Manorama Industries Ltd Management Discussions

Global Economy

The global GDP growth, estimated at 3.2% in 2023, is projected to continue at the same pace through 2024 and 2025. This projection for global growth in 2024 and 2025 is below the historical (2000 -19) annual average of 3.8%, reflecting restrictive monetary policies and withdrawal of fiscal support, as well as low underlying productivity growth.

For advanced economies, the real GDP growth is estimated to rise slightly from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025. In emerging markets and developing economies, growth is expected to be stable at 4.2% in 2024 and 2025. This stability is due to moderation in emerging and developing Asia being offset by rising growth for economies in the Middle East, Central Asia, and sub-Saharan Africa. Low-income developing countries are expected to experience gradually increasing growth, from 4.0% in 2023 to 4.7% in 2024 and 5.2% in 2025, as some constraints on near-term growth ease.

Global headline inflation is anticipated to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025. However, many countries are witnessing elevated price pressures, and any further escalation of geopolitical conflicts could pose risks to renewed increases in inflation. Uncertainty remains regarding the extent of the slowdown in the US, and the situations in Europe and China could potentially worsen. However, downside growth risks have somewhat moderated, and forecasts predict improved growth conditions by the end of the year.

In 2023, major central banks raised policy interest rates to restrictive levels to curb inflation. This has resulted in high mortgage costs, challenges for firms refinancing their debt, tighter credit availability, and weaker business and residential investment. However, with inflationary pressures easing gradually, market expectations of a decline in future policy rates have given rise to reduced longer-term interest rates and rising equity markets.

Indian Economy

In 2023-24, Indias economy demonstrated remarkable resilience, outperforming expectations with a GDP growth of 8.2%, surpassing the forecasted 7.8%. This impressive growth is primarily driven by the governments emphasis on capital investments and strong momentum in manufacturing activities. To further bolster this momentum, the Interim Union Budget for 2024-25 cemented the focus on infrastructure development, allocating Rs. 11.11 lacs Cr. or 3.4% of GDP for capital expenditure. This is an 11.11% increase over the previous years estimates, aiming to stimulate private investments across various sectors.

(Source: https://www.cnbctv18.com/economy/india-gdp-grows-at-an- eye-popping-8-2-percent-but-the-economy-below-its-trend-growth-pace-19422190.htm)

With robust urban consumption and rural demand picking up momentum, consumption is anticipated to be a key driver of economic growth from 2024 to 2025. The government has launched several key initiatives to boost the economy and promote self-reliance in India. This includes stimulus packages to support sectors . facing economic challenges and the Aatmanirbhar Bharat campaign focusing on domestic manufacturing growth.

Headline inflation as of 31 March, 2024 moderated to 4.8% and food inflation remained at 8.6%, posing risks to the anchoring of inflation expectations. However, the robust growth momentum and GDP projections for 2024-25 provide policy flexibility to prioritize price stability.

Looking forward, India is poised to emerge as the worlds third-largest economy by 2030. Drivers of future growth include robust domestic consumption, evident structural demand, enhanced health in both corporate and banking sectors, and factors such as a shift towards renewable energy, improved trade policies, heightened investments in infrastructure, and ongoing digitalization. With comprehensive strategic reforms, India is well-positioned for sustained economic advancement.

Global Cocoa Butter Equivalent (CBE) Industry

The global CBE market is experiencing significant growth, with its value expected to rise from USD 1,189.43 million in 2023 to USD 2,030.04 million by 2032, at a CAGR of 6.12%. This growth trajectory is fueled by the increasing demand for chocolate and confectionery products, which, in turn, boosts the need for cocoa butter and its equivalents. The market expansion is also being driven by continuous innovation and the introduction of novel CBEs, opening new opportunities for development and diversification.

Furthermore, cocoa butter prices skyrocketed to a record USD 12,000 a ton in April 2024. This can be attributed to several factors including adverse weather conditions in West Africa, where most of the worlds cocoa is produced, and geopolitical tensions that disrupt supply chains. Rising labor costs and sustainability concerns have further strained cocoa production. These challenges have contributed towards making CBEs a more attractive and cost-effective alternative for manufacturers.

