Indrayani Biotech Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

It is expected that global growth for 2024 and 2025 will be steady, though growth is projected to remain below its longer-run average. The global economy has proved resilient, inflation has declined and risks to the outlook are becoming more balanced.

Geopolitical uncertainty is elevated, with nearly half of the worlds population already voting or heading to the polls this year. Hot wars and trade tensions are flaring, which could fuel more isolationist policies. The resulting risk is more frequent bouts of inflation and activist monetary policies. Friend-shoring, re-shoring and near-shoring are reshuffling supply chains as producers hedge against geopolitical risk, often at higher costs. The conflict in the Middle East has caused seaborne trade to be rerouted, while higher-than-expected demand and weather have also increased shipping costs. The National Atmospheric and Oceanic Administration expects a record number of major storms for 2024, which will only add to shipping times and snarled travel.

Prospects for 2025 are better, with inflation expected to return towards target. The silver lining is a tailwind for big-ticket consumer purchases and business investment. Mergers and acquisitions activity could also gather steam, as financial conditions ease and dry powder is deployed. However, the uncertainty remains around the policy shifts, which will likely fuel more insular and protectionist policies.

Source: International Economic overview reports and publications.

ECONOMIC OVERVIEW INDIA

Indias GDP grew at a massive 8.4 per cent during the October-December quarter of the financial year 2023-24, and the country continued to remain the fastest-growing major economy and is poised to maintain its growth trajectory going ahead in financial year 2024-25.

Based on the macroeconomic parameters that are doing pretty well, the country is all set to overtake Japan as 4th largest economy in the world by 2025. The size of Indias GDP is currently ranked 5th, after the US, China, Germany, and Japan. It overtook the UK in 2022. Just a decade ago, Indian GDP was the eleventh largest in the world. Currently, Indias GDP is estimated to be around USD 3.7 trillion.

Some of the parameters which attribute towards Indias firm growth are

Double-digit growth in the steel, cement, and automobile manufacturing sectors;

Global leader in digital public infrastructure, with e-transactions surging to 134 billion, accounting for 46 per cent of all global digital payments;

Accounts opened under Jan Dhan, Aadhaar and Mobile trinity have over Rs 2.32 lakh crore as current balance;

Average annual inflation between 2013-14 and 2022-23 declined to 5 per cent from 8.2 per cent between 2003-04 and 2013-14.

Firm GDP growth forecasts, inflation at manageable levels, political stability at the central government level, and appreciable central bank monetary policy, have all contributed to painting a bright picture for the Indian economy in recent quarters.

Based on the above, the near-term future of Indian economy looks bright and conducive for growth of India business houses.

Source: Various publications in Indian Media

BUSINESS OVERVIEW AND PHILOSOPHY

The mission and growth model of the company is to continuously identify and aggregate prospective MSMEs having potential for high growth, managed by committed, dynamic entrepreneurs with a holistic vision, aspiring to succeed, who look for help and support in some form. The companys model is to promote inclusive growth with participatory and complementary style of management and to provide an ecosystem to unlock value of the aggregated entity.

MSME Companies are considered to be the backbone, mainstay and employment providers in the industrial sector of India. However, they are fraught with massive challenges which are seldom overcome independently. Promising companies with a potential to make it big, get embroiled in real life challenges and end up with either a stunted growth or in an irrecoverable debt trap shattering the dreams of the first-generation entrepreneurs as they go unrewarded for their merits, effort and toil.

In this regard, the company believes in the three dimensions to support the model.

Promoting Inclusive growth

Being socially relevant and responsible

Providing an eco-system to unlock value

Promoting Inclusive growth:

The company has a very innovative, validated, and proven model which provides a safety net, a launching pad and a stable platform for such MSME companies. The company aggregates and assimilates such MSME companies and take them in as a subsidiary, based on mutual agreement.

