Pioneer Agro Extracts Ltd Management Discussions

The information is required in compliance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forming a part of the Boards Report for the year ended March 31, 202 5 and has to be read in Conjunction with the Companys financial statements, which follows this Section. The management of the company is presenting herein the overview, opportunities and threats, initiatives by the Company and overall strategy of the company and its outlook for the future. This outlook is based on managements own assessment and it may vary due to future economic and other future developments in the country.

GLOBAL ECONOMY

The global economic landscape in 2024-25 was characterized by a complex interplay of geopolitical tensions, trade policy uncertainties, and climate-related disruptions. The year 2024 witnessed significant electoral activities, with major elections in countries like India, the United States, and Indonesia, contributing to heightened political and economic uncertainty. This uncertainty has been exacerbated by ongoing geopolitical conflicts, such as the Russia Ukraine war and the conflict in the Middle East, which has disrupted global trade routes and energy supplies, leading to increased prices and inflationary pressures. The IMF projects global growth to be 3.3 percent for both 2025 and 2026. The global economic outlook remains clouded by medium-term risks, including policy-generated disruptions that could affect fiscal sustainability and financial stability. The global trade environment is also evolving, with a noticeable rise in protectionist trade policies and shifting global supply chains. The recent announcement of tariffs by U.S. government, the impact of which is still evolving, has resulted in increase in economic uncertainty, market volatility and may result in reconfiguring of supply chains and retaliatory measures impacting global trade patterns..

NATIONAL ECONOMY

Indias economy has demonstrated remarkable resilience amidst global headwinds, with real GDP growth estimated at 6.5 percent for FY25 as per second advance estimates released by National Statistical Office (NSO). This growth is primarily driven by robust performance in the agriculture and services sectors. The agriculture sector has benefited from record Kharif production and favorable monsoon conditions, while the services sector has shown strong growth across various sub-sectors, including financial, real estate, and professional services. High-frequency indicators such as PMI services, air passenger traffic, and hotel occupancy rates indicate sustained momentum in the services sector. Looking ahead, Indias GDP growth for FY26 is projected to be between 6.3 and 6.8 percent, supported by strong domestic demand, higher public capex, and improving business expectations. However, global uncertainties, including geopolitical tensions and trade policy shifts, pose potential risks to the growth outlook. The governments focus on structural reforms and deregulation will be crucial in enhancing Indias competitiveness and sustaining high growth rates in the medium term.

INDIAN FMCG MARKET2024-25

In 2025, the Indian FMCG market size is expected to hold between $211-245 billion, depending on the data source, marking robust overall sector health. Multiple agencies, including CRISIL and IMARC, forecast the market to soar past $1 trillion by 2030-2034, growing at a CAGR of 14-21% through the decade. This makes the FMCG sector one of Indias largest contributors to GDP, job creation, and rural prosperity.

Year	Market Size (USD Billion)	CAGR(%)
2023	167	-14% (2023-25)
2024	245	-
2025	211-245	14-21%(2025+)

^ CURRENT TRENDS - IN FMCG INDUSTRY IN INDIA

1. Digital & D2C Boom

a. Brands are aggressively moving sales online. In 2025, e-commerce and Direct-to-Consumer (D2C) models account for a sharply rising percentage of FMCG sales, especially in metros.

b. Ultra-fast Quick commerce delivery model (minutes to hours) fuels FMCG impulse buys; growing at - 75% YoY; crucial for metro and tier-2 shoppers.

c. Leveraging platforms like social media platforms to drive brand engagement, influencer marketing, and live shopping.

2. Premiumization

1. A trend of premiumization is occurring in several FMCG categories as a result of consumers willingness to pay more for quality.

2. About 30% of FMCG sales are now driven by premium products, premium snacks from organic dals to grooming products, showing a shift to value over just low prices.

3. Health & Wellness

1. Consumers are demanding for multigrain snacks, protein-rich foods, low-sugar, and dietary supplements is surging by prioritizing their health and fitness?especially among Gen Z, millennials, and in Tier 1 and 2 cities.

4. Regionalization

2. Eco-friendly packaging and “green” supply chains are crucial for engaging health-conscious youth and urban consumers.

3. Growing consumer demand for packaging made of biodegradable materials and for products that are transparent about their effects on the environment.

How is the FMCG Industry Growing in India?

Growth Rate & Dynamics

^ Overall Revenue Growth: CRISIL predicts a solid 7-9% revenue increase in FY2025, with rural market

demand returning strong, even as urban consumption slows.

^ Segment-Wise Growth:

1. Rural India: Posting higher volume growth (8.4%) compared to urban areas (2.6%) in the latest 2025 figures, rural regions now lead in driving the industry.

2. Urban vs Rural: While urban demand has cooled, resilience in rural India?supported by improved incomes and government schemes?keeps the market buoyant.

