Mishtann Foods Ltd Management Discussions

I. GLOBAL ECONOMY OVERVIEW The global economy remains remarkably resilient, with growth holding steady as inflation returns to target. The journey has been eventful, starting with supply-chain disruptions in the aftermath of the pandemic, a Russian-initiated war on Ukraine that triggered a global energy and food crisis, and a considerable surge in inflation, followed by a globally synchronized monetary policy tightening. Yet, despite many gloomy predictions, the world avoided a recession, the banking system proved largely resilient, and major emerging market economies did not suffer sudden stops. Moreover, the inflation surge despite its severity and the associated cost-of-living crisis did not trigger uncontrolled wage-price spirals (see October 2022 World Economic Outlook). Instead, almost as quickly as global inflation went up, it has been coming down. On a year-over-year basis, global growth bottomed out at the end of 2022, at 2.3 percent, shortly after median headline inflation peaked at 9.4 percent. According to our latest projections, growth for 2024 and 2025 will hold steady around 3.2 percent, with median headline inflation declining from 2.8 percent at the end of 2024 to 2.4 percent at the end of 2025. Most indicators point to a soft landing. Markets reacted exuberantly to the prospect of central banks exiting from tight monetary policy. Financial conditions eased, equity valuations soared, capital flows to most emerging market economies excluding China have been buoyant, and some low-income countries and frontier economies regained market access (see the April 2024 Global Financial Stability Report). Even more encouraging, we now estimate that there will be less economic scarring from the pandemic the projected drop in output relative to pre- pandemic projections for most countries and regions, especially for emerging market economies, thanks in part to robust employment growth. Astonishingly, the US economy has already surged past its pre- pandemic trend.

Resilient growth and faster disinflation point toward favorable supply developments, including the fading of earlier energy price shocks, the striking rebound in labor supply supported by strong immigration flows in many advanced economies. Decisive monetary policy actions, as well as improved monetary policy frameworks, especially in emerging market economies, have helped anchor inflation expectations. However, the transmission of monetary policy may have been more muted this time around in countries such as the United States, where an increased share of fixed rate mortgages and lower household debt levels since the global financial crisis may have limited the drag on aggregate demand up to now. Despite these welcome developments, numerous challenges remain, and decisive actions are needed. First, while inflation trends are encouraging, we are not there yet. Somewhat worryingly, the most recent median headline and core inflation numbers are pushing upward. This could be temporary, but there are reasons to remain vigilant. Most of the progress on inflation came from the decline in energy prices and goods inflation below its historical average. The latter has been helped by easing supply chain frictions, as well as by the decline in Chinese export prices. But services inflation remains high sometimes stubbornly so and could derail the disinflation path. Bringing inflation down to target remains the priority. Second, the global view can mask stark divergence across countries. The exceptional recent performance of the United States is certainly impressive and a major driver of global growth, but it reflects strong demand factors as well, including a fiscal stance that is out of line with long-term fiscal sustainability (see April 2024 Fiscal Monitor). This raises short-term risks to the disinflation process, as well as longer-term fiscal and financial stability risks for the global economy since it risks pushing up global funding costs. Something will have to give. In the euro area, growth will pick up this year, but from very low levels, as the trailing effects of tight monetary policy and past energy costs, as well as planned fiscal consolidation, weigh on activity. Continued high wage growth and persistent services inflation could delay the return of inflation to target. However, unlike in the United States, there is scant evidence of overheating and the European Central Bank will also need to carefully calibrate the pivot toward monetary easing to avoid an excessive growth slowdown and inflation undershoot. While labor markets appear strong, that strength could prove illusory if European firms have been hoarding labor in anticipation of a pickup in activity that does not materialize. Chinas economy is affected by the enduring downturn in its property sector.Credit booms and busts never resolve themselves quickly, and this one is no exception. Domestic demand will remain lackluster for some time unless strong measures and reforms address the root cause. Public debt dynamics are also of concern, especially if the property crisis morphs into a local public finance crisis. With depressed domestic demand, external surpluses could rise. With depressed domestic demand, external surpluses could rise. The risk is that this will further exacerbate trade tensions in an already fraught geopolitical environment. At the same time, many other large emerging market economies are performing strongly, sometimes even benefiting from a reconfiguration of global supply chains and rising trade tensions between China and the United States. These countries footprint on the global economy is increasing, and they will play an ever larger role in supporting global growth in years to come. A troubling development is the widening divergence between many low-income developing countries and the rest of the world. For these economies, growth is revised downward, whereas inflation is revised up. Worse, in contrast with most other regions, scarring estimates for low-income developing countries, including some large ones, have been revised up, suggesting that the poorest countries are still unable to turn the page from the pandemic and cost-of-living crises. In addition, conflicts continue to result in loss of human lives and raise uncertainty. For these countries, investing in structural reforms to promote growth- enhancing domestic and foreign direct investment, and strengthening domestic resource mobilization, can help manage borrowing costs and reduce funding needs while achieving development goals. Efforts must also be made to improve the human capital of their large young populations

