Flex Foods Ltd Management Discussions

ANNEXURE -F

FORWARD-LOOKING STATEMENTS

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.

MACROECONOMIC OVERVIEW

After withstanding higher trade barriers and elevated uncertainty last year, global activity now faces a major test from the outbreak of war in the Middle East. Assuming that the conflict remains limited in duration and scope, slowdown in growth and increase in inflation are expected to be particularly pronounced in emerging market and developing economies. Downside risks dominate the outlook. A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations surrounding artificial-intelligence-driven productivity, or renewed trade tensions could significantly weaken growth and destabilize financial markets. Elevated public debt and eroding institutional credibility further heighten vulnerabilities. At the same time, activity could be lifted if productivity gains from AI materialize more rapidly or trade tensions ease on a sustained basis

GLOBAL ECONOMIC OUTLOOK

The global economy has shown resilience despite elevated trade tensions and policy uncertainty. Growth in 2025 was underpinned by transitory factors, notably pre-tariff stockpiling, strong financial-market sentiment, and a surge in investment related to artificial intelligence. However, the recovery since the 2020 recession has been uneven, with many EMDEs, especially low-income and fragile states - continuing to lag. This resilience is currently weakening as higher tariffs, persistent uncertainty, and softer foreign investment weigh on trade, business confidence, and job creation. Global growth is projected to slow to 2.6 percent in 2026 (Source: World Bank Global Economic Prospects, January 2026), with the ongoing Middle East conflict creating additional headwinds. Trade is expected to decelerate further as inventories unwind and the impact of tariff intensifies, posing significant structural challenges for EMDEs with rapidly expanding labor forces.

ENERGY MARKET DISRUPTIONS

Since late February, the closure of significant energy infrastructure and a near-halt in shipments through the Strait of Hormuz have disrupted the global flow of crude oil, oil products, and liquefied natural gas (LNG). Key facts:

• Oil and oil product exports through the Strait represented approximately 20% of global production in 2025 and 25% of global seaborne oil trade (Source: International Energy Agency). •

• For LNG, approximately 93% of Qatars exports and 96% of the UAEs exports transited through the Strait — representing nearly one-fifth of global LNG trade, with no viable alternative routes.

• The most immediate impact is concentrated in Asia, where many countries are heavily dependent on energy imports from the region. However, given the interconnected nature of global energy markets, disruptions are expected to spread quickly.

Elevated energy prices and supply chain disruptions will increase inflationary pressures, dampen private consumption, and erode investor confidence globally. Notwithstanding these challenges, upside potential remains as firms realign supply chains and as broader AI adoption begins to support productivity. Coordinated global action — particularly to stabilise trade and ease financing pressures for EMDEs — remains essential. (Source: www.oecd.org)

INDIAN ECONOMIC OVERVIEW

Over the last two decades, India has been among the worlds fastest growing large economies. Its robust GDP per capita growth has mostly been driven by total productivity and capital accumulation. Labor utilization contributed to a lesser extent due to persistently low labour force participation rates, particularly among women.

Despite the increase in US tariffs on Indias merchandise exports from August 2025, the Indian economy continued to lead among major economies. Growth accelerated to 7.6% in FY 2025-26, up from 7.1% in FY 2024-25, reflecting robust domestic demand supported by low inflation, income tax and GST cuts, and more accommodative monetary conditions. Manufacturing and services performed strongly on the supply side, while net exports contributed negatively to GDP growth as import growth accelerated.

In FY 2026-27, growth is projected at 6.6%, reflecting headwinds from the Middle East conflict. While Indias strong macroeconomic buffers — including healthy foreign exchange reserves and a resilient financial sector—offer some protection against downside risks, the conflict underscores the importance of energy diversification, prudent fiscal management, and trade diversification. (Source: www.worldbank.org)

STRUCTURAL CONSTRAINTS

Structural constraints continue to hinder faster growth in Indias labour productivity. Inadequate infrastructure disrupts business operations and limits access to broader markets and technologies. High informality and underrepresentation of women in skilled employment represent a missed opportunity to fully harness the countrys human capital. Trade and investment barriers hold back Indias integration into global value chains.