Consumer preferences are also playing a crucial role in shaping the CBE market. As people seek indulgent treats, there is a rising demand for high-quality ingredients like cocoa butter and its alternatives. Ethical sourcing and sustainability have become essential factors for modern consumers, who increasingly seek products that are produced responsibly. Moreover, the market is responding to a growing demand for healthier alternatives to traditional cocoa butter, with CBEs that offer improved nutritional profiles, such as reduced saturated fats and allergen-free options. Aligning with consumer demands not only drives market growth but also promotes the creation of products that positively impact health and wellbeing.

The specialty fats and oils market, valued at USD 13,713.1 million in 2024, is poised for significant growth in the coming years, with a projected CAGR of 7.38% from 2024 to 2029. This growth is driven by several key factors, including the rising demand for CBEs among food manufacturers and the increasing application of specialty fats and oils in the food industry.

Food manufacturers are increasingly turning to CBEs as a cost-effective substitute for cocoa butter, which is a costly ingredient. CBEs provide chemical and physical properties similar to cocoa butter, thereby helping improve fat stability and composition in end products. This trend is particularly prevalent in the confectionery industry, where the growing consumption of chocolate and other confectionery items has fueled the demand for CBEs. Additionally, growing health consciousness among consumers and their preference for natural, premium ingredients are further contributing to the markets expansion.

North America currently dominates the market, fueled by the regions high disposable incomes and substantial consumption of processed foods. The market is also witnessing increased activity from key players, who are focusing on expansion, acquisitions, and new product launches to strengthen their market positions.

(Source: https://www.mordorintelligence.com/industry-reports/specialty- fats-oils-market)

Global Chocolate Industry

Overview

The global chocolate market is witnessing steady growth. It is poised to reach USD 196.43 billion in 2032 from USD 133.32 billion in 2023, at a CAGR of 4.4%¹. Milk and white chocolate dominated with a 63.99%² share by value in 2023, driven by innovative flavors, while dark chocolate emerges as the fastest-growing segment due to health-conscious consumer preferences. Europe leads in the region, propelled by artisanal preferences and organic ingredients, with the Middle East showing the fastest-growing regional demand owing to its expatriate population.²

The chocolate markets growth trajectory is quite fascinating, driven by a mix of consumer preferences and broader market trends. The shift towards healthier options like sugar-free, gluten-free, and organic chocolates reflects a significant change in consumer consciousness about health and sustainability. As people become more aware of the impact of their choices on their personal health and the environment, they are becoming increasingly selective in their consumption practices.

The seasonal demand spikes around holidays like Christmas and Easter also showcase the deep cultural and emotional connections people have with chocolate. This makes it a versatile product that resonates across different occasions.

The expansion of chocolate into various sectors like beverages and baking demonstrates its versatility and adaptability in the culinary world. The premiumization trend driven by rising disposable incomes indicates that consumers are increasingly willing to invest in higher- quality chocolate experiences.

Global HoReCa Market Overview

The global Hotels, Restaurants, and Cafes (HoReCa) market is poised for substantial growth, at a projected CAGR of 6.6% from 2022 to 2030, reaching a market size of USD 5,653.7 billion. The expanding tourism industry, particularly in regions like the Asia Pacific, is a key driver. Increased international and domestic travel is leading to higher demand for hotels, restaurants, and other HoReCa services. Additionally, the increasing desire for healthier dining and lodging options is fueling growth, as consumers become more health-conscious, and businesses adapt their offerings.

The market is segmented by service type, with hotels, restaurants, and cafes and pubs all expected to experience significant expansion. The hotels segment is projected to grow from USD 546.1 billion in 2021 to USD 893.9 billion by 2030, while the restaurants segment is expected to expand from USD 2,166.4 billion to USD 3,769.1 billion. The cafes and pubs segment is also anticipated to see robust growth, increasing from USD 523.5 billion to USD 990.7 billion.

The market is further divided into single outlet and HoReCa chain categories. The single outlet segment is projected to grow from USD 1,724.5 billion in 2021 to USD 2,818.5 billion by 2030, driven by the surging demand for ready- to-eat and junk food from millennials. The HoReCa chain segment is expected to expand from USD 1,511.5 billion to USD 2,835.2 billion, benefiting from government initiatives and investments in tourism and hospitality infrastructure.

