported by strong fundamentals and strategic government initiatives, the country is wellpositioned to navigate the challenges ahead. With reforms in infrastructure, innovation, and financial inclusion, India continues to enhance its role as a key driver of global economic activity. The IMFs projections reaffirm Indias resilience, further solidifying importance in shaping the global economic future. (https:// www.imf.org/en/Publications/WEO/Issues/2025/04/22/worldeconomicoutlookapril2025)

INDUSTRY SCENARIO AND DEVELOPMENT

India is fast emerging as a central hub for global manufacturing. With its rapidly growing economy, vast labor force, and increasingly businessfriendly policies, the country is positioning itself to become one of the top manufacturing destinations in the world. Getting qualifiedand active employees and labor will be a challenge in the time to come and hence, automation is one area where companies need to invest. India has emerged as the fifthlargest manufacturing hub globally, commensurate with her GDP rank. The manufacturing sector has shown dynamism, sustaining an average annual growth rate of 6.8% p.a. over the past decades. However, as the services sector has grown at a slightly higher rate, the share of manufacturing in GDP has tended to stagnate around 1617% over this period. India has built a diversified industrial with the rising importance of technologyintensive sectors, although lowtechnology (laborintensive) sectors continue to remain important providers of jobs. (Source: India Industrial Development Report 202425 by INSTITUTE FOR STUDIES IN INDUSTRIAL DEVELOPMENT (ISID))

The food processing sector in India is characterized by its diverse structure, which includes various subsectors that cater to different consumer needs and preferences. This diversity not only enhances the sectors resilience but also reflects the countrys vast agricultural base. The Sector has undergone rapid transformation, driven by its vast agricultural base, rising domestic demand, and supportive government policies. India is poised to emerge as a global leader in the food processing sector, with an impressive growth trajectory. Agriculture sector forms the backbone of the Indias food processing industry, India being the largest producer of fruits, vegetables, millets, tea, and food grains as well as milk and livestock globally.

Food Processing Industry Trends

The food processing industry in India has witnessed rapid growth in the recent past, with the sector emerging as one of the most promising industries driving the economic growth of the country. The food processing sector in India is currently experiencing significant transformation, influencedby consumer preferences and advancements in technology. These trends not only highlight the sectors potential for growth but also its critical role in Indias broader economic framework.

The Rise of PlantBased Foods

One of the most significant trends in the food processing industry is the surge in the popularity of plantbased foods.

Consumers are increasingly turning towards vegetarian and vegan options for health, ethical, and environmental reasons. This shift has led to a proliferation of plantbased meat substitutes, dairy alternatives, and snacks that cater to this growing market.

Sustainable Packaging Solutions

Sustainability is no longer a buzzword but a critical aspect of the food processing industry. With increasing awareness about the environmental impact of plastic waste, food companies are adopting sustainable packaging solutions. Biodegradable, compostable, and recyclable packaging materials are becoming standard as companies strive to reduce their carbon footprint.

Advanced Food Preservation Techniques

Food preservation technology has advanced significantly, allowing food processing companies to extend the shelf life of products while maintaining quality and safety. Techniques such as highpressure processing (HPP), pulsed electric fields (PEF), and modified atmosphere packaging (MAP) are gaining traction.

The Role of Technology in Food Processing

Technology is revolutionizing the food processing industry, making it more Automation, artificial intelligence (AI), and the Internet of Things (IoT) are some of the technologies being integrated into food processing operations.

The Emergence of Alternative Proteins

As the global population grows and environmental concerns rise, there is an increasing need for sustainable protein sources. Alternative proteins, including insectbased proteins, labgrown meat, and algaebased proteins, are emerging as viable options to meet this demand.

Smart Food Production

The concept of smart food production involves using data analytics, automation, and advanced manufacturing techniques to optimize food production. This approach not only enhances consistency and safety.

Health and Wellness Focus

The health and wellness trend continues to dominate the food processing industry. Consumers are increasingly looking for foods that support a healthy lifestyle, such as lowsugar, lowfat, and nutrientdense options.