Further, the year 2025 marked an inflection point: Policy overhauls across Western economies particularly in trade, investment, and industrial policy triggered spillover effects across all major global markets. India was not immune to these shifts. Intricately connected to global value chains, India, the worlds fourth largest economy and a major global trading partner, faced external shocks and acute effects from these global policy changes, including tariff escalations and volatile capital flows.

The Indian economy is expected to sustain its growth momentum, supported by strong structural fundamentals, favourable demographics and continued policy reforms. Robust domestic demand sustained public infrastructure spending and improving private investment sentiment are expected to provide a stable foundation for expansion. Policymakers are therefore expected to maintain a calibrated approach that supports growth while preserving price stability, ensuring adequate liquidity and safeguarding financial stability across the system.

INDUSTRY SCENARIO AND DEVELOPMENT

India, a South Asian nation, is the seventh largest country by area, the most populous country with over 1.46 billion people, and the most populous democracy in the world. India boasts of an immensely rich cultural heritage, including numerous languages, traditions, and people and remains one of the worlds fastest growing major economies although it faces challenges common to many other countries such as inflationary pressures, commodity price volatility, supply chain vulnerabilities, and global geopolitical and demand risks, as well as challenges common to developing economies such as weak IPR enforcement and a wide range of other regulatory and non-regulatory barriers to doing business in the country.

The country holds its uniqueness in its diversity and hence has adapted itself to international changes with poise and comfort. While the economy has welcomed international companies to invest in it with open arms since liberalization in the 1990s, Indians have been prudent and proactive in adopting global approaches and skills. Indian villagers have proudly taken up farming, advanced agriculture, and unique handicrafts as their profession on one hand, while the modern industries and professional services sectors are coming up in a big way on the other.

Thus, the country is attracting many global majors for strategic investments owing to the presence of a vast range of industries, investment avenues, and a supportive Government. A huge population, mostly comprising the youth, is a strong driver for demand and an ample source of workforce.

Flex Foods Limited is a premier Indian manufacturer specializing in high-quality freeze-dried, air-dried, and IQF (Individually Quick Frozen) mushrooms, herbs and fruits & vegetables, serving a diverse global clientele for over three decades, serves a diversified customer base across the food processing segments, delivering cost-effective consumer needs. The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year. In India, the food sector has emerged as a high-growth and high- profit sector due to its immense potential for value addition, particularly within the food processing industry.

Food Processing Industry Trends

The global food processing sector is experiencing steady growth, driven by evolving consumer lifestyles, growing demand for convenience foods, and increasing awareness of food safety and quality. Urbanization and the increasing number of working hours are pushing consumers to opt for ready-to-eat, ready-to-cook, and packaged food products which provide convenience without compromising on taste and nutritional value. The increasing adoption of modern retail, online grocery shopping platforms, and quick-service restaurants is further fueling the demand for standardized and shelf-stable food products.

Indias food processing industry in 2026 continues to demonstrate steady expansion, supported by strong domestic demand, export orientation, and sustained policy intervention. The food processing market in India is projected to grow at a CAGR of 6.8% during 2025-2031, driven by the rising disposable income and consumer spending in the country. With the increased health consciousness among urban consumers, processed foods are becoming more popular as they provide convenience and assurance of quality. Additionally, factors such as changing lifestyle trends, rapid urbanization, growth of online channels for distribution and an increase in foreign investments are expected to further drive the demand for processed foods over the forecast period. Moreover, initiatives taken by government bodies aimed at boosting domestic production capability has helped create new opportunities for players operating within this space.

Key Market Drivers:

• Rising Disposable Income & Increasing Consumer Spending: The rising disposable income combined with increasing consumer spending on food products have led to a surge in demand for convenience food items such as breads and ready-to-eat meals which can be easily accessed from supermarkets or eCommerce platforms.