The company has a unique approach to handle the challenges faced by MSMEs wherein the entire needs including financials, business development, compliance and other requirements of the entity if not met by the subsidiary shall be entirely assisted by the parent listed entity. Based on the model, the existing promoters of the subsidiary will continue to helm the affairs of the subsidiary and manage the same with additional board members infused from the parent listed entity.

The participation of the parent entity is structured in such a way that the existing promoters of the subsidiary do not suffer further dilution of their stake, due to any increase in the quantum of help received. Unlike regular M&A, the companys unique model ensures that the promoters of the subsidiaries are always at the helm of affairs and shall continue to drive the operations, focusing on their core competency, utilizing their knowledge, experience and skills. With their share of stake remaining fairly constant, substantial and with the parents impetus, the entrepreneurs realize and surpass their vision, thereby unlocking the true business value.

The company believes in helping through a path with least hassle, predictable outcome, consensus and creating win-win-win situations for all the stakeholders.

Being Socially relevant and responsible:

While doing so, the companys focus would be on socially relevant companies and to promote socially responsible products and services. Most of them would have active on-going CSR initiatives as part of their operations.

Providing an ecosystem to unlock value:

The companys subsidiaries enjoy and share complete trust and transparency in the operations and the company facilitates practicing scalable, sustainable, repeatable and predictable outcome-based processes to unlock the hidden tremendous potential and achieve exponential growth in valuation. The company facilitates and has been successful in creating and maintaining ecosystems where the subsidiaries can procure (raw material and consumables) and supply (their products and services) within the organisation (other subsidiaries), thereby increasing the demand and realizing better value for their products and services.

Through assimilation of knowledge and skills from various MSME companies, the subsidiaries enjoy a centralized and diverse repository of knowledge and have access to take help from all types of capabilities / skills within the organization. Opportunities for cross leveraging capabilities, repurposing their technology value chain and professional growth for individuals are abundant. The subsidiaries enjoy advantages of access to highly skilled centralised business enablers like legal, secretarial, human resources and accounting functions.

Results of the initiatives:

The approach of aggregating business entities, fostering collaboration, and creating an interconnected ecosystem have yielded impressive results, as reflected in the substantial growth in revenue and other financial parameters.

The companys ability to adapt and thrive in the aftermath of implementation of scheme of amalgamation, approved in 2020, speaks on its resilience and strategic foresight. The organic growth of existing business units, coupled with the positive market reception, further highlights the effectiveness of the companys model and approach.

The fact that one of our material subsidiaries, Dindigul Farm Product Limited, had gone through the full cycle of unlocking value, from aggregation in 2022 to realising value through BSE-SME listing recently, is a remarkable achievement and vindicates our faith in our growth model. It also underscores the companys commitment to its mission and growth strategy.

It is clear that the companys efforts in promoting inclusive growth, supporting socially responsible initiatives and creating an ecosystem for MSMEs to thrive, are yielding tangible and impressive results. The positive trend in growth and the potential for continued success are undoubtedly encouraging signs for the companys stakeholders and the broader business community.

The response from the stakeholder community has been remarkable as reflected in the investors readiness to support the companys objectives and the pipeline of organisations which are willing to become our subsidiaries.

As the company continues its journey, it will be exciting to witness moving to the next stage of our journey where we would see action and results in the below three dimensions. inorganic growth through aggregation of entities and organic growth in existing business unlocking value of some of the entities through channels like SME exchanges etc,

BUSSINESS UNITS

The following business units are directly under the management of the company.

A Diet Hospitality service (Food and Hospitality sector)

Biotech Products and services (Biotech Sector)

Helios Solutions (Power electronics Sector)

Based on the growth model of the company, the following are the subsidiaries, step-down subsidiaries and associate companies as on 31-Mar-2024

IBL Healthcare Limited Healthcare Sector (wholly owned subsidiary) o KNISS Laboratories Private Limited (subsidiary of IBL Healthcare Limited) o Healthway India Pvt Ltd (subsidiary of IBL Healthcare Limited) o IBL Laksha Hospitals LLP (subsidiary of IBL Healthcare Limited) o IBL Tiruvannamalai LLP (subsidiary of IBL Healthcare Limited)

Dindigul Farm Product Limited Dairy Sector

Matrix Boilers Pvt Ltd Engineering Sector

HSL Agri Solutions Limited Food and Agro Sector

HSLPrime Properties Private Limited Infrastructure Sector

IBL Social Foundation CSR Activities

IBL Investments Limited Finance & Investments

Based on the proven management expertise and success derived from such aggregations, the company is continuously on the lookout for partnership opportunities with suitable companies in quest of exponential growth in various sectors.