Third, even as inflation recedes, real interest rates have increased, and sovereign debt dynamics have become less favorable in particular for highly indebted emerging markets. Countries should turn their sights toward rebuilding fiscal buffers. Credible fiscal consolidations help lower funding costs and improve financial stability. In a world with more frequent adverse supply shocks and growing fiscal needs for safety nets, climate adaptation, digital transformation, energy security, and defense, this should be a policy priority. Yet this is never easy, as the April 2023 World Economic Outlook documented: fiscal consolidations are more likely to succeed when credible and when implemented while the economy is growing, rather than when markets dictate their conditions. In countries where inflation is under control, and that engage in a credible multiyear effort to rebuild fiscal buffers, monetary policy can help support activity. The successful 1993 US fiscal consolidation and monetary accommodation episode comes to mind as an example to emulate. Fourth, medium-term growth prospects remain historically weak. Chapter 3 of this

report takes an in-depth dive into the different drivers of the slowdown. The main culprit is lower total factor productivity growth. A significant part of the decline comes from increased misallocation of capital and labor within sectors and countries. Facilitating faster and more efficient resource allocation can help boost growth. Much hope rests on artificial intelligence (AI) delivering strong productivity gains in the medium term. It may do so, but the potential for serious disruptions in labor and financial markets is high. Harnessing the potential of AI for all will require that countries improve their digital infrastructure, invest in human capital, and coordinate on global rules of the road. Medium-term growth prospects are also harmed by rising geo-economics fragmentation and the surge in trade restrictive and industrial policy measures since 2019. Global trade linkages are already changing as a result, with potential losses in efficiency. But the broader damage is to global cooperation and multilateralism. Finally, huge global investments are needed for a green and climate-resilient future. Cutting emissions is compatible with growth, as is seen in recent decades during which growth has become much less emissions intensive. Nevertheless, emissions are still rising. A lot more needs to be done and done quickly. Green investment has expanded at a healthy pace in advanced economies and China. Cutting harmful fossil fuel subsidies can help create the necessary fiscal room for further green investments. The greatest effort must be made by other emerging market and developing economies, which need to massively increase their green investment growth and reduce their fossil fuel investment. This will require technology transfer by other advanced economies and China, as well as substantial financing, much of it from the private sector, but some of it concessional. On these questions, as well as on so many others, there is little hope for progress outside multilateral frameworks and cooperation.

The global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability. Risks to global growth are considered broadly balanced. Uncertainty about 2024 has decreased since the October 2023 WEO, as the outturns for 2023 are now known. The risk that global growth will fall below 2 percent an outcome that has occurred on only five occasions since 1970 in 2024 is assessed at less than 10 percent, compared with 15 percent in October. Risks for inflation in 2024 have also receded. The risk that core inflation will be higher in 2024 than in 2023 is now assessed at less than 10 percent, compared with 15 percent in the October 2023 WEO. The scenarios quantify several risks to the outlook: (1) the extent of healing from the COVID-19 pandemic, (2) changes in fiscal policy, (3) deflation in China, (4) geopolitical risk, and (5) greater global divergence.

