Integrated Industries Ltd Management Discussions

ECONOMIC / INDUSTRY OVERVIEW

Overview In ation reached decade highs at the beginning of FY 2023 due to geopolitical uncertainties. How- ever, since the second half of the year, in ation has been moderating, indicating a positive outlook. The global economy appears to be on track for a slow yet steady recovery from COVID-induced challenges and the Russia-Ukraine war. Global economic output is likely to grow gradually, owing to a stabilizing in ation trajectory that is reviving consumer sentiment and investor con dence. Emerging market and developing economies (EMDEs) are also witnessing growth across multiple sectors, fueled by government expenditures in infrastructure and manufacturing sectors.

Central banks monetary policies are expected to bear fruit, leading to a decline in global in ation from *8.7% in 2022 (among the highest in decades) to 7.0% in 2023 to 4.9% in 2024. It is anticipated that the pent-up demand in numerous economies, along with a considerable reduction in in ation, will drive economic growth in 2023. The Federal Reserve raised its benchmark interest rate to their highest in 15 year. *Source: IMF World Economic Outlook, April 2023.

INDIAN ECONOMY:

Overview: Despite resilience amid slowing global growth, there are headwinds to Indias growth in F.Y. 23-24. Recent financial sector turmoil in the US and Europe could reduce appetite for emerging market assets, trigger another bout of capital ight and put pressure on the Indian rupee. Tighter global financial conditions could also weigh on the risk appetite for private investment in India. Notwithstanding external pressures, Indian banks are well capitalized, and the impact of policy tightening on bank balance sheets has been less severe in India due to the relatively modest pace of tightening. Moreover, faster-than-expected in ation due to higher food or fuel prices may also weigh on domestic demand. These downside risks to growth could affect scal consolidation plans. The debt path is highly sensitive to variation in nominal growth rates and further moderation in economic growth could lead to an increase in the already high public debt-to-GDP ratio.

UNION BUDGET FY 2023-24:

The Budget 2022-23 sought to lay the foundation for the future of the Indian economy through projects like PM Gati Shakti, Inclusive Development, Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition and Climate Action, as well as Financing of Investments.

The capital expenditure of the Indian government expanded 35.4% from Rs. 5.54 lakh crore to Rs. 7.50 lakh crore. An outlay of Rs. 5.25 lakh crore was made to the Ministry of Defence (13.31% of the total Budget outlay). An announcement of nearly Rs.20,000 crore was made for the PM Gati Shakti National Master Plan to catalyse the infrastructure sector. An expansion of 25,000 km was initiated for the national highways network. An allocation of Rs. 2.37 lakh crore was made towards the procurement of wheat and paddy under the MSP safety net. An outlay of Rs.1.97 lakh crore was announced for Production Linked Incentive schemes across 13 sectors.

FISCAL YEAR 2023 AND OUTLOOK

The Companys main revenue comes from Trading of Food items etc. During the scal year ended 31st

March 2024, your Company has achieved a total net sale of Rs. 56.16 crore and Profit after tax of Rs. 0.88 crore. The Company has achieved progressing EBITDA of Rs. 1.71 crore in the FY 23-24 in comparison to EBITDA of Rs. 4.99 crore in FY22-23.

BUSINESS STRATEGY

Going forward our business strategy will focus on enhancing customer experience, expanding your market reach, and optimizing your product offerings which will help us to put in place a proper framework to give us the best chance to grow in the face of challenges from the competition and external events over which we may have no control.

Your Company will invest in putting in place the right structure that ensures precise execution, the investment may vary from say putting in place a business development team or resources. We feel that it essential for the company to adjust, pivot and transform in order to best respond to emerging opportunities and challenges. We are con dent that with the team we have in place we are on track to achieve our growth objectives.

We derive our strengths from following factors:

1. Skilled and Experienced Management

2. Product Quality and Variety

3. Branding and Reputation

4. Innovation and Adaptability

5. Strategic Location and Accessibility

6. Competitive Pricing

Emerging Opportunities:

1. Indias strong consumption fundamentals

2. Health and Wellness Segment

3. Artisanal and Gourmet Products

Threats:

1. Intense Competition

2. Changing Consumer Preferences.

KEY RISKS AND CONCERNS

The Company is exposed to business risks which may be internal as well as external and the growth of our Industries is linked to the overall economic growth. Primary risk to the business will be on account of adverse changes to the economy. Volatility in raw material prices is the other significant risk.

FINANCIAL AND OPERATIONAL PERFORMANCE

The key standalone financial are as under:

(Rs. in Cr.)

DISCLOSURE OF KEY CHANGES IN FINANCIAL INDICATORS - KEY FINANCIAL RATIOS:

INTERNAL CONTROL SYSTEMS AND ADEQUACY

Your Companys Internal Control Systems are commensurate with the nature, size and complexity of its business and ensure proper safeguarding of assets, maintaining proper accounting records and providing reliable financial information.

The Directors have laid down internal financial controls to be followed by the Company and such policies and procedures have been adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Some Key Features of the Companys internal controls system are:

The Company uses Tally ERP 9 Accounting package to record data for accounting, consolidation and management information purposes and connects to different locations for efficient exchange of information.

Preparation & monitoring of Annual Budgets through monthly review for all operating & service functions.

Adequate documentation of Policies & Guidelines.

The Company has a well-defined delegation of power with authority limits for approving revenue & capex expenditure which is reviewed and suitably amended on an annual basis.

The Company has a compliance management system.

Internal Audit is carried out in accordance with auditing standards to review design effectiveness of internal control system & procedures to manage risks, operation of monitoring control, compliance with relevant policies & procedure and recommend improvement in processes and procedure.

The Audit Committee of the Board of Directors regularly reviews execution of Audit Plan, the adequacy & effectiveness of internal audit systems, and monitors implementation of internal audit recommendations including those relating to strengthening of companys risk management policies & systems. Internal Audit provides assurance on functioning and quality of internal controls along with adequacy and effectiveness through periodic reporting.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The industrial relations remained cordial throughout the year and we believe that our employees are key contributors to our business success. We focus on attracting and retaining the best possible talent. Our company looks for specific skill-sets, interests and background that would be an asset for our business. Our business model comprises of senior level executives, professionals, experienced, qualified and semi qualified personnel. The Company continued to make significant progress on strengthening HR Processes and

Practices to build organization for current as well as future sustainability during the year.

Our Company work processes and skilled/ semi-skilled/ unskilled resources together with our strong management team have enabled us to successfully implement our growth plans.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Companys operations include raw material availability and prices, pricing in the Companys principal markets, competitive actions, changes in Government regulations, tax regimes, economic developments in India and in countries in which the Company conducts business and other incidental factors.