Local and Authentic Flavours

There is a growing appreciation for local and authentic flavours as consumers seek to connect with their cultural heritage and explore new culinary experiences. This trend has led to an increase in demand for regionspecific foods and traditional recipes.

The India food processing market size reached INR 30,498.0 Billion in 2024. Looking forward, IMARC Group expects the market to reach INR 65,244.8 Billion by 2033, exhibiting a growth rate (CAGR) of 8.38% during 20252033. Rapid urbanization, the rising consumer preference for processed foods, favorable government initiatives, ongoing technological advancements in food processing, and an evolving retail landscape promoting convenient RTE food products are among the key factors driving the market growth. (Source: https://www.imarcgroup.com/indianfoodprocessingmarket)

BUSINESS OVERVIEW

According to the Food Processing Market Report 2025 (Global Edition), the global food processing market is projected to grow from USD 170,254.2 million in 2024 to USD 273,391.04 million by 2031, registering a CAGR of 7.00% from 2024 to 2031. The food processing industry involves the transformation of raw agricultural products into consumable food items through various physical, chemical, and mechanical processes. This sector plays a crucial role in enhancing the shelf life, safety, and quality of food, thus meeting the demands of a growing global population.

The Company is thriving in the highly favorable business environment for the Indian food processing industry, capitalizing on the increasing demand for Culinary Herbs, Mushrooms, Fruits and Vegetables and catering its products to the Domestic and International markets mainly in Europe, USA, Canada & Australia. Among its product portfolio, the Company offers a wide range of Vacuum Freeze Dried, AirDried, Frozen and IQF (Individually Quick Frozen) product range of mushrooms, herbs, spices and fruits / vegetables, meeting strict quality & hygiene standards. Canned button mushroom in various shapes and sizes is also available as per the customer requirement. It has two manufacturing facility in Dehradun, Uttarakhand and Krishnagiri, Tamil Nadu for freeze drying, air drying, individually quickfrozen processing cater to the growing global demand for the large variety of mushroom, fruits & vegetables. The Company provides a wide range of products including:

Freeze Dried Products

Freezedried products are a widespread preservation alternative in modern industry to preserve their original texture, colour, flavour, aroma, nutrients and quick reconstitution (rehydration) in water. Today, there are numerous examples of freezedried products on the market: freezedried food, freezedried fruit, freezedried flower, etc. Among their many advantages are shelf life without compromising quality, and the ease of transport and storage by significantly reducing weight. As the demand for these lightweight, easytostore items grows, certain global markets have emerged as key players in the freezedried product industry. The global freezedried product market is thriving, with key players spread across different continents. The demand for these lightweight, nutrientdense options is driven by diverse factors, including lifestyle choices, health consciousness, and a growing interest in sustainable and convenient food solutions. As the Company continue to witness innovations in food technology of freezedried products and airdried herbs in India and changing consumer preferences, the freezedried market is poised for further expansion. Freezedried food products by the Company preserve flavor much better than regular dehydrating, leading to brighter, freshertasting flavors. The Company provide a range of products including freeze dried herbs, freeze dried fruits, freeze dried vegetables and freezedried mushrooms under this category. Companies are putting lot of stress on R&D and development of new fruits and vegetables under freeze drying to have the major central companies under their network. As per a Research Report by IMARC Group, the Indian freezedried food market size reached USD 109.00 Million in 2024 and expects the market to reach USD 314.63 Million by 2033, exhibiting a growth rate (CAGR) of 12.50% during 20252033. Rising consumer demand for convenient and longshelflife food, rapid urbanization, growing health awareness, expanding retail and ecommerce channels, advancements in freezedrying technology, rising disposable incomes, evolving dietary preferences, and the need for nutrient retention in packaged foods are driving the India freeze dried food market growth. (Source : https://www.imarcgroup.com/ indiafreezedriedfoodmarket).

Freeze Dried Products are ambient stable and can be handled with minimal modified storage conditions especially refrigeration or chilling. This helps in a reduced carbon footprint till its final usage.

The Company is exploring the possibility of launching ready to eat fruit snacks starting with mango, strawberry and banana in US market in retail packing which seems to have enormous growth potential.

