M K Proteins Ltd Management Discussions

We have witnessed significant progress in terms of market penetration and brand recognition in the past. Our commitment to quality and continuous improvement has helped us gain customer trust and loyalty. Looking ahead, we aim to expand our distribution network, explore new product categories, and invest in technology to enhance productivity and sustainability.

The Indian economy has displayed resilience amidst global uncertainties and internal challenges. The governments focus on infrastructure development, ease of doing business, and reforms in the agricultural sector has positively impacted our industry. However, macroeconomic factors such as inflation, exchange rate fluctuations, and policy changes need to be closely monitored.

The Indian economy is one of the fastest-growing economies globally, with a significant consumer base and a robust demand for edible oils. The countrys edible oil industry plays a vital role in both domestic consumption and export markets. India is the worlds largest importer of edible oils, primarily due to insufficient domestic production to meet growing consumer demand. However, the sector faces challenges such as fluctuating prices, supply chain complexities, and dependence on imports for meeting domestic requirements. The Indian government has implemented various policies and initiatives to boost domestic production, reduce reliance on imports, and promote self-sufficiency in edible oil production. Key factors influencing the edible oil industry in India include population growth, rising per capita incomes, urbanization, changing dietary preferences, and government policies. The governments focus on improving agricultural productivity, promoting oilseed cultivation, and enhancing processing and refining capabilities are creating opportunities for growth within the sector.

Throughout FY 2025, India has maintained its position as the fastest growing major economy amid global headwinds. It has also emerged as an alternative to China and garnered the attention of foreign companies, who are seeking an alternative manufacturing hub outside China. The domestic economy is further being buoyed by a robust financial system that is supporting its growth dynamics.

Further, easing supply side constraints, coupled with the governments consistent emphasis on capital expenditure have facilitated economic growth. A surge in investments in the public sector and a strong banking sector has also contributed to gradual economic expansion over the years.

The global edible oil industry is influenced by various factors, including international trade policies, global commodity prices, consumer trends, and the competitive landscape. Edible oils are widely consumed across the world and play a crucial role in various cuisines, food processing, and industrial applications.

Major producers of edible oils on a global scale include India, China, the European Union, the United States, Indonesia, and Malaysia. Global demand for edible oils is expected to rise steadily due to population growth, increasing disposable incomes, changing dietary habits, and urbanization.

The global edible oil industry has witnessed several developments in recent years. These include advancements in refining technologies, increasing focus on sustainability and environmental concerns, emergence of healthier and premium oil variants, and shifts in consumer preferences towards non-genetically modified organisms (GMO) and organic products.

Additionally, international trade plays a significant role in the edible oil industry, with countries engaging in exports and imports to bridge supply-demand gaps. Trade policies, tariff structures, and regional free trade agreements impact the global trade dynamics of edible oils.

Considering the dynamic nature of the global economic environment and its influence on the edible oil industry, it is crucial for companies in the Indian edible oil sector to monitor and analyze global economic trends, trade policies, and competitive dynamics to make informed business decisions and remain competitive in both domestic and international markets. Fluctuating price of raw material is one of the major challenges in the market. The fluctuation in the price is due to various reasons such as environmental factors, crop diseases, and others. A fluctuation in the price of raw materials may have an adverse impact on the growth of the market during the forecast period. However, the deficit between production and consumption of edible oils is increasing rapidly, even after importing millions of tons of oil creating more

demand for the edible oil.

Overall, while the Indian edible oil industry has numerous opportunities, it also faces threats in terms of competition from imports, availability of raw materials, government policies, and health-related concerns. However, with proper strategic planning and a focus on innovation, the industry can overcome these threats and capitalize on the growing market potential.

In our edible oil business, majority of raw material comes from imports. Geo-political events can cause supply disruptions, exporting countries government can put restrictions on exports. Weather conditions can result in reduction of crop production.

Other operational factors include operating efficiency, product diversity, market position, and ability to secure raw material as well as the commodity price and forex-risk management systems. Risk financial position and returns metrics, capital structure, ability to generate positive cash flows from operations and the adequacy of the same in relation to its contractual debt service obligations.

There can be increase in taxes on import of crude edible oil. There can be restriction on the quantity that any Company can import. This can put a large Company like us at a disadvantage compared to our competitors.

Your Company is exposed to commodity price fluctuations in its business the edible oil prices in India are directly correlated to international oil price movements and currency movements that make profitability vulnerable to unexpected fluctuations.

Risks are an integral part of any business environment and it is essential that we create structures and processes that are capable of identifying and effectively mitigating them. For us, the risks are multi-dimensional and therefore we look at it in a holistic manner, straddling both, the external environment and the internal processes. These risks can be broadly classified into following categories: Strategic Risk, Compliance and Governance Risk, Financial Risk, Environmental Risk, Operational Risk and Social Risk.

Further, Key risks for the edible oils sector include risks from change in import-export regulations; change in the minimum support price (MSP) on oilseeds offered by the government; high dependence on monsoons and finally, the risk arising out of exchange rate fluctuations. Procurement of oilseeds at the right price and quantity, optimum utilization of

processing units, their strategic location, a strong brand name and diversification of product offerings are likely to be the key success determinants for players.

Increase in the number of competing brands in the marketplace, counter campaigning and aggressive pricing by competitors have the potential to create a disruption.

Changing consumer preference and Demand can be adversely affected due to shift in consumer preferences, especially those induced by the pandemic. Given the potential of social media, the speed of such a shift could be unparalleled.

The key determinants of business risk profile of the company are their ability to overcome the regulatory risk and agroclimatic conditions. Other operational factors include operating efficiency, product diversity, market position, and ability to secure raw material as well as the commodity price.

The profitability of edible oil companies is significantly influenced by regulatory changes and remains highly susceptible to the changes in the duty differential between import duties on crude and refined oil by the Government of India (GOI).

Also, the profitability of these companies depends on the changes in the export tax levied by exporting countries, mainly Indonesia and Malaysia (that account for most of palm oil imports).

The financial statements have been prepared in compliance with the requirement of the Companies Act, 2013 and Indian Accounting Standards of India (Ind AS). During the year under review, the company reported profit of Rs. 11,45,10,060.77 before tax adjustments as compared to profit of Rs. 15,46,96,663.28 before tax adjustment in the previous year.

Profit after tax (PAT) registered a decline of 25%.

The company does not have any other segments.

[Pursuant to Schedule V (B) to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015]:

The Company has established internal control systems for ensuring optimum use of resources and safeguarding the assets. The Internal Control Systems and procedure are adequate and commensurate with the size of the Company.

The Company recognizes the importance and contribution of its human resources for its growth and development and is committed to the development of its people.

The Company considers its employees to be the most valuable asset and is committed to provide a conducive work environment to enable each individual to fully realize his or her potential. The human resource programmes focus on strengthening key areas of Enhancing individual and organization readiness for future challenges. Management is investing in enhancing technical and managerial skills of employees for building competencies needed for growth plans. Our business review & performance improvement process continues to put focus on performance and periodic review of each of our businesses and individuals.

The Company has cordial relations with employees and staff. There were no industrial relations problems during the year and the Company does not anticipate any material problems on this count in the current year.

The Company had 50 employees as on March 31, 2025.

For M K Proteins Limited

Sd/-

Parmod Kumar Managing Director (DIN:00126965)