Technological integration is also a key driver, as the adoption of mobile apps, AI, and online ordering transforms the industry, boosting operational efficiency and improving customer experiences. The rising demand for convenient dining options and food services is also fueling market expansion, as customers seek hassle-free experiences.

The HoReCa markets growth is further propelled by increased disposable income, rapid urbanization, and the expanding middle-class population, especially in developing regions. These factors, combined with the demand for sustainability and responsive behavior, are expected to shape the industrys trajectory over the forecast period.

(Source: Global HoReCa Market Research Report Forecast to 2030, Market Research Future (MRFR),https://www.maximizemarketresearch.com/market-report/horeca-market/221480/)

Global Confectionery

Industry Overview

The sugar and confectionery products market has experienced robust growth in recent years, with its size increasing from USD 353.62 billion in 2023 to USD 371.74 billion in 2024, at a CAGR of 5.1%. This market is anticipated to continue growing steadily, reaching USD 440.72 billion by 2028 with a projected CAGR of 4.3% over the forecast period.

Industrialization has fueled demand in the sugar and confectionery products market by enabling cost-efficient large-scale production, enhancing product accessibility, and diversifying offerings. Additionally, it has improved distribution networks, facilitated market penetration, and ensured scalability to meet varying consumer demands. The expansion of sugar production globally, coupled with effective marketing and branding strategies, has further contributed to market growth. Additionally, seasonal traditions and gifting practices play a significant role in boosting sales, especially during holidays and special occasions.

Looking ahead, the market is expected to continue its steady growth trajectory. Some factors likely to influence this growth include shifting consumer preferences towards healthier options and a demand for clean labels and natural ingredients. There is also a notable focus on sustainability and ethical sourcing, driven by heightened awareness among consumers. The increasing role of digital marketing and e-commerce is reshaping howproducts are promoted and sold, providing companies with new avenues to reach customers directly and expand their market reach beyond physical stores.

Major trends forecasted for the sugar and confectionery products industry include the rise of healthier indulgence options, such as reduced-sugar or sugar-free alternatives. Plant-based and natural confectionery products are gaining popularity, catering to vegan and environmentconscious consumers. Moreover, there is a growing interest in artisanal and craft confectionery, highlighting consumer preferences for unique, high-quality offerings. Premiumization of chocolates and sweets is also on the rise, with consumers willing to pay more for gourmet experiences.

Furthermore, the growth of e-commerce presents significant opportunities for sugar and confectionery companies. Direct-to-consumer online platforms allow for personalized marketing and sales, enhancing customer engagement and market penetration. Overall, the sugar and confectionery products market is poised for continued growth and innovation, driven by evolving consumer preferences and technological advancements reshaping the industry landscape.

Global Cosmetics

Industry Overview

In 2023, the global cosmetics market reached a valuation of around USD 374.18 billion. It is projected to expand at a CAGR of 9.8%, over the forecast period from 2024 to 2032, to reach approximately USD 758.05 billion by 2032.

The cosmetics market is experiencing growth driven by heightened societal emphasis on grooming and personal appearance. Factors such as new product launches, rapid urbanization concentrating populations in areas with greater exposure to beauty trends, and higher per capita and disposable incomes contribute to market expansion. Additionally, increased accessibility to cosmetic products and services also plays a significant role in this growth. Looking ahead, the market is anticipated to be stimulated by the increasing demand for natural and organic products, alongside attractive marketing strategies and innovative packaging.

Biotechnological advancements are empowering researchers in the cosmetics industry to discover nontoxic and safe ingredients. Growing concerns about sustainability and environmental impact further propel the shift towards plant-based ingredients over synthetic chemicals.

Within the cosmetics market, the skincare segment is set to dominate, driven by increased consumer awareness about skin health and the importance of a simple yet effective skincare routine. Products like serums, sunscreen lotions, and face oils are in high demand. Additionally, there is a notable surge in interest in plant-based and natural skincare solutions, which are perceived as safe with minimal side effects. This trend is prompting industry players to innovate with new plant- based offerings. With the expansion of e-commerce into both urban and rural areas, and the growing consumer preference for the convenience and ease of online shopping, sales of cosmetics through digital channels have experienced substantial growth.