Air Dried Products

One of the biggest drivers of market expansion is heightened consumer interest in minimally processed, additivefree food products. As more healthconscious consumers call for natural and nutrientrich food products, airdried food products because of their affordability, they are quickly gaining traction as their potential to retain major nutrients, minerals, and flavors with no artificial additives position them as a desirable alternative. The popularity of air dried food is on the rise. The global airdried food market has grown due to easy availability to a variety of packaging foods, including airdried packaging foods, rising consumer health consciousness, and rising customer appetite to pay higher prices for airdried foods. Air drying preserves many of the nutrients in food, whereas other methods of preservation can destroy them. People simply enjoy the taste and texture of air longdried food. The AirDried Food Market is projected to witness steady growth from 2025 to 2035, driven by the increasing need for longshelflife food products, meal convenience, and natural food preservation technologies. The market is projected to be USD 105.1 billion in 2025 and reach USD 160.1 billion by 2035, with a compound annual growth rate (CAGR) of 4.3%. (Source: https://www. futuremarketinsights.com/)

Individual Quick Frozen (IQF) Products

IQF technology extends the shelf life of food products, reducing food waste and allowing for greater distribution and storage flexibility. The increasing demand for convenient and readytoeat food products is driving the industry growth. Consumers are seeking frozen food options that require minimal preparation and offer longer shelf life. Further, the trend towards plantbased diets and meat alternatives has led to a surge in demand for IQF frozen fruits, vegetables, and plantbased proteins to cater to the growing vegan and vegetarian consumer base.

The global individual quick freezing market size is worth around USD 22.44 billion in 2024 and is anticipated to reach around USD 37.33 billion by 2034, growing at a CAGR of 5.22% over the forecast period 2024 to 2034.

(Source: https://www.precedenceresearch.com/)

PRODUCT CATEGORIES a) Mushroom Business

The global mushroom market size was valued at USD

71.81 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 119.76 Billion by 2033, exhibiting a CAGR of 5.80% during 20252033. Europe currently dominates the market, holding a significant market share of over 41.9% in 2024. This market is witnessing stable expansion in the region, which is impacted by a growing customer base with healthconscious that are appealed by mushrooms nutritional benefits, culinary versatility, and proliferating uses in both nutraceuticals and pharmaceuticals. The global mushroom market is principally influenced by elevating customer need for functional as well as plantderived foods, pertaining to their highly beneficialmedical and nutritional value. Rapid augmentation in health awareness has further accelerated the consumption of variety of mushrooms as a nutrientrich, lowcalorie food source. In addition to this, proliferating applications in key segments, majorly encompassing dietary supplements, pharmaceuticals, or cosmetics, further impact market dynamics positively, boosted by bioactive compounds present in mushroom. Besides this, innovations in cultivation methodologies, like controlled environment agriculture (CEA), have significantly improved production quality as well as efficacy. Increase in popularity of organic and sustainable products aids mushroom market share expansion, aligning with environmental and health trends worldwide.

The Company produces premium quality Champignon Mushrooms throughout the year strictly under controlled atmospheric conditions. The Companys enhanced Freeze Dried technique ensures that the product retains the colour, shape, flavour and nutritional value better than other drying methods. World class manufacturing facilities with "stateoftheart" technology, GMP & Quality systems make the Company a leading player in the category.

Presently, fresh mushrooms are being viewed as a safe adulteration free alternative to paneer (cottage cheese) for consumption. b) Fruits and Vegetables

The global fruit and vegetable market is undergoing a period of profound transformation driven by a combination of shifting consumer demands, innovative processing technologies, and rapidly evolving distribution methods. In recent years, this market has become increasingly complex due to a blend of traditional agricultural practices and modern retail approaches that cater simultaneously to sustainability and healthfocused trends. The fresh fruits & vegetables segment dominated the fruits and vegetables market in 2024. The global fruits and vegetables market size accounted for USD 231.66 billion in 2024, grew to USD 243.89 billion in 2025 and is projected to surpass around USD 385.94 billion by 2034, representing a healthy CAGR of 5.24% between 2024 and 2034. c) Herbs and Spices

Herbs and spices are extensively used in food and beverages as flavor enhancers and to give a special aroma to foods and beverages to appease the changing taste preferences and flavor profiles of individuals worldwide. In addition, the usage of different herbs and spices is rising as an increasing number of individuals are trying to replicate the restaurantstyle flavor in the dishes they make at home. The growing product demand in the food and beverage (F&B) sector, widespread adoption of spices for medicinal purposes, government support, sustainable sourcing, continuous innovation, and introduction of new blends are some of the major factors propelling the market.