• Changing Lifestyle Trends & Rapid Urbanization: Owing to changing lifestyle trends along with rapid urbanization in recent times there has been a shift towards convenience foods that can be quickly prepared at home or outdoors without compromising on taste or nutrition values.

• Growth of Online Channels for Distribution: Growing internet penetration and advances in digital payments have enabled FMCG companies to expand beyond traditional retail, reaching previously inaccessible rural markets and creating significant growth potential.

Key Market Trends:

• Increasing Focus on Premium Products: The premium segment has witnessed remarkable growth, driven by a rise in affluent households seeking healthy, nutritious options — including organic produce, frozen or pre- cooked meals, and high-value branded offerings.

• Emergence of Plant-Based Alternatives: Growing consumer awareness of environmental and health impacts has fueled the emergence of plant-based alternatives to dairy, eggs, and meat — catering to a rising vegan and vegetarian population and spurring significant product innovation.

Indias food and beverage packaging market size in 2026 is estimated at USD 40.73 billion, growing from 2025 value of USD 38.27 billion with 2031 projections showing USD 55.67 billion, growing at 6.44% CAGR over 2026-2031. Rising processed-food penetration, mandatory recycled-content rules, and e-commerce expansion are reinforcing steady demand for packaging that stretches shelf life and meets safety norms. Government incentives such as the Production Linked Incentive Scheme, worth INR 10,900 crores, are stimulating capital investment in automated lines and cold- chain infrastructure. Flexible formats still dominate volumes,

yet rigid options are gaining traction because premium beverages and export-oriented ready meals need stronger protection. Input price volatility compressed converter margins to a decade-low 8% in 2024, but recyclate supply bottlenecks and capacity additions in rigid formats point to widening opportunities for vertically integrated firms. (Source: https:// www.mordorintelligence.com)

BUSINESS OVERVIEW

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, Air- Dried, Frozen and IQF (Individually Quick Frozen) product range of mushrooms, herbs, spices and fruits / vegetables, meeting strict quality & hygiene standards. Canned button mushrooms in various shapes and sizes are 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 quick-frozen processing caters 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

Freeze drying is a widely adopted preservation method that retains the original texture, colour, flavour, aroma, and nutritional value of food products. Key advantages include a long shelf life without compromising quality, and significantly reduced weight for ease of transport and storage. As demand for lightweight, nutrient-dense food grows, freeze-dried products have emerged as a preferred choice among health-conscious consumers globally. The Companys freeze-dried products preserve flavour more effectively than conventional dehydrating methods, resulting in brighter, fresher-tasting results. The Companys range under this category includes freeze- dried herbs, fruits, vegetables, and mushrooms.

• Air Dried Products

Air-dried food products are gaining rapid popularity as consumers increasingly seek minimally processed, additive-free options. Air drying preserves a high proportion of natural nutrients, minerals, and flavours without the use of artificial additives — positioning these products as a desirable alternative to conventionally processed foods. The growing global air-dried food market reflects increased consumer health consciousness and a willingness to pay a premium for natural, high-quality food products.

• 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 ready-to-eat food products is driving industry growth. Consumers are seeking frozen food options that require minimal preparation and offer longer shelf life. Further, the trend towards plant-based diets and meat alternatives has led to a surge in demand for IQF frozen fruits, vegetables, and plant-based proteins to cater to the growing vegan and vegetarian consumer base.

PRODUCT CATEGORIES

a) Mushroom Business

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 color, shape, flavor and nutritional value better than other drying methods. World class manufacturing facilities with “state-of-the-art” technology, GMP & Quality systems make the Company a leading player in the category.