The company has augmented management control of corporate and all its subsidiaries for stabilising / strategizing the growth prospects of the entities and also in the process of adding more.

BUSINESS UNIT-WISE PERFORMANCE

FOOD & HOSPITALITY DIVISION: A-DIET EXPRESS HOSPITALITY SERVICE:

A-Diet Express Hospitality Service Limited was incorporated in August 18, 2005 and was subsequently merged with the company with effect from 01-Apr-2018. This unit is continuing to be one of Indias most reputed

Catering services Company with an average age of top clients of above 6 years, operating across 12 states and 20 cities with 2 central kitchens at Capacity of 50000 meals / day and several more onsite kitchens spread across India. It is an entity engaged in Full range of food supply services on a contract basis to Colleges and Universities, Hospitals and Healthcare Institutions, Corporate Offices, Industries, IT and ITES Companies.

BIOTECH DIVISION:

The company is actively marketing and selling Microorganisms based Bio fertilizers, Bio pest controllers, Bio Fortified Vermi compost and Bio Fortified Coirpith to farmers across India.

Products such as Pseudomonas, Beauveria Bassiana, Metarhizium, Potash Mobiliser, Tricoderma Viride, Verticillium Lecanii, Humic acid, Bio fortified Coirpith compost, Bio fortified Vermicompost, MN Mixture, NP Virus, VAM are sold in the market.

HELIOS SOLUTIONS ENGINEERING SECTOR:

Helios Solution Limited (Helios) was founded in 1995 (Now merged with the company) actively deploying cutting-edge solutions towards design, development, manufacture, maintenance & services in Power Electronics with a proven track record of over two decades and a loyal customer base. This unit manufactures, sells and services customised power electronics products for large industries and institutions across the globe. It has a product range of FCBC, Battery Charger, Modular, Industrial and commercial On-line UPS System, Industrial Inverters, AC / DC Power Supplies, DC-DC Converters, Servo Controlled Voltage Stabilizer, and Special purpose Machines (SPM)

DINDIGUL FARM PRODUCT DAIRY SECTOR

Dindigul Farm Product Limited was aggregated as a subsidiary of IBL during 2022-23. It was a private limited company at that time and became a public limited company in FY 2023-34. IBL has supported the operations for the working capital needs to operate the plant to its full capacity. Significant revenue of the company comes from this division and is a material subsidiary of the company.

Dindigul Dairy Farm has a state-of-the-art infrastructure near Dindigul, Tamil Nadu, to manufacture milk protein-based products like casein and whey protein, manufacturing them, under the brand EnNutrica, to the European and American standards. The products are sold under the brand EnNutrica directly to bulk customers within India and abroad, thereby getting some part of revenues in foreign exchange to the company.

Significant investments are done to develop sourcing of milk directly from the farmers. As of now, around 50,000 Liters of milk per day is procured directly from the farmers and the rest of the needs are sourced through bulk suppliers. The company will continue to invest in developing the sourcing network. It is to be noted that the farmers are paid digitally and directly within a few days of milk procurement thereby ensuring seamless, sure and fast payments to the farmers.

This company also sources significant part of the energy through alternate clean energy sources through investments in infrastructure and procurement through PPAs.

Dindigul Farm Product Limited went through process of unlocking and realizing value through SME IPO in BSE and is now a listed entity in BSE SME board.