The Indian spices market is poised for robust growth, fueled by rising domestic consumption and escalating export demand. As healthconscious consumers gravitate toward organic options, the demand for natural spices will surge. Innovations in processing and packaging will enhance quality and freshness while the ecommerce segment will expand, offering convenient access to diverse spice varieties and fostering directtoconsumer sales. Indias spices are likely gain a stronger foothold in international markets through strategic marketing and adherence to global standards. Emphasis on sustainable sourcing and the health benefits of spices will cater to the wellness trend, while increased R&D investments will drive innovations in cultivation and product development, ensuring longterm market growth.

PRODUCTWISE PERFORMANCE Sale of Finished Goods

Description	Current Year		Previous Year
	Quantity	Value	Quantity	Value
	(In MTS)	(Rupees in	(In MTS)	(Rupees in
		Lacs)		Lacs)
Processed Foods	1,969.00	13,343.03	1,888.06	10,474.44
Other	1,315.39	1,517.02	1,354.94	1,525.24
Total	3,284.39	14,860.05	3,243.00	11,999.68

OPPORTUNITIES AND THREATS

The food processing industry in India is rapidly emerging as a vital cog in the nations economy. The industry has been significantly contributing to the countrys gross domestic product (GDP), employment and exports, growing at an AAGR (annual average growth rate) of about 7.26% per annum for the past seven years. Food processing increases the value of agricultural products and reduces wastage, while also creating job opportunities and enhancing food security. Food processing is the mainstay of driving agricultural and economic development in India. It is also strategically placed to boost innovation that would work towards raising the livelihoods of millions in the country.

Opportunities

Rising urbanization and changing consumption patterns

Approximately 35% of Indias population resides in urban areas. This number is projected to rise to 50% by 2047 (according to the United Nations). This urbanisation in turn is driving a notable shift in consumption habits, with demand for readytoeat and packaged foods expected to reach Rs. 12 lakh crore (approximately US$ 150 billion) by 2025 (according to Research and Markets). Urban dwellers specially double income families and youth prioritise products that offer timesaving solutions while still meeting their nutritional requirements, driving innovation and diversification within industry.

Focus on health and organic products

The growing emphasis on health and wellness among consumers has led to an increased demand for organic and plantbased foods. The organic food market in India is projected to reach Rs. 75,000 crore (US$ 9 billion) by 2025, growing at a CAGR of 20% (according to the Indian Organic Market Report 2022). A survey indicated that 60% of Indian consumers are willing to pay a premium for organic products. This shift has prompted food processors to expand their offerings to include a wider range of organic fruits, vegetables and plantbased alternatives.

Integration of Technology

Technological advancements are revolutionising the food processing landscape. This integration of technology not only boosts productivity but also favourably positions Indias food processing firms in the competitive global market.

Export potential and demand for Indian ethnic food

The global demand for Indian cuisine has been increasing, with exports of processed food products growing at a CAGR of 15% over the past five years.

MSMEs and startups in rural areas

The food processing sector presents significant opportunities for micro, small, and medium enterprises (MSMEs) and startups, especially in rural regions. As of 2023, there were approximately 63 million MSMEs in India, contributing to 30% of the countrys GDP

(according to the Ministry of Micro, Small and Medium Enterprises). Government schemes, such as the PM Formalisation of Micro Food Processing Enterprises Scheme, have supported over 200,000 MSMEs (according to the Ministry of Food Processing Industries). By improving market access for farmers and fostering local entrepreneurship, these businesses can empower communities and stimulate economic development.