The G20 model is also used to quantify several risk scenarios relevant for the current outlook. The scenarios assume that monetary policy and automatic fiscal stabilizers respond endogenously to macro developments, unless explicitly stated otherwise.

Greater-than-expected healing from the pandemic.

Persistent positive surprises to growth forecasts from emerging market economies, and some advanced economies, over the past year have led to upward reassessments of potential output. At the same time, current WEO projections for most G20 countries include durable scarring effects from the pandemic and other recent shocks, which are most visible in labor productivity and labor force participation rates that remain below prepandemic trends. The scenario assumes the supply-side surprises continue over the medium term, with greater normalization (healing) over 2024-26 than in the baseline, implying additional increases in potential output. Country-specific improvements in total factor productivity help close the labor productivity gap by half relative to prepandemic forecasts: For the median G20 country, total factor productivity increases by about 2 percent over this period. Labor force participation also improves over the same period, fully closing the gap that opened through COVID-19, back to the prepandemic trend—and implying a 0.7 percentage point increase in labor force participation for the median G20 country. Normalization in the scenario is greater in emerging markets excluding China than in advanced economies, as current projections imply greater scarring for the former group. The scenario does not assume supply-side improvement (relative to baseline) for China or the United States

Fiscal policy.

Current WEO projections include modest fiscal tightening in many countries, mainly advanced economies, but also some emerging markets, with structural primary deficits in the median G20 country decreasing from about 1.5 percent of potential GDP in 2023 to zero by 2028 and most of the decrease in the first or second year. The scenario assumes that the fiscal tightening envisaged for 2024-25 does not take place. Structural primary deficits remain at their 2023 levels in 2024 and increase further in 2025, implying some fiscal stimulus relative to the baseline in both years, as shown in Table 1.2.1. The stimulus is greater in countries with larger expected fiscal withdrawal, such as the United States and the euro area in 2024 and Japan in 2025, while no stimulus is assumed for China. Lack of fiscal consolidation generates an increase in global borrowing costs starting in 2025. Advanced economies with debt levels above 100 percent of GDP experience increases in both term and sovereign premiums that peak at 100 basis points by 2026, while emerging markets experience increases in both premiums that peak at 150 basis points, also by 2026. A fiscal consolidation eventually takes place, in 2026-27; it is larger than in current projections to partly offset the effects of the initial expansion (and higher premiums) on debt accumulation. It is assumed that fiscal expansions and contractions are implemented through changes in targeted and general transfers in equal parts and that automatic stabilizers are turned off

Deflation in China

The October 2023 WEO included a downside scenario for China, featuring deeper-than-expected contraction in the real estate sector absent swift action to restructure property developers and weaker consumption in the context of subdued confidence. A similar if somewhat greater downside is analyzed here. The main difference relative to October is that the scenario leads to greater deflationary pressures, on account of larger-than-realized economy-wide slack and excess capacity in the goods sector, and greater sensitivity of inflation to supply-demand imbalances (a steeper Phillips curve). Core inflation in China declines relative to baseline by 1 percentage point in 2024 and 2 percentage points in 2025 and 2026, resulting in negative core inflation outturns in 2025-26. Chinas export price inflation decreases further, by 2 percentage points in 2024 and 4 percentage points in 2025 and 2026, respectively. The fall in inflation is persistent but ultimately temporary: monetary and fiscal policy accommodation help the initial shock to demand fade, and Chinas inflation gradually converges back to baseline after 2026

Geopolitical risk.

