Mehta Housing Finance Ltd Management Discussions

Annexure - III

Global economic overview:

The global economy in 2024 demonstrated significant resilience, while grappling with persistent supply chain disruptions, largely due to the impact of geopolitical issues. According to the International Monetary Fund (IMF), global GDP growth was recorded at around 3.2%, reflecting a steady progress despite tightening financial conditions and global conflicts particularly in Eastern Europe and the Middle East.

Advanced economies grew by a modest 1.6% appx., constrained by high interest rates and cautious consumer spending. Emerging and developing economies, especially in Asia, were the primary drivers of global growth, with the IMF projecting a healthy appx. 4.6% growth, sustained by strong performance in the first half of the year. Chinas slower-than-expected recovery in 2024, weighed on the overall Asia-Pacific growth by reducing regional trade, commodity demand, and investment momentum. Global inflation eased to around 5.7%, a decline from appx. 6.8% in 2023, supported by stabilising commodity prices and disciplined fiscal prudence across major economies. The relief was dampened by persistent supply chain disruptions aggravated by the prolonged Red Sea crisis, pushing freight costs higher and causing trade delays.

Amid a challenging global economic landscape and deteriorating geopolitical conditions, India has been a bright spot. India is poised to lead the global economy once again, with the International Monetary Fund (IMF) projecting it to remain the fastest growing major economy over the next two years. According to the April 2025 edition of the IMFs World Economic Outlook, Indias economy is expected to grow by 6.2 per cent in 2025 and 6.3 per cent in 2026, maintaining a solid lead over global and regional peers.

On the other hand, geopolitical tensions, global policy uncertainty, ongoing supply chain realignments, lingering and financial market volatility continue to pose concern. Additionally, there is downside risk due to escalating trade tensions and market adjustments at another level. A prolonged trade war and policy uncertainty pose significant risk to both long-term & short-term growth prospects and revive inflationary pressures.

FY 2025-26 is expected to accelerate this growth driven by a strong pipeline of policy-led initiatives, including infrastructure expansion, agriculture modernisation, and support for MSMEs and startups. The Union Budget allocated a record Rs.11.21 lac crore towards capital expenditure, targeting enhancements in logistics, connectivity and industrial development.

Indias unemployment rate declined to 4.9% in 202418, reflecting stronger job creation across sectors. Simultaneously, continued efforts to simplify compliance frameworks and promote entrepreneurship contributed to an improving business environment. Whereas Indias consumer spending is projected to surge to $6 trillion by 2030, positioning it among the worlds largest consumer markets15. In FY 2024-25 alone, spending crossed $2.4 trillion, reflecting rising incomes, urbanisation, and shifting consumption patterns.

The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year. In India, the food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry. Accounting for about 32 per cent of the countrys total food market, The Government of India has been instrumental in the growth and development of the food processing industry. The government through the Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments in the business. It has approved proposals for joint ventures (JV), foreign collaborations, industrial licenses, and 100 per cent export-oriented units. The Confederation of Indian Industry (CII) estimates that the food processing sectors have the potential to attract as much as US$ 33 billion of investment over the next 10 years and also to generate employment of nine million person-days. Apart from this, the governments emphasis on modernizing the food processing ecosystem is reflected in the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY). This initiative bridges infrastructure gaps by developing Mega Food Parks, cold chain networks, and agro-processing clusters, enabling Indian exporters to meet global quality standards for processed food products.

The online food ordering business in India is in its developing stage and witnessing exponential growth. With online food delivery players building scale through partnerships, the organised food business has a huge potential and a promising future in terms of demand for value-added products, further generation of employment, enhancement in farmer incomes, and support to the nations ambition to become a global hub for high-quality, packaged food.

Indias growth outlook for FY 2025-26 remains buoyant, driven by stable macroeconomic fundamentals, strong domestic consumption, and a sustained policy focus on infrastructure development, manufacturing, and digital transformation. As the economy advances towards the $4 trillion milestone, government-led initiatives?such as record capital expenditure, agriculture modernisation, and targeted support for MSMEs?are set to accelerate economic activity across sectors. The food processing industry is expected to play a pivotal role in this growth story. With rising demand for health-oriented food products, coupled with increased investments in cold chain infrastructure, agro-processing clusters, and export facilitation, the sector is poised for sustained expansion. Government incentives under schemes continue to attract capacity building and innovation, positioning India as a key player in the global food supply chain.

Growing demand for healthier lifestyle and eating habits are driving the demand for nutritious and quality food.

• Packaging standards: Improvement in the packaging quality has extended the shelf life of products, enhancing convenience.

• Ready to eat food: Millennials, Gen Z, Gen Alpha now account for more than 25% appx. of the global population. The ready-to-eat meals market is expanding as a result of busier lifestyles, rising incomes, an increase in nuclear families and an absence of cooking skills.

• Food safety: Increasing health awareness among consumers and a rising adoption of vegetarian and vegan lifestyles, particularly in developed regions, have led to a growing demand for organic foods.

• Healthy diet: Consumers increasingly seeking foods that are driving traction for clean and sustainable food products.