The global mushroom market is principally influenced by elevating customer need for functional as well as plant- derived foods, pertaining to their highly beneficial medical and nutritional value. Rapid augmentation in health awareness has further accelerated the consumption of variety of mushrooms as a nutrient-rich, low-calorie 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 global mushroom market size was valued at USD 76.0 Billion in 2025. Looking forward, IMARC Group estimates the market to reach USD 123.7 Billion by 2034, exhibiting a CAGR of 5.57% during 2026-2034. Europe currently dominates the market, holding a significant market share of over 41.9% in 2025. This market is witnessing stable expansion in the region, which is impacted by a growing customer base with health- conscious that are appealed by mushrooms nutritional benefits, culinary versatility, and proliferating uses in both nutraceuticals and pharmaceuticals. (Source: https:// www.imarcaroup.com)

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 health-focused trends.

The global frozen fruits and vegetables market size reached USD 28.2 Billion in 2025. Looking forward, IMARC Group expects the market to reach USD 34.6 Billion by 2034, exhibiting a growth rate (CAGR) of 2.20% during 2026-2034. The market is majorly driven by the increasing health consciousness, rising demand for convenience foods, continual advancements in freezing technology, expanding e-commerce platforms, rising demand for nutritious and long-lasting alternatives to fresh produce, and an enhanced focus on reducing food waste. (Source: https://www.imarcarouD.com)

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 restaurant-style 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 global herbal supplements market size reached USD 41.6 Billion in 2025. Looking forward, IMARC Group expects the market to reach USD 69.3 Billion by 2034, exhibiting a growth rate (CAGR) of 5.65% during 2026- 2034. The increasing awareness of the health benefits of herbal supplements, a growing preference for natural and organic products, the rise of e-commerce platforms facilitating accessibility, the influence of traditional medicine systems, and advancement in research and development (R&D) activities are some of the factors supporting market growth. (Source: https://www.imarcaroup.com)

The global spices and seasonings market size was valued at USD 29.9 Billion in 2025. Looking forward, IMARC Group estimates the market to reach USD 45.1 Billion by 2034, exhibiting a CAGR of 4.53% from 2026-2034. Asia Pacific currently dominates the market, holding a market share of over 78.5% in 2025. The increasing interest in international cuisines, culinary diversity, the rising consumer demand for natural and healthier flavor enhancers, and the inflating disposable incomes of individuals are some of the leading market growth factors in this region. (Source: https://www. imarcaroup.com)

PRODUCT-WISE PERFORMANCE

Sale of Finished Goods

Description	Current Year		Previous Year
	Quantity (In MTS)	Value (Rupees in Lacs)	Quantity (In MTS)	Value (Rupees in Lacs)
Processed Foods	2,004.88	17,444.65	1,969.00	13,343.03
Other	1,315.48	1,560.22	1,315.39	1,517.02
Total	3,320.36	19,004.87	3,284.39	14,860.05

OPPORTUNITIES AND THREATS

Food processing industry in India sits at the centre of three powerful forces: rising consumer demand, agricultural transformation, and policy-driven industrialisation. What was once a fragmented, low-margin extension of farming has become a strategic manufacturing sector — one that connects farmers to markets, reduces food wastage, creates rural jobs, and supplies both domestic and global consumers. It is no longer limited to basic milling or packaging. It now includes ready-to-eat foods, dairy processing, frozen products, beverages, snacks, marine processing, and value-added agri- products. In 2026, the industry is growing steadily, but the real story is formalisation and value addition, not just scale.

Opportunities

• Quantity of raw material available

Agriculture is one of the cornerstones of Indias economy and society, providing a livelihood to nearly 55% of the population. With the worlds second-largest agricultural land area, India is a global leader in farm output and is the 2nd largest producer of Fisheries, Fruits & Vegetables, Cereals, etc.

• High-yield Varieties (HYV) of Food

High-yield varieties (HYV) of food like horticulture, dairy, etc have low shelf life. This is where FPI can come into play and subsequently increase farmers income.

• Diversity

India has a variety of raw materials available which can help develop a host of innovative food products from the diverse raw materials.