The scenario assumes that an escalation of conflict in the Middle East leads to a surge in oil prices and in shipping costs. Oil prices are 15 percent higher, a moderate increase by historical standards. Average container prices rise by 150 percent in 2024-25, an increase similar to that following recent incidents in the Red Sea. Most of the increase in the cost of shipping is concentrated in Asia-to-Europe routes. Oil prices and container costs return to baseline in 2026

Divergence and global financial conditions

The final scenario assumes greater-than-expected divergence among advanced economies. US aggregate demand surprises to the upside, with domestic demand increasing by 1.5 percent in 2024 relative to current projections, while domestic demand decreases by 0.5 percent in Japan and 1 percent in the euro area in 2024. Diverging shocks to demand lead to divergence in monetary policy—tighter in the US and looser in the euro area—while monetary policy in Japan is unchanged relative to baseline. With US policy rates 70 basis points higher than baseline in 2024, global financial conditions tighten unexpectedly. Sovereign premiums in emerging markets and developing countries excluding China increase by 150 basis points in 2024-25; corporate premiums increase in emerging market and advanced economies by 75 basis points over the same period. Premiums return to long-term averages in 2026.

OUTLOOK

The baseline forecast is for the world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023. A slight acceleration for advanced economies—where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025—will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025. The forecast for global growth five years from now—at 3.1 percent—is at its lowest in decades. Global inflation is forecast to decline steadily, from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. Core inflation is generally projected to decline more gradually.

The global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability

II. INDIAN ECONOMY OVERVIEW

Indian economy grew by a robust nearly 8.0% in FY 2023-24 over and above provisional growth rate of 7.2% during the last financial year.

The industrial manufacturing sector has experienced a significant boost, attracting global technology giants like Apple eager to expand their supplier networks within India. This momentum is further supported by the implementation of state industrial policies that complement sector-specific incentive schemes. Concurrently, substantial investments in logistics and infrastructure development, including the construction of new roads, highways, and rail tracks, underscore the governments commitment to bolstering this critical sector.

Indias strategic focus on reducing logistics costs is pivotal for its ambition to become a key player in global supply chains and become a US$5-trillion- economy by the end of 2025. With an eye on the future, the country aims to achieve developed economy status by 2047, demonstrating a clear trajectory towards sustained growth and development.

Moreover, Indias burgeoning domestic consumption played a crucial role in fostering economic growth, particularly as the nation surpassed China to become the worlds most populous country. By reducing its reliance on global demand and focusing on bolstering internal consumption, India managed to outpace the growth rates of other comparable countries. However, it is worth noting that the impact of the global economic scenario was not entirely impervious to India. As evidenced by the elevated headline inflation rate of 6.7% during the year, the country did experience some repercussions. Despite this, Indias overall economic performance remained resilient, a testament to its proactive measures and favorable conditions. (Source: IMF World Economic Outlook,

April 2023)

OUTLOOK

Indias economic prospects continue to be highly promising, as the nation is poised to witness robust growth driven by augmented capital investments and strengthened credit disbursement, facilitated by the bolstering banking sector. According to the Asian Development Outlook of April 2024, Indias GDP is projected to achieve a growth rate of 7.0% in 2024 and 7.2% in 2025.This growth trajectory is further reinforced by several other factors that under pin the nations economic resilience.

Firstly, Indias burgeoning population provides a substantial demographic dividend, which contributes to its economic growth potential. Secondly, the implementation of progressive digital transformation initiatives has led to greater efficiency and innovation across various sectors, thus bolstering the overall economic performance. Additionally, the governments commitment to supportive policies has fostered a conducive environment for business and investment, fostering confidence among domestic and international stakeholders.

Furthermore, the prudent management of macroeconomic fundamentals has played a pivotal role in strengthening Indias economic foundation. The convergence of declining global commodity prices and the interest rate adjustments implemented by the Reserve Bank of India (RBI) are expected to contribute to a reduction in inflation to 4.4% in CY 2024 and 4.2% in CY 2025, thereby ensuring stable price levels and enhancing economic stability.

In addition to these factors, recent governmental pronouncements aimed at boosting agricultural productivity, including the establishment of digital services for crop planning and support for agriculture start-ups, are expected to have a positive impact on the agricultural sectors growth in the medium term. Moreover, the governments commitment to infrastructure development under initiatives such as GatiShakti, logistics, and industrial corridor development will significantly enhance industrial competitiveness and pave the way for sustained economic expansion. Given these robust macroeconomic indicators and policy initiatives, international agencies such as the World Bank, the

International Monetary Fund (IMF), and the Asian Development Bank have all projected India to be the fastest-growing economy in the forthcoming years. These institutions acknowledge Indias strong economic fundamentals, strategic initiatives, and demographic advantages as key drivers of its impressive growth outlook.