Threats

While food processing provides an opportunity to utilize excess production efficiently, ensuring food & nutritional security and supporting farmers, the Indian food processing industry faces several threats, including infrastructural limitations, lack of proper storage and cold chain facilities, competition from global players, fluctuating raw material prices, and regulatory hurdles. These problems hinder the growth of the sector and increase wastage of agricultural products.

Fluctuating Raw Material Prices

Price volatility in agricultural commodities poses a challenge, impacting the production costs for food processors

Stringent Quality and Safety Standards

Meeting stringent international quality and safety standards can be challenging for smaller enterprises w.r.t. legal compliances for pesticides, heavy metals, etc. Seasonality of operations and low capacity utilization As an agribased Company, the businesses are sensitive to weather conditions, including extremes such as drought and natural disasters. The availability of raw foodprocessing materials required for operations and the demand for products may be adversely affected by longer than usual periods of heavy rainfall in certain regions or a drought in India. The occurrence of any unfavorable weather patterns may adversely affect business, results of operations and financial condition.

Competition from Global Players

The increasing globalization exposes the sector to competition from wellestablished international food processing companies.

Fragmented Regulatory Environment

The new threat of tariffs is from the United States of America as it is destabilizing the businesses due to uncertainties in the market.

The regulatory environment for the industry in India is complex and fragmented. This can make it difficult for businesses to comply with the rules and regulations.

However, the immense potential of the food processing sector in India is driven by abundant resources, a growing consumer base, and supportive government initiatives. To fully harness this potential, addressing infrastructure challenges, increasing processing levels, and improving supply chain integration are imperative. Embracing technological advancements and meeting global quality standards will not only mitigate threats but also position the sector for sustained growth and competitiveness on the world stage. The food processing industry, with its strengths and opportunities, remains a key player in Indias journey toward economic prosperity and agricultural sustainability.

FUTURE OUTLOOK

The food processing sector in India is essential for the diversification of agricultural activities, enhancing value addition, and producing surplus agrofood products for export. This sector bridges agriculture and industry, boosting the value of agricultural produce, ensuring better prices for farmers, and generating global demand for Indian agricultural products. Indias food and beverage packaged industry is witnessing significant growth. The market size is expected to rise from $33.7 billion in 2023 to $46.3 billion by 2028. This growth is driven by rising consumer demand for packaged products due to changing consumption habits and lifestyles, increased awareness, economic growth, demographic shifts, a growing working population, and the expansion of retail and ecommerce sectors.

The food processing industry in India is at the threshold of a major transformation due to a host of reasons: growing urbanization, changing consumer preferences, and above all, a government framework that is supportive of business pursuits. As the domestic processing capacity has reached 20 million metric tonnes since 2014, there are ample opportunities open for innovation as well as investment. The introduction of the PLI Scheme is proving to be a turning point in modernizing the agroindustry ecosystem by incentivizing the manufacturing of readytoeat products, processed fruits, and vegetables; and dairy products, among others, thereby creating infrastructure, attracting technology, enhancing exports, and positioning India as a competitive player in the food market globally. The industry, besides being relevant for ensuring economic growth, provides opportunities for gainful employment, thus supporting the livelihood of millions of people across the country. Recent statistics reveal that the sector has achieved an AAGR of around 7.26% in the past seven years, thus transforming it into a vital segment of the countrys economy.

RISKS AND CONCERNS

Food processing industries cover a wide range of processes and techniques to convert raw agricultural products into edible food items. They increase their shelf life, safety, and quality. The food processing industry is important because it takes perishable products and stabilizes them for longer, making food easier to obtain and more wholesome for consumption. It encompasses several activities such as cleaning, grading, sorting, preservation, packaging, and even advanced processing methods including refining, fermenting, and freezing. Through food security and waste reduction, the Food Processing Industry plays a key role in the agricultural economy and livelihood generation. Furthermore, it serves as an important link between agriculture and the consumer market to catalyze economic growth and modernization in the economy. The products that the Company manufactures or processes are subject to risks such as contamination, adulteration and product tampering during their manufacturing, transport or storage. Inherent business risks exist in form of product liability or recall claims if products fail to meet the required quality standards or are alleged to result in harm to customers. Such risks may be controlled, but not eliminated, by adherence to good manufacturing practices and finished product testing. Further, the Company having its presence in the global food processing industry is exposed to a number of risks such as economic, regulatory, taxation, currency fluctuation and environmental risks. However, the Company has appropriate control mechanism and operating effectiveness to evaluate and mitigate these risks that arise in the natural course of business. Further, exports to specific regions may be severely impacted by protective trade barriers in the form of crippling import duties, antidumping duties, countervailing duties or sanctions as the case may be and our export volumes to specific markets could get majorly affected by such restrictive impositions. The Company aims to meet highest quality levels and achieve customer satisfaction by providing premium quality products, fully grown and processed in best natural ways.