• Expansion potential

India currently processes only 10% of its food material, compared to the US at 65% and China at 23%. India also has a cheap workforce which can be upskilled as necessary.

• Ensurina Nutritional Security

Processed foods when fortified with vitamins and minerals can reduce the nutritional gap in the population.

• Larae Consumption Economy

With rising incomes and standard of living, demand for items immediately available to eat or cook and safe processed food

• Hiah value addition

The 10% of processed food in India is 1/3 of the total food market by value.

• Supportive Policy and Investment Environment

Government has taken various steps for the promotion of FPIs such as up to 100% FDI under the automatic route, incentives under various government schemes and PLI in the FPI sector in India.

Threats

• Infrastructure Bottlenecks: Inadequate cold chain and storage facilities result in more than 30% of agricultural produce being lost post-harvest. Poor connectivity and the absence of all-weather roads further disrupt perishable supply chains and increase costs.

• Limited Technology Access for SMEs: Small and medium enterprises often lack access to modern processing equipment and technology. High upgrade costs restrict innovation and competitiveness relative to larger firms.

• Reaulatory and Export Compliance Challenaes: Diverse regulations across government ministries create inconsistencies in food safety standards, complicating compliance with the international quality requirements needed to sustain and grow export business.

• Skilled Labour Shortage and R&D Gaps: The industry faces a shortage of trained labour and a relative lack of research and development investment — limiting the pace of innovation and technology adoption.

To fully harness the sectors potential, addressing infrastructure challenges, increasing processing levels, and improving supply chain integration are imperative. Embracing technological advances and meeting global quality standards will not only mitigate threats but also position the Indian food processing sector for sustained growth and global competitiveness.

FUTURE OUTLOOK

Food processing industry is of mammoth significance for Indias development because it links two pillars of the economy, industry and agriculture. This industry needs agricultural products for further value addition. Promoting food processing is a key to enhance farm incomes in India, as it raises the demand for agricultural produce.

The food processing sector in India is essential for the diversification of agricultural activities, enhancing value addition, and producing surplus agro-food 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 e-commerce 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 agro-industry ecosystem by incentivizing the manufacturing of ready-to-eat 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.

• Fruit Snacks Market

According to the latest report by IMARC Group , titled “Fruit Snacks Market Report by Product Type (Sweet and Savory Chips, Fresh Cuts and Slices, Candies and Bars, Dairy-Based, and Others), Fruit Type (Apple, Mango, Banana, Pineapple, Berries, Mixed, and Others), Distribution Channel (Supermarkets and Hypermarkets, Convenience Stores, Specialty Food Stores, Online Stores, and Others), and Region 2026-2034,” the global fruit snacks market reached a value of USD 7.3 Billion in 2025. Fruit snacks refer to processed confectioneries that are prepared using fruit juice and pulp. They are commonly made by using several fruits, such as apple, mango, banana, berries and pineapple, along with sugar, gelatin, corn syrup and fruit concentrate. These fruits are usually preserved by freeze-drying the fresh products that aid in retaining their natural flavor and nutritional value. They are further fortified using thickening agents, preservatives and natural and artificial flavoring agents. Widely characterized by extended shelf life and convenience of storage, they are available in the forms of dips, fruit chips and chunks, popsicles, jellies, gummies and smoothies. (Source: https://www.imarcaroup.com)

Global Fruit Snacks Market Trends:

The global market is primarily driven by considerable growth in the food and beverages sector. With the shifting dietary patterns of the masses and the growing preference toward healthy snacking options, there has been a rise in the demand for fruit snacks across the globe. This is also supported by the inflating disposable income levels of individuals and easy product availability through online and offline organized retail channels. The market is further driven by the launch of fruit snacks in exotic and tropical variants, which are gaining widespread prominence among the masses. Numerous manufacturers are also introducing product variants that are prepared using organic and non-genetically modified (GMO) ingredients to cater to the shifting preferences of their consumers. Some of the other factors contributing to the market include aggressive promotional activities by vendors and extensive research and development (R&D) activities in production technologies. Looking forward, IMARC Group expects the market to reach USD 12.5 Billion by 2034, exhibiting a growth rate (CAGR) of 5.91% during 2026-2034. (Source: https://www.imarcaroup.com)

The Company is making efforts to explore the Global Fruit Snacks Market.