MATRIX BOILERS ENGINEERING SECTOR

Matrix Boilers Private Limited is an engineering company aggregated in 2022-23. This company became a subsidiary of IBL has been supported in revival of the operations as well as working capital needs for the orders procured. The products are now supplied under the brand "IBL MATRIX"

Matrix Boilers has the capability and the license to manufacture industrial boilers upto a capacity of 25 TPH as per IBR regulations. Matrix Boilers also manufactures all the accessories required for large boilers or process plants and has the capability to do any fabrication work. The company holds a patent in the design of energy efficient hybrid boilers which can use multiple fuels for generation of steam.

Matrix Boilers has become an empanelled vendor for southern railway and is supplying boilers, boiler shells and containers for transportation of diesel, petrol, crude oil and other liquid products.

IBL HEALTHCARE LIMITED:

A wholly owned subsidiary and Healthcare division of the company was incorporated on October 30, 2020. The Company is progressing with its growth through Partnership and Acquisitions and in the process of identifying and partnering with several prospective companies / clinics / hospitals. The Healthcare sector specializes in single speciality clinics / Hospitals which includes outsourced single speciality departments within multi-speciality hospitals.

This division has the following units under operations

IBL Eyecare clinic at Tiruvannamalai

Nalam Multispeciality Dental Clinic at Chennai

Lafuse Hair and Skin Clinic at Chennai

IBL Healthcare has also forayed into Pharma business with the aggregation of Healthway India Private Limited, which is a Pharma marketing company. In FY 2023-24, Kniss Laboratories Private Limited, in the business of Pharma manufacturing, has been aggregated by the company.

HSL AGRI AGRO SECTOR:

Agro Sector backward integration with A-Diet Division and forward integration with Biotech division

This division is doing farming activities in around 100 Acres of land (partially owned by the company and partially leased out). The products and services of Biotech division is utilized to produce organic vegetables, fruits and other grocery needs based on plan given by A-Diet unit. All the produce is utilized by the A-Diet unit for supply of food to industries and other establishments.

This unit also provides complete procurement services for the A Diet business by procuring groceries, vegetables and other needs of A-Diet unit in bulk at lower cost and trading surplus stock to other needy businesses in and around Chennai. This approach has given tremendous operational convenience and cost advantage to the A-Diet business.

Very recently, on 17-May-2024, this unit has aggregated Dilasa Agro Processors Private Limited, a Food Processing unit in Aurangabad, and this unit will eventually become a wholly owned subsidiary of HSL Agri Solutions Limited.

HSL PRIME PROPERTIES - INFRASTRUCTURE SECTOR:

HSL Prime Properties is a subsidiary of Indrayani Biotech Limited, founded in 2017 with an objective to venture into real estate and infrastructure development.

All the approval related formalities for Desavani Towers, a 4-storey commercial class A building with 44,000 Sq. ft of IT cum office space at Guindy, Chennai has been complete and the construction of the building will start this year

IBL INVESTMENTS FINANCE SECTOR

IBL Investments Limited was incorporated during 2022-23 to enable management of finances between IBL and its subsidiaries. IBL Investments is also planning to venture into Alternative Investment Funds in the near future for better management of finances.

IBL SOCIAL FOUNDATION Section 8 company for CSR activities

IBL Social Foundation was incorporated as a section 8 company in FY 2022-23 to take care of CSR activities for IBL and its subsidiaries. With this subsidiary, we put our venture forward by doing activities which are mentioned below.

1. Providing free food packets to the needy

2. Conducting Training programmes for Women & Students

3. Blood Donation, Free Eye Check-up and Dental check-up camps.

To start with, the primary focus of the foundation is on serving the villages and urban slums in the state of Tamil Nadu, where access to basic education, healthcare and other services is often limited. The foundation provides free eye camps and cataract operations to support those in need, and the commitment to delivering effective healthcare solutions is a testament to our dedication to the community.

Overall, our goal is to contribute to the sustainable development of the communities we serve, improve the lives of underprivileged people, and promote a better future for all.

FUTURE OUTLOOK

Most of the activities which were laid out as part of the future outlook in our last annual report has been executed successfully.