III. INDUSTRY OVERVIEW

Indian FMCG Industry

The Fast-moving consumer goods (FMCG) sector is the 4th largest sector of the Indian economy. It is characterised by high turnover consumer packaged goods, i.e. goods that are produced, distributed, marketed and consumed within a short span of time. FMCG products that dominate the market today are detergents, toiletries, tooth cleaning products, cosmetics, etc. The FMCG sector in India also includes pharmaceuticals, consumer electronics, soft drinks packaged food products and chocolates. Since the sector encompasses a diverse range of products, different companies dominate the market in various sub-sectors. However, some of the top FMCG companies in India are- Dabur (60%), Colgate (54.7%), Hindustan Unilever (54%).

The Fast-Moving Consumer Goods (FMCG) industry in India has witnessed a significant expansion in recent years, primarily driven by consumer-led growth and an increase in product prices, particularly for essential goods. The explosion of digital connectivity and e- commerce services has played a pivotal role in boosting the FMCG sector in India. The high penetration of smart phones, coupled with the easy accessibility of credit and debit cards and the increasing adoption of online banking, has enabled even rural populations to access and purchase FMCG products conveniently. E-commerce platforms have become a preferred mode of shopping for a vast number of consumers, providing them with easy access to a wide range of products and the convenience of door step delivery. To add to this, the rising disposable income, especially in rural India, combined with the sectors low penetration levels, also presents a significant growth opportunity for FMCG companies. The surge in rural consumption has also created a heightened demand for branded products in this vast untapped market.

An extensive summary of Indias FMCG market share is provided below-

1. From US$ 110 billion in 2020, the FMCG market in India is projected to grow at a CAGR of 14.9% to US$ 220 billion by the next couple of years.

2. The packaged food market in India is anticipated to grow twofold to US$ 70 billion in the next few years.

3. Urban and Rural Areas are becoming more connected to the internet, increasing the requirement for FMCG India, primarily through e-commerce sites.

4. There is potential for growth due to rising disposable income in rural India and low levels of market penetration.

5. It is anticipated that the e-commerce sector will account for 11% of all FMCG sales.

6. Up to 100% of foreign equity in single-brand retail and 51% in multi-brand retail investments have been approved.

7. With an investment of US$ 1.42 billion, the union governments production-linked incentive (PLI) scheme offers businesses a significant chance to increase exports.

8. Due to the year-round demand for FMCG products, investments in this sector draw investors.

Over the past twenty years, the FMCG industry in India has undergone a remarkable transformation. By 2025, the FMCG market is expected to reach nearly $220 billion, with a growth rate of 14.7%.

The FMCG industrys growth has also been fueled by innovation and product diversification. Companies have been constantly introducing new products to cater to the evolving tastes and preferences of the Indian consumer. The emphasis on product quality and packaging has further strengthened consumer trust and loyalty to wards various brands. Another aspect that has contributed to the expansion of the FMCG sector is the emergence of new distribution channels and marketing strategies. FMCG companies have adopted innovative distribution models and focused on building robust supply chains to reach even the most remote corners of the country efficiently. Additionally, digital marketing and social media campaigns have played a crucial role in enhancing brand visibility and attracting a broader consumer base.

Despite the impressive growth, the FMCG industry in India also faces a few challenges that demand attention. Price volatility in essential commodities, changing regulatory landscapes, and increasing competition from both domestic and international players necessitate constant adaptation and strategic planning.