INTERNAL CONTROL SYSTEM, THEIR ADEQUACY AND OPERATIVE EFFECTIVENESS

Internal control is an essential part of the corporate governance and management of the Company. The Company has defined the operating principles for internal control. The Audit Committee of the Company monitors the effectiveness and efficiencyof of the financial reporting. The aim of internal control is to ensure reliability of financial reporting, effectiveness and efficiency of operations as well as compliance with laws and regulations. Control of financial reporting assures that financial statements are prepared in a reliable manner. The aim is also to ensure that all financial reports published and other financial information disclosed by the Company provide a fair view on the Companys financial situation. Control of operations is aimed at ensuring effectiveness and operations and achievement of the Companys strategic and financial objectives. Control of compliance ensures that the Company follows applicable laws and regulations. The internal control framework of the Company is commensurate with the type, size, scope, and complexity of operations. The framework enables strict adherence to regulatory compliance and proper documentation of all transactional information. To ensure that transactions are properly authorised, documented and reported the Company has robust and effective internal financial control mechanisms in place. To ensure robustness of operations, the Company conducts internal audits and evaluates them regularly. To guarantee smooth and effective operations, the audit committee is entrusted with the responsibility of establishing and maintaining suitable internal financial controls. The Committee reviews the various issues and material weaknesses highlighted by the Internal and Statutory Auditors, on a periodic basis. Prompt and adequate corrective actions are undertaken as deemed fit to mitigate any risks.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company has amicable employee relations at all locations and would like to place on record its sincere appreciation for the unstinted support it continues to receive from all its employees. The Company also continued to focus on manpower productivity and Year under review and hence drives various learning and development interventions in this regard, in line with the organizational objectives. The Company is also committed to foster employee engagement and connect, while maintaining a safe and healthy workplace. The Company has several policies formulated for the benefit of employees, which promote gender diversity, equal opportunity, prevention of sexual harassment, safety and health of employees. As on March 31, 2025, the total number of permanent employees of the Company was 467. The Companys industrial relations continued to be harmonious during the year under review.

ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY

The Company constantly strives to make this world a better place. As a responsible corporate citizen, the Company will continue to make efforts towards reducing its environmental impact and work towards wellbeing & inclusive development of the society. Further, the Company gives utmost importance to the health and safety of its workers and the environment it operates in. The Company provides a clean, hygienic and safe working environment to its employees and provides them with appropriate training to carry out their duties safely. Prevention of safetyrelated incidents is one of Companys highest priorities. The Company strictly adheres to all EHSrelated laws and regulations. Specialized teams are responsible for monitoring workplace safety at production facilities. Open communication enables the Company to ensure zero hazards at the workplace.theinternal control systems and the correctness

ANALYSIS OF FINANCIAL AND OPERATIONAL PERFORMANCE

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.

A. FINANCIAL CONDITIONS

The composition and growth of assets was as under:

[Rs. in lacs]

Particulars	March 31, 2025	March 31, 2024	Growth %
Land & Investment Property	1,397.81	1,397.81	0.00%
Buildings	8,701.70	8,020.13	8.50%
Plant & Equipments	25,650.51	25,566.57	0.33%
Electrical Fittings & Installations	1,562.25	1,559.99	0.14%
Office Equipments	420.60	415.97	1.11%
ERP Software	32.49	32.49	0.00%
Furniture & Fixtures	106.88	106.46	0.39%
Vehicles	228.04	239.24	(4.68%)
Right of use assets	272.41	258.99	5.18%
Total	38,372.69	37,597.65
Less: Acc. Depreciation	12435.54	10,781.88
Add: CWIP	51.14	221.75
Net Fixed Assets	25,988.29	27,037.52