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. Although the Company has product liability insurance cover for domestic and international markets for businesses, it cannot assure that this insurance coverage is adequate or that any losses will be adequately compensated by the insurers in the event of a product liability claim.

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, anti-dumping 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 efficiency of the internal control systems and the correctness 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 efficiency of 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 efficiency during the Financial 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. 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 well-being & 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 safety-related incidents is one of Companys highest priorities. The Company strictly adheres to all EHS-related 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.

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 31,2026	March 31,2025	Growth %
Land & Investment Property	1,396.64	1,397.81	-0.08%
Buildings	8,706.23	8,701.70	0.05%
Plant & Equipments	26,047.25	25,650.51	1.55%
Electrical Fittings & Installations	1,562.25	1,562.25	0.00%
Office Equipments	422.48	420.60	0.45%
ERP Software	32.49	32.49	0.00%
Furniture & Fixtures	106.88	106.88	0.00%
Vehicles	228.04	228.04	0.00%
Right of use assets	272.41	272.41	0.00%
Total	38,774.67	38,372.69	-
Less: Acc. Depreciation	14,196.97	12,435.54	-
Add: CWIP	74.74	51.14	-
Net Fixed Assets	24,652.44	25,988.29	-

B. RESULTS OF OPERATIONS

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

(Rs.in lacs)

Particulars	Year ended March 31, 2026		Year ended March 31, 2025
	Amount	%	Amount	%
INCOME
Revenue from operations	19,188.86	99.49	15,001.20	99.75
Other income	97.80	0.51	37.99	0.25
Total Revenue	19,286.66	100.00	15,039.19	100.00
EXPENDITURE
Raw Material Consumed	6,150.39	31.89	4,601.80	30.60
Purchase of Stock in Trade	11.57	0.06	10.50	0.07
(Increase)/Decrease in stock	(593.27)	(3.08)	248.80	1.65
Change in Inventory of Biological Assets	6.98	0.04	9.14	0.06
Gain in Change in fair value of Biological Assets	(14.39)	(0.07)	(2.04)	(0.01)
Manufacturing Exp.	6,608.69	34.27	5,362.21	35.65
Payment & Benefit to Emp.	2,880.00	14.93	2,722.56	18.10
Administrative, Selling & Other Expenses	4,134.76	21.44	2,460.88	16.36
OPERATING EXPENSES	19,184.73	99.47	15,413.85	102.49
EBDIT	101.93	0.53	(374.66)	(2.49)

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 the previous year are summarized below:

Financial Ratio	FY 2025-26	FY 2024-25	Change	Reason for change
Debt Equity Ratio	33.36	6.71	397.2%	The Ratio is adversely impacted by the losses incurred by the company primarily due to the losses on account of foreign currency exchange losses on its outstanding foreign currency loans and the outstanding unsecured loans secured by the company from its related parties within the promoter group for stabilization of the new project at Krishnagiri, Tamil Nadu.
Debt Service Coverage Ratio	(0.08)	(0.25)	(68.00%)	The improvement in the ratio is primarily attributable to improved EBITDA performance during the year. However, the Company has also availed unsecured loans, resulting in higher finance costs on account of additional borrowings.
Return on Equity	(125)	(0.56)	124.4%	The Ratio is adversely impacted by the losses incurred by the company primarily due to the losses on account of foreign currency exchange losses on its outstanding foreign currency loans leading to further reduction in shareholders fund in current year. Further, due to increase in consumption of raw material on account of increase in sales in current year as compared to previous year.