Kings Infra Ventures Ltd Management Discussions.

INDUSTRY OVERVIEW

India is the largest producer of farmed shrimps in the world and accounts for nearly 6% of the global fish production.During 2018-19, India exported seafood worth $6.72 billion with a volume of 13.92 lakh tonne. During 2019, India accounted for 282,584 tonne of shrimps from the total US import of 698,445 tonne.

COVID-19 and consequential lockdown had shown an adverse impact on the Indian aquaculture industry in production as well as the post-harvest value chain on account of slowdown of cargo movements, reduced and delayed payments, cancellation of several orders, difficulty in getting new orders and renewal of existing orders.During the initial period of lockdown, there was 30-40% reduced stocking but the timely support given by Central and State Government has ensured the smooth functioning of seafood export sector.

The current trend in shrimp production and exports is encouraging. There is a 25% year- on-year rise in US shrimp import from India for the month of April, 2020. This growth can be sustained inspite of the minor setbacks suffered on account of the pandemic. India is the third largest player in the Chinese market after Russia and Ecuador, so there is a great potential for further expanding the market share.

Domestic consumption has witnessed a strong growth in India over the last few years. The factors currently driving the domestic consumption include life style changes, people moving away from red meat and poultry. Seafood is considered much more healthy and nutritious, which helps in building immunity. The demand is specially for sustainably produced and marketed products with complete traceability.

The Government of India has recently initiated several measures to promote and boost aquaculture industry in India. The major initiatives of the Government include Blue Revolution 2.0; Neel Kranti Mission; Pradhan Mantri Matsya Sampada Yojana and initiative MGNREGA

The Government is moving proactively to support the Aquaculture industry and has declared Aquaculture and exports as an essential services industry. As a part of the efforts to support our industry, the Government of India, in May 2020 announced a Rs.20,000 crore package through the PMMSY scheme.

The lockdown has resulted in various infrastructure project sites staring at closure mainly due to the effect of the labor movement as a result of the lockdown and also due to supply chain disruptions. The fiscal situation in the construction sector for both the Central and States is already worsening and continued funding of infrastructure capital expenditure will be a challenge in the near future. Additionally, all these problems will be further aggravated by the relief packages that are being rolled out by many States to support the loss of income caused by the lockdowns. This may further stress the Governments ability

to spend on the infrastructure over the next one or two years, thus dampening the construction and the infrastructure segment.

OUR BUSINESS An Overview

The Company is one the pioneers in the seafood and aquaculture business in the country. The Company was the first in the country to introduce Japanese Technology for scientific fish farming. The Company has its export business spread across highly regulated markets like Japan, China, EU and the US.

Kings Infra, the architects of Blue Revolution 1.0 (1987-1997) has taken the lead in Blue Revolution 2.0 by providing technological edge for disrupting the countrys aquaculture landscape to make it more sustainable aligned with the Sustaiable Developmnt Goals 2030.

Kings Infra hasa vast network of experts combined with a young and vibrant professional team which can take our business beyond the Seafood and Aquaculture into Infrastructure Development (predominantly for aquaculture), digital transformation, farm automation, commercialization of research and technology extension.

STRENGTHS, WEAKNESS, OPPORTUNITIES AND THREATS

The growth of the Company is subject to opportunities and threats as are applicable to the industry from time to time. The Company foresees the opportunity in the domestic marketing, value added products, infrastructure development as well as research and development in seafood and aquaculture business.

Kings Infra-Strengths

Sustainable aquaculture is the way forward for the country to establish itself as a global leader in the world thatemergesout of this pandemic. The Company is fully focused on sustainability and traceability in Aquaculture production and is a technology leader in this space.

The Company has come out with a new technology driven business model, equipping farmers for a sustainable aquaculture production.Geographical conditions which are favorable for the indigenously developed technology will also help in boosting the countrys fish production and its presence in the overseas markets for marine products.The Company intends to create sustainable products without using antibiotics or chemicals which will leave any harmful residue posing a threat to human health and wellbeing. The Companys homegrown technologies will help millions of farmers, making inroads into markets in the East and West alike.As a pioneer in this industry, the Company focuses on bringing the technological innovations that could benefit the whole industry, and lead to improving the standard of living of the farmers.

The Company is on track for an exponential growth in its various vertical and leadership position through introducing innovation and introduction of new technologies in the sector to overcome the adverse impact of the Covid-19 pandemic.The FY20-21 looks quite promising for the Company as the Company works out strategies, extends our foot prints into new markets, introduces new technologies and forge exciting partnerships with global

leaders. The Company has made arrangements to start its domestic vertical with a B2B platform King Fresh.

The Company has well balanced Board with varied experience and expertise. With qualified and experienced management team, employees, associates and excellent network of contacts to enable execution of activities efficiently and effectively, the Company can outperform other market players in the segment.

Kings Infra-Weakness

Aquaculture and infrastructure business is mainly concerned about inadequate supply of power, water, availability of skilled workers, non-availability of various clearances, regulatory uncertainty and lack of clear policies. Similarly unanticipated project escalation costs due to the above mentioned hurdles also hamper the growth in profitability.

Kings Infra-Opportunities

The Country is bestowed with varied and huge potential resources in the form of rivers and canals (1.95 lakh km); floodplain lakes (7.98 lakh hectare); ponds and tanks (24.33 lakh hectare); reservoirs (31.50 lakh hectare) and brackish water (14.10 lakh hectare). In addition, the marine fisheries activities spread along the countrys long coastline of 8118 km with an EEZ of 2.02 million square km. Indias geographical conditions are best suited for the growth of aquaculture and seafood industries. The considerable improvement in the export of Vannamei, Cuttle fish is also noticeable.