With the continued adoption of digital technologies and consumer - centric innovations, the FMCG industry in India is poised to continue its upward trajectory, catering to the diverse needs and preferences of the vast and dynamic Indian consumer base. The FMCG sector holds immense potential due to its low penetration levels, well - established distribution networks, cost - effective operations, lower per capita consumption, large consumer base, and streamlined manufacturing processes for most products, resulting in relatively lower capital investments. To add to this, in 2022, the UAE announced a substantial investment of US$2 billion to establish integrated food parks in India, incorporating state-of-the-art climates mart technologies to reduce food waste and spoilage, conserve fresh water, and utilize renewable energy sources, further reflecting the potential of the industry.

Basmati Rice Industry

Basmati is one of the most popular long-grain rice varieties due to its texture, nutty flavour, and popcorn- like aroma. Much of the basmati rice is cultivated in India and India is the major exporter of Basmati rice.

India stands as the worlds second-largest rice- producing nation, owing to its favourable climatic conditions, enabling it to supply more than 20% of the global rice demand. Various regions within the country cultivate diverse rice varieties at different times of the year. Notably, the Eastern, North-Eastern, and Southern parts of India serve as major rice- producing regions, blessed with a climate conducive to year-round rice cultivation.

Despite rice being a widely consumed and versatile grain globally, few varieties rival the esteemed reputation of Basmati rice. Bestowed with the Geographical Indication (GI) status in India, Basmati rice can only be sold under this name if grown in specific regions of the country. The cultivation of Basmati rice demands precise agro-climatic conditions, specific geographic locations, meticulous plant nutrition, agronomic practices, and specialized methods of harvesting, processing, and aging. The distinct aroma, texture, and flavor of Basmati rice make it a highly sought-after ingredient in culinary traditions worldwide. Its diverse varieties, each boasting unique characteristics, offer endless opportunities for culinary exploration and innovation.

As the largest producer and exporter of Basmati rice globally, India holds a prominent position in the market. In FY 2023-24, the value of total Basmati rice exports from India amounted to Rs.483.89 billion, registering a growth of 25.00% compared to FY 2022- 23. Basmati rice is a very widely used ingredient, especially in the Middle Eastern cuisine, which translates into the demand for Basmati rice as the MENA region accounted for approximately 74.79% of Indias Basmati rice exports in FY24. Europe and USA + Canada contributed 2.43% and 5.20%, respectively, of the Basmati rice exports from India in FY24, with the remaining being exported to other regions and countries. Indian packaged rice market also gaining ground on the back of growing demand for packaged products on account of growing per capita income, increasing urban population, and a sharp increase in demand of the finest quality products like Basmati rice.

In the fiscal year 2024, basmati rice exports have achieved remarkable growth in both volume and value. According to the latest data, shipments from April to February have surpassed $5.2 billion, with volumes exceeding 4.67 million tonnes, setting a new high.

While the exports for the entire fiscal year are projected to establish a new record once the figures for March are incorporated, concerns arise due to prevailing geopolitical tensions in the Middle East, which is a key market accounting for over 70 percent of basmati exports.

The recent conflict between Iran and Israel in the region may pose significant challenges for Indian exporters in the new financial year. The situation is being closely monitored, as its potential impact on basmati rice exports remains uncertain. Indian exporters have already faced difficulties as a result of recent attacks in the Red Sea region, leading to increased shipping costs and transit time to destinations such as Europe and the United States. However, analysts believe that the ongoing tensions may also result in higher exports and prices. Countries like Iran and Iraq currently possess sufficient stock to weather any geopolitical fallout, while other Gulf nations such as Saudi Arabia, Oman, Qatar, and the UAE may face shortages. This could potentially lead to a fresh surge in export orders for basmati rice, accompanied by increased prices due to additional demand and risk premium.

Mishtann Foods Ltd robust demand from traditional markets in Middle East and other markets such as the United States and the United Kingdom.

Basmati shipments have maintained a growth rate of about 20 per cent in the first ten months of the financial year 2023-24 (April-January) with the export value touching $4.586 billion. With shipments gathering pace in February, ahead of the Ramadan festive season, trade sources expect the value to exceed $5 billion for the current fiscal.