1. Unlocking value of Dindigul Farm Product Limited is completed and the company is now a listed organisation in BSE SME board. This is a vindication of our faith in our philosophy. We are now looking at capacity expansion in this division.

The Company is looking at three-pronged strategy for future growth in FY 2024-25.

1. Organic growth in existing businesses

2. Inorganic growth through aggregations

3. Unlocking value of certain identified successful subsidiaries which were aggregated earlier.

Organic Growth

A Diet has started a Central Kitchen for Food Business at Chennai during FY 23-24. The campus is situated at a vantage point on the Bangalore-Chennai Highway at Poonamallee. The location is taken on lease and a huge central kitchen is built using state of the art energy efficient equipment which will enable touch free cooking. All the associated infrastructure are also integrated in the same complex to enable self-sufficiency. A huge business potential shall be tapped to achieve significant increase in the revenue of the food business using this Infrastructure.

Capacity expansion is expected in our dairy division Dindigul Farm Product Limited, which will enable sourcing of entire milk requirement from the farmers directly. Technology investment has been made to enable digital and direct payments to the farmers which in-turn shall enable seamless procurement process and better relations with the farmer community. The company will also get significant cost advantage which in-turn will result in better margins.

Significant revenue increase is expected from IBL Healthcare Limited through the following 2 step down subsidiaries which have huge untapped potential.

o KNISS Laboratories Private Limited (subsidiary of IBL Healthcare Limited) o Healthway India Pvt Ltd (subsidiary of IBL Healthcare Limited)

From our Biotech division, a huge increase in revenue is expected through supply of Bio fertilizers for papaya farms in Tamil Nadu and Maharashtra.

HSL Agri Solutions shall venture into management of papaya farms for its yield of fruits and papain enzyme. HSL Agri shall also turnaround the operations of its new subsidiary Dilasa Agro Processors Private Limited.

The Boiler division is poised to get huge supply orders from southern railway and process plants all over India. These are expected to result in huge jump in the turnover of our boiler division in FY 2024-25.

The CSR arm of IBL, IBL Social Foundation, has seen huge demands from the society towards quality CSR activities. The Foundation is planning to start servicing CSR requirements from large corporates to augment and meet the needs of the society. In addition to the current set of initiatives, additional offerings are planned in the area of

1. Enabling farmers in generating community compost for usage in fields using the technology provided by our biotech unit.

2. Education platform for students from rural area to enable them get qualified with diploma in vermicompost production and diploma in agricultural practices.

Inorganic growth through aggregations:

Several prospective MSME units are under consideration for potential aggregation based on the interest shown by the MSMEs to partner with us and the untapped potential held by them. Formal due diligence is under progress for these units and we expect a few large units to get aggregated in the FY 2024-25.

Unlocking value of certain identified successful subsidiaries

IBL, as per our philosophy, is in the continuous process of identifying businesses suitable for unlocking value. As part of this, some of the existing subsidiaries, which have demonstrated huge increase in value, shall be lined up for unlocking value using channels like SME exchanges etc. This will be in line with our experience in the BSE listing of Dindigul Farm Product Limited.

Summary

Based on the above plan and the past performance, the company is confident of continuing the same growth trajectory, if not, better it, in the near future.

GOVERNANCE

RISKS AND CONCERNS:

Risks and opportunities are inevitable and inseparable components of all businesses. The Companys performance primarily depends on the performance of the market which has several growth levers viz., economic growth rate, infrastructure development, growth in individual segments where the company has presence or plans to grow. However, the Board of Directors identifies and periodically reviews the various elements of risk which the company faces and lays out the procedures and measures for mitigating those risks.