In the domestic market also, demand for packaged and frozen products has spiked as households look to stock up on non-perishable food at the expense of fresh seafood options. At the same time, online distributors are reporting increased interest as home- bound consumers explore retail alternatives.

The economic package announced by the centre to rejuvenate the industry through Pradhan MantriMatsyaSampadaYojana (PMMSY) has helped to boost the aquaculture sector and also the related infrastructure sector for creating fishing harbours, cold chains and markets.

Kings Infra-Threats

Volatile global political and economic scenario may adversely affect the revenue growth opportunities. The availability of skilled labor and logistics for proper functioning of the industry remains a key challenge across different segments of the industry.

Your Companyhas put in place appropriate measures for its mitigation including business portfolio risk, financial risk, legal risk and internal process risk. Major risk includes chances of viral diseases, general economic conditions, climatic conditions, supply chain disruptions foreign exchange fluctuations and other political risks.

OUTLOOK

Aquaculture today is one of the fastest growing segments of the food sector. Despite the current downswing in the global economies in wake of the COVID 19 crisis, it is pertinent to note the soaring demand for seafood in the international and domestic markets. However, the economic uncertainty created by COVID-19 may have some impact in the

export markets. The Company has formulated Strategy for Sustainable Growth to minimize the impact of the unprecedented situation.

Kings Infra-Strategy for Sustainable Growth

The Company is closely monitoring the developments and possible effects that may result from the current pandemic on itsoperations, financial condition, liquidity and is actively working to minimize the impact of this unprecedented situation by reworking strategies to adapt to the situation.

Taking all these into consideration, your Company is implementing the following strategies for the successful post COVID operations :

Farming Operations:

• To take lead in the Blue Revolution 2.0 by providing Aquaculture the technological edge to make shrimp farming more sustainable, aligned with the Sustaiable Development Goals 2030.

• The Company is continuing its innovation in the aquaculture sector by opening up new frontiers in technology including the following:

• Open field circulating aquaculture systems

• Organic sustainable bio secure aquaculture practices including Biofloc and aqua mimicry

• Multi tropic Multi species, Farming technology

• Farm automation and integration of traditional farms to produce ideal conditions for growth and productivity and reduce grow-out time period.

• Precision shrimp farming with the objective of utilizing Information and Communication Technologies (lCT) such as Internet of Things (loT), network, sensors and Artificial Intelligence (AI) to improve the farming key performance indicators (KPIs) such as density, survivability and Feed Conversion Ratio (FCR) to achieve ideal environment for growth of shrimps.

• Entering into tie ups with worlds leading companies to ensure that our sustainable, traceable and quality certified products are channelized in the global market.

• Creating an ecosystem empowering the farmers, training them with advanced aquaculture techniques and updating them with the dynamics of the destination market.

• Implementing a well chalked out Skill Development program for Employees, Entrepreneurs, Farmers and Fishermen by setting up the Baby John Centre of Excellence in Aquaculture and Sea Food Exports

Processing Centre:

The Company intends to increase its processing by setting up a modern IQF freezing and allied facilities for value added processing with a special focus on the US market.

Marketing Export Market:

In view of the Covid-19 pandemic which has severely affected the countries across the world, we are reworking the strategies for our export markets. It has been decided to focus and develop the Japanese, Middle East and European Union markets and divert at least 50% of the current supplies from the Chinese market. It is noteworthy to mention here that we have already received valuable orders from the Japanese and Middle East markets.

Even though US is the biggest market, we propose to first stabilize our exports to the Japanese, ME and EU markets before entering the US market.

Domestic Market:

In the post Covid-19 scenario, referral sales are down, but home consumption has increased considerably, bringing about more demand for retail products. Kings Infra now proposes to enter the Domestic Market as there exists a big opportunity to develop this segment for premium quality seafood in institutional packs as well as retail packs both for Institutional customers as well as retail customers.

Discussions have already been initiated with a premier online distribution Company in Bangalore for marketing our products online. This Company has an extensive reach to the major cities in the South, North and West of India.

• Food retail

With domestic consumption of fish rising, there is a rapidly growing demand in India for fish and fish products at affordable prices. Domestic prices are significantly higher than export prices, especially in landlocked cities like Bangalore, Hyderabad and Pune markets.

The growing demand for quality fish and fish products in India is proposed to be addressed by developing a robust cold chain supply chain that can deliver sustainably farmed / sourced, hygienically processed and packed frozen fish and ready-to-cookfish products in both B2B and B2C segments.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control mechanism of the Company is well documented and implemented through a system of checks and balances. The Company has appointed internal auditors to monitor and assess the adequacy and effectiveness of the internal control system. The Company has business plans which are reviewed every quarter. The systems and procedures are being reviewed constantly to strengthen the internal control.

FINANCIAL PERFORMANCE

An overview of the financial performance is given in the Directors Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems.

HUMAN RESOURCES

The ability to attract, motivate, develop and retain talent is critical to the success of the Company. The Management has been paying special attention to various aspects like training, welfare and safety and thereby further strengthening the human resources. The Management focuses on hiring right talents required by the business at right time which will help building a result oriented culture within the organisation. The Company is committed to taking every possible effort to ensure the safety of employees and their families The Company has devised all the safety measures prescribed by the Government in all the workplaces and has enabled work from home facility for the employees.

DISCLOSURES

During the year the Company has not entered into any transaction of material nature with its promoters, the Directors or the Management, their subsidiaries or relatives etc that may have potential conflict with the interest of the Company at large.

DISCLAIMER

Certain statements included above may be forward looking and would involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward looking statements.

The Company assumes no responsibility in respect of forward looking statements which may be amended or modified in future.

For and on behalf of the Board of Directors
Sd/-
Shaji Baby John
Kochi Chairman & Managing Director
DIN: 01018603
07.09.2020