As per industry reports, the overall Indian rice retail market is growing at ~3% CAGR rate while packaged rice market growing at a much faster pace at ~7% CAGR providing solid growth opportunities for MISHTANN.

Indias favorable climatic conditions and expertise in cultivating Basmati rice continue to support its dominant position in the market. With its unique aroma, texture, and flavor,

Basmati rice remains a sought-after culinary ingredient worldwide, driving consistent demand. The Geographical Indication (GI) status further enhances its exclusivity and market appeal. Indias strong track record as the largest exporter of Basmati rice, coupled with steady growth in export value, signifies a positive trajectory for the industry. As consumers increasingly seek premium and distinctive rice varieties, the diverse range of Basmati rice cultivars offers ample opportunities for culinary experimentation and expanding market horizons. Overall, the Basmati rice industry in India is poised for continued growth and prosperity.

IV. Market Trends, Drivers, and Challenges

In the era of technology advancement, there is trend of producing genetically modified (GM) rice to ascertain the quality of rice and food security. Though commercially there is no production of GM rice, but many varieties have been approved for commercial production which is expected to boost the India rice industry.

Rice is a staple crop for 70% of the world and thus the demand for rice is expected to continue to grow over the forecast period. The food security concerns all over the world is driving the growth of the India rice industry, which by exporting rice to various countries is contributing towards global food security.

With the climate change, continuous rising demand by consumers and the food security, rice industry is facing the challenge of producing rice without compromising on efficiency, eq u ita bi l ity, environmentally-friendly, and more resilience to climate change. It has become imperative to produce rice at lesser land, with lesser water and labor. India is also facing lack of adequate agriculture infrastructure such as technologically advanced equipment, transportation network, and effective public private partnership.

Key Growth Drivers

4 Shift in market towards packaged food and branded, organised players 4 Upsurge of modern retail driving penetration and consumption

4 Emergence of the omni-channel consumer comfortable in making both offline and online purchases

4 Steady disposable incomes driving demand for

S premium and semi-premium products S Evolving consumer taste to try out new and innovative products

S Rise of large consumer internet companies in the food delivery space creating new consumption avenues

Some of the threats that the company is exposed to are as follows:

+ Commodity Price Risks

The Company is exposed to the risk of price fluctuation of raw material as well as finished goods. The company proactively manages these risks through forward booking, Inventory management and proactive vendor development practices. The Companys reputation for quality, product differentiation and service, coupled with existence of powerful brand image with robust marketing network mitigation the impact the impact of price risk on finished goods.

+ Legal and regulatory compliance risk

Our activities in India and in the countries where we export our products to is subject to close government oversight. Various laws govern food production, supply and distribution, and it is imperative that we comply to these laws to ensure our status as a going concern.

+ Human Resources Risks

Retaining the existing talent pool and attracting new talent are major risks. The company has initialed various measures including rolling out strategic talent management system, training and integration of learning and development activities.

+ Strategic Risks

Emerging businesses, capital expenditure for capacity expansion, etc., are normal strategic risk faced by the company. However, the company has well-defined processes and procedures for obtaining approvals for investments in new business and capacity expansion etc.

+ Competition Risks

The foodgrains industry is highly competitive, with a number of global, pan-India, regional and local companies. Failure to effectively address competitive challenges could adversely affect our business.

+ Unanticipated business disruption risks

Failure to effectively prepare for and respond to unanticipated disruptions in operations can cause delays in delivering products to our consumers, leading to a negative impact on our business.

V. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUECY

Mishtann Foods Limited believes that safeguarding of assets and business efficiency can be prolonged by exercising adequate internal controls and standardising operational processes.

The Company possesses a robust internal control system to review performance, track operations and gauge liquidity. The system also ensures that all transactions are duly reported and all assets are properly safeguarded. Timely review of operations and recommendations of auditors allow the Company to make corrections whenever and wherever necessary.