Indian Chocolate Market

Overview

The market size of the chocolate industry in India is projected to grow significantly over the forecast period. It is estimated to reach USD 2.31 billion in 2024 and increase to USD 3.58 billion by 2030, reflecting a robust CAGR of 7.58%. This growth trajectory emphasizes on the expanding consumer base and evolving preferences within the Indian chocolate market.

The upward trend in market value can be attributed to several factors driving the demand. Rising disposable incomes and evolving lifestyles are driving a growing preference for indulgent and premium confectionery products, such as chocolates. Additionally, heightened exposure to global brands and culinary trends through media and international travel is influencing consumer tastes, leading to an increased appetite for diverse chocolate offerings.

The forecasted growth is also propelled by strategic initiatives within the industry, including innovative product launches, aggressive marketing campaigns, and expanding distribution networks. Manufacturers are catering to evolving consumer demands by introducing new flavors, formats, and packaging options to capture a wider market share and enhance brand appeal.

Furthermore, the rising awareness of health and wellness among Indian consumers is shaping the chocolate market landscape. There is a growing preference for healthier variants such as sugar-free, organic, and dark chocolates, driven by concerns about dietary choices and ingredient transparency.

Looking ahead, the chocolate market in India is poised for continued expansion, driven by a combination of economic factors, shifting consumer preferences, and dynamic industry strategies. The projected growth rate underscores the significant opportunities for both domestic and international players to capitalize on the evolving chocolate market in India.

(Source: https://www.mordorintelligence.com/industry-reports/india-chocolate-market)

Indian Specialty Fats and Butter Market

The Indian specialty fats and Butter market is poised for substantial growth in the coming years, with projections indicating a robust CAGR of 5.1% from 2024 to 2029. This growth is driven by shifting consumer preferences towards healthier alternatives, as Indians increasingly seek specialty fats and oils with reduced saturated and trans fats and added nutritional benefits like omega-3 fatty acids. This trend is particularly pronounced in response to rising health consciousness among consumers. At the same time, the rapid growth of Indias food processing and bakery industry is significantly contributing to market expansion. Specialty fats and oils play a crucial role in enhancing the quality, texture, and taste of a wide array of products including baked goods, confectionery, and processed foods, thereby fueling demand within these sectors.

Additionally, the markets growth is bolstered by increasing utilization of specialty fats and oils in the personal care and cosmetics industry, where these ingredients are valued for their moisturizing and emollient properties. Despite these opportunities, challenges such as health-related concerns associated with certain fats, volatility in raw material prices, and regulatory compliance issues remain pertinent for manufacturers. Nevertheless, the Indian specialty fats and oils market remains dynamic and presents significant opportunities for manufacturers who can adapt to evolving consumer preferences and effectively navigate these challenges to capitalize on the expanding market landscape.

Indian HoReCa Market

Overview

The Indian HoReCa market is rapidly growing. It contributes over USD 78 billion annually to the countrys economy, accounting for more than 7% of its GDP and is projected to reach USD 450 billion by 2030.

The HoReCa market is segmented into hotels, restaurants, cafes, and pubs. Restaurants are the largest segment, valued at USD 138.6 billion in 2020 and projected to record a CAGR of 7.6% through 2030. Cafes and pubs are the second-largest segment, valued at USD 37.7 billion and expected to witness a CAGR of 8.5%. The market is further categorized into single outlets and HoReCa chains, with the latter segment projecting a CAGR of 9.5%.

Tourism is a major growth driver, with the number of foreign tourist arrivals expected to reach 30.5 million by 2028. Government initiatives like free visas are boosting tourism, driving the demand for hospitality services. Changing consumer preferences, particularly among the youth, towards international cuisines and increased dining out have also fueled growth. Innovations such as cloud kitchens, quick service restaurants, and AI-powered food vending machines are enhancing efficiency and expanding service offerings. The market for cloud kitchens in India is expected to reach USD 2 billion by 2024, while quick- service restaurants may become the top preference among Indian consumers in the future.