B. RESULTS OF OPERATIONS

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

(Rs.in lacs)

Particulars	Year ended	Year ended
	March 31, 2025	March 31, 2024
	Amount %	Amount %
INCOME
Revenue from operations	15,001.20 99.75	12,128.15 99.67
Other income	37.99 0.25	40.54 0.33
Total Revenue	15,039.19 100.00	12,168.69 100.00
EXPENDITURE
Raw Material Consumed	4,601.80 30.60	3637.8 29.89
Purchase of Stock in Trade	10.50 0.07	0.73 0.01
(Increase)/Decrease in stock	248.80 1.65	(989.37) (8.13)
Change in Inventory of Biological Assets	9.14 0.06	(8.12) (0.07)
Gain in Change in fair value of Biological Assets	(2.04) (0.01)	(2.67) (0.02)
Manufacturing Exp.	5,362.21 35.66	4897.58 40.25
Payment & Benefit to Emp.	2,722.56 18.10	2596.02 21.33
Administrative, Selling & Other Expenses	2,460.88 16.36	2214.47 18.20

 

Particulars	Year ended	Year ended
	March 31, 2025	March 31, 2024
	Amount %	Amount %
OPERATING EXPENSES	15,413.85 102.49	12346.44 101.46
EBDIT	(374.66) (2.49)	(177.75) (1.46)

C. SIGNIFICANT CHANGES IN FINANCIAL RATIOS

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

Financial Ratio	FY	FY	Change	Reason for change
	202425	202324
Debt Equity Ratio	6.71	3.49	92.30%	The significant Change in these ratios are due to
				the additional borrowings raised by the Company
Debt Service	(0.25)	(0.20)	25.00%	during the year for stabilization of new Project at
Coverage Ratio				Krishnagiri, Tamil Nadu which was completely
				capitalized on 31.05.2023. Further, as the
				capacity was not fully utilized and due to this
				turnover was also less than the Expected, which
				resulted in net losses during the year.
Return on Equity	(55.5%)	(29.3%)	89.80%	The significant Change in these ratios is due to
				reason, the capacity was not fully utilized in the
				new Project at Krishnagiri, Tamil Nadu, due to
				which turnover was also less than the Expected.
				This has resulted in net losses during the year.
Inventory Turn	1.04	0.63	65.10%	Change is due to increase in consumption of
over Ratio				raw material on account of increase in sales in
				Current year as compared to previous year.
Net Capital Turn	(4.61)	(28.35)	83.70%	Change is due to increase in sales in current year
over Ratio				as compared to previous year further increase
				is due to the additional borrowings raised by the
				Company during the year and Input Tax credit
				on Input services transferred from other current
				asset to property, plant and equipment on basis of
				order passed for Safari Retreats Private Limited
				vs. Chief Commissioner of CGST [TS350HC
				2019(ORJ)NT] during the year.
Return on Capital	(7.94%)	(6.19%)	28.20%	a) The significant Change in these ratios are
Employed				due to the additional borrowings raised by the
				Company during the year for stabilization of
				new Project at Krishnagiri, Tamil Nadu which
				was completely capitalized on 31.05.2023.
				Further, as the capacity was not fully utilized
				and due to this turnover was also less than
				the Expected, which resulted in net losses
				during the year.
				b) The significant Change in these ratios is due
				to reason, the capacity was not fully utilized
				in the new Project at Krishnagiri, Tamil
				Nadu, due to which turnover was also less
				than the Expected. This has resulted in net
				losses during the year.