Some of the major features of the Companys internal control systems that reflect sufficient adequacy include the following:

+ Adequate articulation and documentation of policies and guidelines

+ Preparation and monitoring of annual budgets through ongoing reviews

+ Strong compliance management systems that amplify monitoring, surveillance and response + Well-defined delegation of power with authority limits for approving revenue and capital expenditure, which is reviewed on a needs-based basis

+ Use of enterprise resource planning (ERP) system to record data for accounting and consolidation and also for management information purposes + Periodic engagement of outside experts to carry out independent reviews of the effectiveness of various business processes

Furthermore, internal audit is carried out in accordance with auditing standards to review design and effectiveness of internal control systems and procedures to manage risk, enable operational monitoring control and ensure compliance with relevant policies and procedures. Moreover, the Audit Committee of the Board regularly reviews execution of the audit plan, the adequacy and effectiveness of internal audit systems and monitoring of implementation of internal audit recommendations, including those relating to bolstering the Companys risk management policies and systems.

VI. HUMAN RESOURCES

The Mishtann Foods family comprises 5 full-time employees and their dependents. The Company believes that its employees are its biggest asset, focusing on their personal and professional advancement through a culture of empowerment, trust and career growth.

HR Aim

S Establishing healthy linkages to continuous improvement in productivity, quality, cost competitiveness and efficiency S Carrying out continuous improvements in all areas of work to increase competitiveness and retain customer focus

S Simplifying complex problems to focus on critical issues and maintain a lean organisation structure

S Empowering and motivating the employees to do their best through decentralised operations

S Recruiting the right candidates with positive attitude and growth potential

S Specifications of qualifications and experience customised for different jobs

S Providing opportunities of employment for all irrespective of caste, religion, region or any other criteria

S Rewards and recognition based on meritocracy and achievement of prestated target

S Providing proper induction and orientation to all levels and share the group visions for early integration in the group

S Developing a sense of pride, belongingness, pleasure and social fulfilment in being a member of Mishtann family

S Providing opportunity at all levels to participate in the decision making process of the Company S Providing feedback to the employees on their performance, strengths and weakness to increase efficiency

VII. FINANCIAL PERFORMANCE REVIEW

The company recorded Standalone total income of Rs. 32,247.50 lacs, reduced by 50.42% as compared to the previous year. EBIDT of the company stood at Rs. 2,725.66 lacs as compared to Rs.8,260.4 lacs in previous year.

The company recorded Consolidated total income of Rs. 1,28,814.22 lacs this year. Consolidated EBIDT of the company stood at Rs.35,912.03 lacs this year.

Particulars	2023-2024 Consolidated	2023-2024 Standalone	2022-2023 Standalone
Total revenue from operations	12,88,08,54,669	322,41,82,602	650,43,16,779
Earnings before interest, depreciation and tax (EBIDT)	359,11,95,534	27,25,65,886	82,60,38,340
PBT	353,98,24,996	22,11,95,348	76,81,38,361
PAT	346,02,91,401	14,16,61,753	49,92,25,748
EPS	3.35	0.14	0.50

VIII. KEY FINANCIAL RATIOS

Key financial ratios for FY2023-24 compared to the last financial year are given below

Particulars	2023-2024 Consolidated	2023-2024 Standalone	2022-2023 Standalone
Return on capital employed (%)	64.40	0.12	68.82
Return on equity (%)	335.34	0.14	33.23
Net debt to equity	0.92x	0.92x	0.72x
Net working capital	144.46 Days	53 Days	91 Days
Operating profit margin (%)	27.21	8.24	12.58
Net profit margin (%)	26.86	4.39	7.68

CAUTIONARY STATEMENT

The statements in the management discussion and analysis section with regard to projections, estimates and expectations have been made in good faith. The achievement of results is subject to risks, uncertainties and even less than accurate assumptions. Market data and information are gathered from various published and unpublished reports. Their accuracy, reliability and completeness cannot be assured.

	For and on behalf of the Board
Date: 05-06-2024	Hiteshkumar Gaurishankar Patel	Navinchandra Dahyalal Patel
Place: Ahmedabad	Managing Director	Director
	(DIN: 05340865)	(DIN: 05340874)