As the industry expands, the demand for quality ingredients and sustainable products will surge. Suppliers will benefit from this growth, experiencing increased demand for their products.

Indian Confectionery

Market Overview

The Indian confectionery market is experiencing significant growth, driven by several key trends and factors shaping consumer preferences and market dynamics. One primary factor amplifying the market demand is the emerging trend of gifting confectionery products during festivals, birthdays, anniversaries, and social gatherings.

Urbanization and improving living standards are also contributing to increased consumption of confectionery products, particularly imported chocolates, and candies, reflecting evolving consumer tastes and preferences. Furthermore, the rising health concerns related to cardiovascular diseases, obesity, and diabetes have led to a surge in the demand for sugar-free confectioneries. Consumers are increasingly seeking clean-label, cruelty-free, vegan, organic, and sustainably sourced confectionery options that are free from chemical additives and allergens, further driving market growth.

Innovations in ambient storage conditions and the introduction of antimicrobial packaging solutions are enhancing product shelf life and quality. This is further supporting the overall growth of the confectionery market in India.

Looking forward, these trends and advancements are expected to continue shaping the Indian confectionery market, fostering a positive outlook, and expanding opportunities for industry players to meet evolving consumer needs and preferences.

(Source: https://www.imarcgroup.com/india-confectionery-market)Indian Cosmetics ) Market

The Indian cosmetics market, valued at USD 8.1 billion in 2023, is projected to reach USD 18.4 billion by 2032, at a CAGR of 3.2% during the forecast period. This growth is fueled by evolving consumer preferences and notable trends that reflect a heightened awareness of health and environmental concerns.

One significant trend is the rising demand for organic and sustainable beauty products, highlighting consumers increasing focus on health and eco-friendliness. Digitalization has further revolutionized the market by expanding online beauty retail, making a diverse range of products more accessible to a broader audience.

Post-COVID lifestyle changes have led consumers to seek holistic beauty solutions, resulting in a shift in product preferences. There is a growing emphasis on skin and skincare products, spurred by heightened consumer awareness of skincare needs. Concerns about pollution and UV radiation have significantly increased the demand for protective and nourishing skincare solutions. Consequently, products featuring natural and organic ingredients, anti-pollution formulations, and UV protection are becoming increasingly popular in the Indian cosmetics market.

Company Overview

Manorama Industries Limited (referred to as The Company or MIL) is a global pioneer in manufacturing and supplying CBE, specialty fats and butter from tree-borne and plant-based seeds to the luxury food, chocolate, confectionery, and cosmetic industries. MILs key product portfolio includes CBE, Sal Butter, Sal Stearin, Shea Butter, Shea Stearin, Mango Butter, Mango Stearin, Mowrah Butter, Kokum Butter, and secondary streams like De-Oiled Cake. The Company is the largest supplier of cattle feed derived from exotic natural tree-borne seeds de-oiled cakes in India.

MIL has been accredited with more than multiple national and international awards from government and nongovernment entities, recognizing our commitment to excellence and innovation in the industry.

Global Footprint

At MIL, we take great pride in our global recognition and industry-leading reputation. Russia, Latin America, Japan, and Europe, Egypt, Turkey, and UAE are our key growing export markets.

In India, we have a significant presence in Chhattisgarh, Odisha, Jharkhand, and Madhya Pradesh and other states for raw material procurement. Our operations extend to Raipur and Mahasamund and our registered office is located in Mumbai. We are also a market leader in Shea- based cocoa butter equivalents (CBE), butters, and fats. Additionally, we are recognized as the worlds largest producer of Sal and Mango-based CBE, as well as exotic specialty fats and butters. A testament to our global reach is that a significant proportion of our revenue comes from export markets. For 2023-24, the number stood at 43% of total revenues, with the balance coming from the domestic market.

Manufacturing Capacity

Our integrated state-of-the-art manufacturing plant is located in Birkoni, near Raipur, Chhattisgarh. This strategic location in the heart of Indias forest region provides us with a distinct sourcing advantage. The R&D Centre of Manorama is certified by the Department of Scientific and Industrial Research (DSIR), Government of India. The plant is situated approximately 550 kilometers from the Visakhapatnam Port, ensuring efficient connectivity for logistics and transport for shea nuts import.