During the year under review, the Company has commenced trading operations of peanuts. The Company had also identified the reservation of vendors in extending trading activities in the current structure of the Company and thus, name of the Company changed to Ruparel Food Products Limited by which it can take advantage of established brand name Ruparel which belongs to the Promoters and cater easily with the vendors and customers in Indian as well as foreign markets. The Company is also exploring business opportunities for expansion in terms of Pan India delivery, launching product in B to C segment etc.

With the commencement of trading business, the Company has incurred a total expenditure of Rs.512.16 lacs in comparison to expenditure of Rs.20.30 lacs in the previous year with Rs. 294. 10 lacs revenues in the current as compared to no revenue in previous year. Hence, the Company has incurred a total loss of Rs. 13.66 lacs in comparison to loss of Rs. 20.30 lacs in the previous year.

Opportunities:

Since the Company has recently commenced its business operations in terms of trading activities and yet to commence operations in a full-fledged manner, as stated above it is looking out for various opportunities by taking advantage of established brand, less competition, it can experiment and explore the market as much as possible and also simultaneously ensure low costing of the products to be manufactured without compromising over the quality of the products so to launch product in B to C segment and Pan India delivery.

Threats:

The Company oversees the threats in the operations, which can arise due to excessive increase in shipping freight rates, shortage of shipping containers, lack of liquidity, since overall cashflows are affected aftermath of the pandemic COVID-19, the Russia-Ukraine conflict, red sea crisis which also led to global upheaval etc.

The Company is taking all such steps to generate revenues and is in the process to commence full operations shortly. The Company has in place its Risk Management Policy to avoid events, situations and circumstances which may lead to negative consequences on the Companys business. Currently, there are no elements of risk, which in the opinion of the Board may at present threaten the existence of the Company.

The Company is having a systems-based approach to Business Risk Management, and it has identified process of risk management which includes prioritization of risks, selection of appropriate mitigation strategies and periodic reviews of the process of management of risks.

Risk Management framework of the Company shall primarily focus on following elements:

A) Risk to Company Assets and Property - It will be ensured that there is proper security and maintenance of assets and adequate coverage of insurance to facilitate replacement of assets with minimal disruption to operations. The roles and responsibilities of the departments shall be identified to ensure adequate physical security and maintenance of their assets.

B) Employees Related Risks - Employees constitute the most important assets of the Company. The Human Resources Policies have been evolved over the years with the object of mitigating employee related risks including reducing attrition rate. Adequate legal safeguards shall be provided to protect confidential information and protect the Company from any probable contractual liability on account of misconduct/errors/omissions of employees.

C) Foreign Currency Risks - The Company may have revenues and expenditure of the Company once it is fully operational which include earnings and expenditure in foreign exchange. Foreign currency risk management ensures that the treasury department continuously tracks movement of foreign currencies, avails of services of experts, and hedges the risk through appropriate mechanisms.

D) Risks associated with Noncompliance of Statutory enactments - The Company is a legal entity incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the BSE Limited. The Company is required to ensure compliance of provisions of various applicable statutory enactments. The Company ensures that qualified professionals shall be employed to comply with various applicable laws. In addition to the statutory audits, the Company also undertakes internal audit/s at different levels periodically to ensure timely check on the statutory compliances.

E) Competition Risks - Risk of competition is inherent to all business activities. The sector in which the Company will carry its business operations; there will always have an inherent risk of changes in the industry. To remain competitive, the Companys strategy in this regard is to continuously keep upgrading its quality of raw material used, designs, size and shapes of the products, and technology, innovating and building up a sustainable team of skilled professionals. This would ensure that the Company has an edge over competition in the market.

F) Operational Risks - The Company shall constantly work to limit the operational risks that run through all facets of operations. This requires the combined efforts of all business and support units, and the tools required continue to be developed. Apparent trends shall analyse, and various operating groups combined into task forces to address these. The use of technology shall be harnessed for more control. The company also ensures that contracts shall properly drafted and adequate indemnity clauses are incorporated in the contracts entered into with one or more parties.

The management of the Company is in the continuous process of designing the internal control system in order to provide the Board of Directors a reasonable assurance that the companys assets are safeguarded, the transactions are authorized and properly recorded, and that material errors and irregularities are either prevented or would be detected within a specified period of time.

Currently, the Internal Audits are periodically conducted by a firm of Chartered Accountant who monitors and evaluate the efficiency and adequacy of internal control systems in the Company and accordingly the management shall ensure that adequate systems for internal control commensurate with the Companys size and are in place.

At present there is only one employee looking after accounting related work in the Company apart from Directors and Key Managerial Personnel. Once the operations are commenced, the Company will appoint more employees and will provide conducive workplace, marked by knowledge accretion, teamwork and career growth.

As stated above, the Company is yet to initiate operations and hence the said clauses are not applicable for the year under review.

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.

This report contains forward-looking statements, identified by words like, will, shai, expected and so on. AH statements that address expectations or projections about the future, but not limited to the Companys strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, we do not guarantee that these are accurate or will be realised.

Our actual results, performance or achievements could thus differ from those projected in any forward-looking statements. We assume no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.