SECRETARIAL COMPLIANCE REPORT OF FLEX FOODS LIMITED

FOR THE FINANCIAL YEAR ENDED ON 31^ST MARCH, 2025

I, Mahesh Kumar Gupta, have examined: all the documents and records made available to me and explanation provided by FLEX FOODS LIMITED a) (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 Report, for the financialyear ended 31^st March, 2025 ("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 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 NonConvertible Securities) Regulations, 2021 Not applicable as the Company has not issued any NonConvertible 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 hereby report that, during the Review Period: (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

ANNEXURE G

y No.	Compliance Requirement (Regulations/ circulars/ guidelines including specific clause)	Regu lation/ Circular No.	Deviations	Action Taken by	Type of Action	Details of Violation	Fine Amount	Observations/ Remarks of the Prac ticing Company Secretary	Manage ment Re sponse	Remarks
					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

Sr. No.

Observations/ Remarks of the Practicing Company Secretary in the previous report

Observations made in the Secre tarial Compliance Report for the year ended (The year to be mentioned)

Compliance Requirement (Regulations/ circulars/ guidelines including specific clause)

Details of violation/devia tions and actions taken/ penalty imposed, if any, on the listed entity

Remedial actions, if any, taken by the listed entity

Comment of the PCS on the ac tions taken by the listed entity

(c) I, hereby report that, during the Review Period the compliance status of the listed entity with the following requirements:

Sr. Particulars No.	Compliance Status (Yes/No/ NA)	Observations/ Remarks by PCS
1. Secretarial Standards:
The compliances of the listed entity are in accordance with the applicable	YES
Secretarial Standards (SS) issued by the Institute of Company Secretaries
India (ICSI).
2. Adoption and timely updation of the Policies:
All applicable policies under SEBI Regulations are adopted with the	YES
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/	YES
guidelines issued by SEBI
3. Maintenance and disclosures on Website:
The Listed entity is maintaining a functional website	YES
Timely dissemination of the documents/ information under a separate	YES
section on the website
Weblinks provided in annual corporate governance reports under	YES
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 Section164
of Companies Act, 2013..
	YES
5. Details related to Subsidiaries of listed entities:		There is no subsidiary/ Material Subsidiary of the Company
	NA
(a) Identification of material subsidiary companies
(b) Requirements with respect to disclosure of material as well as other	NA
subsidiaries.
6. Preservation of Documents:
The listed entity is preserving and maintaining records as prescribed	YES
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,	YES
Independent Directors and the Committees at the start of every financial
year as prescribed in SEBI Regulations.
8. Related Party Transactions:
(a) The listed entity has obtained prior approval of Audit Committee for all	YES
related party transactions;
(b) In case no prior approval obtained, the listed entity shall provide detailed reasons along withconfirmationwhether the transactions were subsequently approved/ratified/ rejected by the Audit Committee.	NA	There is no such transaction

 

Sr. Particulars Compliance	Compliance Status (Yes/No/ NA)	Observations/ Remarks by PCS
9. Disclosure of events or information:
The listed entity has provided all the required disclosure(s) under YES
Regulation 30 along with Schedule III of SEBI LODR Regulations within
the time limits prescribed thereunder.
10. Prohibition of Insider Trading:
The listed entity is in compliance with Regulation 3(5) & 3(6) SEBI YES
(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/ YES
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 (or)
The action taken against the listed entity/its promoters/directors/
subsidiaries either by SEBI or by Stock Exchanges are specified in the
last column.
12 Resignation of Statutory auditors from the listed entity or its material
subsidiaries
NA	There is no resignation of the Auditor
In case of resignation of statutory auditor from the listed entity or any of
its material subsidiaries during the financial year, the listed entity and/or
its material subsidiary(ies) has/have complied with paragraph 6.1 and 6.2
of section VD of chapter V of the Master Circular on compliance with the
provisions of the LODR Regulations by the listed entities.
13 Additional noncompliances, if any:
No additional noncompliance observed for any SEBI regulation/circular/ YES
guidance note etc. except as reported above

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,2015and is neither an assurance as to the future viability of the or effectiveness with which the management has conducted the affairs of the listed entity. listedentitynoroftheefficacy

Place : Delhi For Mahesh Gupta and Co. Date : 16th May, 2025 Company Secretaries

#MDStart#Mahesh Kumar Gupta Proprietor FCS No.: 2870::C P No.: 1999 Peer review certificate no. 6470/2025 UDIN NO.: F002870G000357774