In April 2024, we achieved a major milestone with the launch of our new fractionation facility with a capacity of 25,000 MTPA, the commercial production of which started from 1 July, 2024 onwards. This expansion has increased our total fractionation capacity to 40,000 TPA, empowering us to cater to the escalating demand for CBE and Exotic Specialty Fats and Butters from our valued clients worldwide, particularly in the confectionery, chocolates, and cosmetics sectors. This is in addition to the commissioning of our refinery plant and other associated facilities earlier this year. Our combined capacity is poised to drive substantial growth in both revenue and profitability, accompanied by enhanced production efficiency. This strategic initiative will enhance our production capabilities, allowing us to address the growing demand from both existing and new clients more effectively and further solidify our position in the industry.

Opportunities

Diverse Agro-climatic Conditions

Indias diverse agro-climatic conditions provide a wide-ranging and large raw material base, offering opportunities for value addition and growth.

Rising Demand and Export Potential

Increasing domestic demand for processed foods, coupled with the potential to expand exports of processed foods, presents significant growth opportunities.

Technological Advancements

The technological revolution in sustainable processing has led to the introduction of new products with longer shelf lives, making the food industry more competitive and attractive for investment.

Elevated Spending Power and Luxury

With higher disposable incomes, consumers exhibit a greater propensity to invest in premium products. This trend encourages expanding the range of high- end offerings or introducing exclusive product variants tailored to satisfy consumer desires for luxury indulgence.

Growing Market

The cosmetic industry in India is witnessing growth due to changing consumer preferences, increased purchasing power, and rising awareness about wellness and health. This in turn is creating opportunities for new product categories and brands.

Government Initiatives

Government policies like the Make in India initiative support the growth of the cosmetic industry by promoting ease of doing business and creating a conducive environment for investment in the sector.

Export Potential

Indias geographical proximity to food importing regions and the availability of high-quality raw materials make it a potential sourcing hub for chocolate and confectionery industry, processed foods, and cosmetics, offering opportunities for export growth.

Rise of Ethical Beauty Products

In the beauty and cosmetics industry, there is an increasing demand for products that not only uphold high standards of quality but are also ethically manufactured. Introducing beauty lines that are cruelty- free, environmentally sustainable, and crafted from sustainable materials addresses the growing consumer preference for responsible consumption.

Financial Overview

Revenues for 2023-24 stood at Rs. 4,570.8 million, registering a growth of 30.3% year on year (YoY) as compared to Rs. 3,508.0 million last year. We reported a very strong absolute EBITDA growth of 30.2%, which stood at Rs. 735.2 million in 2023-24 as compared to Rs. 564.5 million in the last year. PAT for the year grew by 34.7% to Rs. 401.1 million as compared to Rs. 297.8 million same last year, while PAT Margins for 2023-24 stood at 8.8%.

The Board has recommended a final dividend of Rs. 0.40 per equity share (20% of face value) on the paid-up equity capital for the year 2023-24, subject to the approval of shareholders.

Details of significant changes in key financial ratios, along-with detailed explanations:

Risks and Concerns

Environmental and Social Risks in Tribal Areas

MIL operates in tribal regions within the forests of central India and West Africa, exposing the Company to potential risks from adverse developments in these areas. Such risks could disrupt the supply chain, damage infrastructure, and harm the Companys reputation. To mitigate these risks, MIL adheres strictly to local laws, engages regularly with tribal communities, ensures transparency in our supply chain, evaluates our environmental impact, and initiates community development projects.

Regulatory and Compliance Risks

Operating in a highly regulated industry, MIL must comply with various local, regional, and international regulations. Compliance with product quality standards, labelling requirements, safety regulations, and environmental standards is critical to avoid penalties, product recalls, and damage to reputation. Changes in regulations or the introduction of new ones may necessitate costly adjustments to production processes or formulations. The Company diligently complies with all applicable laws and regulations to mitigate these risks.