The main concern is availability of funds for capital investments on infrastructure and working capital for various divisions of the company. The company is liaising with funders who can invest in the company divisions and also deliberating plans to issue preferential shares and / or to go for a follow-on IPO in the near future to take care of funding requirements for growth.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Periodical reviews are being carried out resulting in identification of deficiencies and formulation of time bound action plans to improve efficiency in the internal control systems. The adequacy and effectiveness of the internal control systems is also being periodically reviewed by the Audit Committee of the company. The Company has internal control policies and procedures commensurate with its size and the nature of its business.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The financial performance of the company during the Financial Year 2023-24 has been discussed in the Directors Report and the audited financial statements, which has been prepared in accordance with the requirement of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, which discloses a true and fair view of the performance of the company during the said period.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

The company fosters a positive and collaborative relationship with both its employees and other stakeholders. It has diligently adopted all required safety protocols, including measures such as physical distancing, sanitization, fumigation, and compliance with health and safety guidelines set forth by governmental authorities. Regular external audits are conducted to identify areas of improvement in these safety measures.

The company is dedicated to empowering its workforce by enhancing their knowledge, fostering teamwork, and cultivating a strong sense of job ownership. Through job training, seminars, and managerial programs, the company equips its employees at various levels with the necessary skills and technical expertise. As of March 31, 2024, the employee count stands at 1112.

There are no employees who are in receipt of remuneration in excess of the prescribed limits for the whole Financial Year 2023-24 or a part thereof during the year.

COMMENTS ON FINANCIAL RATIOS:

Considering that the company continuously invests in aggregation of subsidiaries and supports them in boosting their performance to their full capacity, significant finance is required for this purpose. The funding for this purpose is arranged either through debt or some part of internal accruals is utilized for this purpose. So, you will see that the quantum of finance costs to be increasing and as a result the profit margins of the overall business may show a lower level. However, the management takes a balanced view in such decisions and the impact has been controlled and maintained at minimal levels. Key financial ratios are covered in the section covering "Notes to the financial statements" as part of this report, to certain extent.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The organization has implemented a policy aimed at preventing sexual harassment of women in the workplace, in accordance with the guidelines outlined in the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) PoSH Act of 2013. As part of this initiative, an internal committee has been established to effectively address any complaints that may arise. This policy extends its coverage to all types of employees, including permanent, contractual, temporary, and trainees. The established committee is fully operational and dedicated to addressing employee grievances. It is noteworthy that no complaints were reported from any individual or employee throughout the Fiscal Year 2023-24.

CORPORATE GOVERNANCE:

A report on corporate governance along with Management Discussion & Analysis Report (M & DA) as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given as separate chapters as part of this report. The company has complied with the conditions relating to corporate governance as stipulated in clause C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

AUDIT COMMITTEE:

Audit committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The particulars relating to the composition, meetings and functions of the committee has been disclosed in the Report on

Corporate Governance under the head, ‘Audit committee. The Board has accepted the Audit committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit committee by Board.

WHISTLE BLOWER POLICY:

The company has established a whistleblower protocol designed to address instances of unethical or inappropriate conduct, as well as any breaches of the companys code of business conduct. This protocol also covers grievances related to accounting, auditing, internal controls, and disclosure practices. This mechanism provides an avenue for whistleblowers to report concerns about the aforementioned matters directly to the chairman of the audit committee.

The policy operates on the principle that the whistleblower is not required to substantiate the accuracy of an accusation. Rather, the whistleblowers goal is to illustrate that there are valid reasons for apprehension, and the intent is not to harm any individual through malicious intent. The audit committee undertakes a quarterly review during its meetings to assess, address, contest, withdraw, or dismiss any complaints that have been received.

CAUTIONARY STATEMENT:

Statements in this report, especially those relating to MD&A giving details of companys objectives, projections, estimates and expectations may be construed as "forward looking statements" within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied

ACKNOWLEDGEMENT:

The Directors thank the companys customers, vendors, investors, business associates and bankers for their support to the company. The Directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the Company.

By the order of the Board of Directors
For Indrayani Biotech Limited
Sd/-	Sd/-
Kasiraman Sayee Sundar	Swaminathan
Managing Director	Whole-time Director
DIN: 01295584	DIN: 02481041
Date: July 27, 2024