Shifts in Consumer Behavior

Changes in consumer preferences, economic downturns impacting disposable incomes, and other factors can lead to reduced demand for lifestyle-specific products like high-end chocolates and cosmetics offered by MIL. To mitigate this risk, we have strategically diversified our geographic presence across multiple economies. Our goal is to minimize the impact of adverse changes in any single market on our overall business performance.

Supply Chain Disruptions

MIL operates within a complex global supply chain that relies on multiple suppliers, transportation networks, and logistics providers. Disruptions such as natural disasters, political instability, labor strikes, or transportation issues can hinder our ability to procure raw materials, manufacture products, and deliver them to customers on time. We mitigate these risks by maintaining diversified sourcing options and cultivating strong relationships withreliable suppliers. Continuous monitoring and proactive management of supply chain issues are integral parts of our risk mitigation strategy.

Foreign Exchange (Forex) Risk

As an export-oriented Company, MIL is exposed to fluctuations in foreign exchange rates that can significantly impact financial performance. To manage this risk effectively, we have implemented a comprehensive risk management policy. This includes identifying and quantifying forex risks and utilizing advanced hedging techniques to mitigate exposure to currency fluctuations.

Cybersecurity Risks

In an increasingly digital environment, MIL faces cybersecurity risks such as data breaches, hacking attempts, and malware attacks. A breach could compromise sensitive information, disrupt operations, damage reputation, and result in financial losses. To mitigate these risks, MIL employs robust cybersecurity measures including encryption, regular vulnerability assessments, employee training on cyber hygiene, and partnerships with cybersecurity experts to ensure data protection and system integrity.

Competition and Market Saturation

The competitive landscape within the specialty fats and butter industry poses a risk of increased competition and market saturation for MIL. New entrants, technological advancements, and evolving consumer preferences may intensify competition, potentially impacting market share and pricing power. To mitigate this risk, MIL focuses on continuous innovation, differentiation through product quality and sustainability practices, strategic partnerships, and maintaining strong customer relationships to sustain market leadership and competitiveness.

Internal Financial Control System

At MIL, we place significant emphasis on maintaining an effective internal financial control system, encompassing both business operations and financial reporting systems. To ensure its efficiency, management and internal auditors conduct regular audits. The internal control mechanisms are tailored to the size and complexity of the Companys operations, ensuring their appropriateness.

Integral to the internal control systems are the comprehensive documentation of policies, guidelines, and standard operating procedures (SOPs). These serve as vital components, contributing to the Companys robust internal control framework. We regularly conduct checks and audits, performed by our internal auditors, to identify any deviations from the established SOPs. In such instances, we promptly recommend remedial actions for resolution.

The Audit Committee takes proactive measures by initiating and adopting the recommendations put forth by the internal auditors. This ensures swift remedial action and strengthens the overall effectiveness of the internal control systems within the Company.

HR/Industrial Relations

At MIL, we are highly committed to the well-being and advancement of our workforce . We empower employees to acquire new skill sets that meet evolving industry demands through rigorous training programs and embracing emerging technologies. Our proactive approach to talent acquisition focuses on attracting top industry professionals who are essential in navigatingtodays rapidly changing socio-economic landscape. While continuous skill development enhances production levels, maintaining a skilled workforce overtime presents challenges.

To address this, MIL prioritizes fostering positive relationships with employees, offering equal growth opportunities, and implementing robust anti-sexual harassment policies, particularly aimed at supporting female employees. By cultivating a supportive work environment, we ensure the sustainability of our business and promote a culture that values and respects every individual. As of 31 March, 2024, the Company proudly employed a total of 411 dedicated workers who contribute significantly to our collective success.

Cautionary Statement

Statements made in this Management Discussion and Analysis Report may contain certain forward-looking statements based on various assumptions about the Companys present and future business strategies and the environment in which we operate. Actual results may differ substantially or materially from those expressed or implied due to risks and uncertainties. These risks and uncertainties include the effects of economic and political conditions in India and abroad, volatility in interest rates and in the securities market, new regulations and Government policies that may impact the Companys businesses, and the ability to implement strategies. The information contained herein is as of the date referenced, and the Company does not undertake any obligation to update these statements. The Company has obtained all market data and other information from sources believed to be reliable or its internal estimates, although its accuracy or completeness cannot be guaranteed.