3. Online/Offline Channels: E-commerce is catalyzing growth across both urban and semiurban regions, with brands investing in rural e-commerce logistics.

4. Brands: Market leaders like HUL, ITC, Dabur, and Godrej Consumer are growing through product innovation and deeper rural penetration, while nimble private limited players and local brands are taking share in emerging categories.

COMPANY OVERVIEW

Industry Structure & Development

Pioneer Agro Extracts Limited (PAEL) was incorporated carrying main objects to manufactures hydrogenated vegetable and refined oils, a staple product used for the process of cooking. It was producing quality products and had equipped its plant with highly sophisticated equipments to ensure that the products do not only qualify the specifications as prescribed in different enactments by the Government but also satisfy the international quality parameters.

It was a leading manufacturer and marketer of healthier edible and vanaspati oils having strong portfolio of Brand viz ISHWAR. Company experienced a cut throat competition from other established market players and unorganized sectors, and Company had sold its edible and vanaspati oil business in year 2015.

The company has engaged services of qualified and talented staff down to the floor level. PAEL carries core philosophy to make use of the natural resources to fulfill the needs of human kind. In line with expansion plans, Pioneer Agro is keen on identifying new and different business opportunity in worldwide markets with an aim to replicate its leadership position in new business.

Internal Control System & Their Adequacy

The Company has evolved a system of internal controls to ensure that the transactions are authorized, recorded and correctly reported. The internal control system is supplemented by management reviews and independent periodical internal audit which evaluates the functioning and quality of internal control and provide assurance of its adequacy and effectiveness.

The Key Constituents of the Internal Control System are:

^ Establishment and review of Business Plans;

^ Identification of Key Risks and opportunities;

^ Policies on operational and strategic risk management;

^ Clear and well defined organization structure and limits of financial authority;

^ Continuous identifications of areas requiring strengthening of internal controls;

^ Operating procedures to ensure effectiveness of business processes;

^ System of monitoring compliance with statutory regulations;

^ Well defined principles and procedures for evaluation of new business proposals/capital expenditure;

^ A robust management information system;

^ A robust internal audit & review system.

M/s Yudhisthir& Co., Chartered Accountants have been appointed as Internal Auditor to carry out Internal Audit in terms of provisions of Section 138 of Companies Act, 2013.

Reports of Internal Audit are regularly reviewed by the Management and corrective action implemented & will be taken to strengthen the controls and enhance the effectiveness of the existing system. Internal Audit Reports are presented to the Audit Committee of the Board.

Opportunities & Threats Opportunities

The external environmental analysis may reveal certain new opportunities for profit and growth. Such opportunities may include:

V Promoters rich experience in the industry;

V Extensive Marketing and Distribution Network;

V Diverse Agro-ecological situations;

Threats

Changes in external environmental also may present threats to the firm. Such threats may include:

S Emergence of substitute products;

S New regulations;

S Increased trade barriers;

S Production situation;

S Processing situation

Risk Management

The Company has a well-defined process in place to ensure appropriate identification and treatment of risks. Risk identification exercise is inter-woven with the annual planning cycle which ensures both regularity and comprehensiveness. The identification of risk is done at strategic, business, operational and process levels. While the mitigation plan and actions for risks belonging to strategic, business and key critical operational risks driven by senior leadership, for rest of the risks, operating managers drive the conception and subsequent actioning of mitigation plans.

The key strategic, business and operational risks which are significant in terms of their impact to the overall objectives of the Company along with status of mitigation plans are periodically presented and discussed in the Board Meetings. The Company, through its risk management process, aims to contain the risks within its appetite. There are no risks which in opinion of the Board threaten the operations and existence of the Company.

Future Outlook

Pioneer Agro is keen on identifying new and different business opportunity in worldwide markets with an aim to replicate its leadership position in new business.

Financial Performance

The revenue from the operation of the Company is Rs. 103.39 Lakh as against Rs. 103.94 Lakh which was recorded for the previous year. Other income for the financial year under review was of Rs. 42.52 lakhs as against Rs. 41.18 Lakhs which were recorded for the previous financial year.

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

Key Financial Ratio

Below are the details of any significant changes (over 25% difference) in the Companys financial ratios compared to the previous year, as required by market regulations.

Ratios	FY 2024-25	FY 2023-24	% change	Reasons, if change is more than 25%
Current ratio (in times)	60.05	72.07	-12.02%	-
Debtors Turnover Ratio	NA as no A/c receivable	NA as no A/c receivable	-	-
Inventory Turnover Ratio	na	NA	-	-
Interest Coverage Ratio	NA as no interest expense	NA as no interest expense
Debt-Equity ratio (in times)	NA as no Debt	NA as no debt	-	-
Operating Profit Margin	8.4%	-6.63%	-	-
Net Profit Margin	8.05%	-7.00%	-	-

 

EPS (Diluted) Rs Return on Investment	0.19	0.00	0.19	-
	NA as no Investment	NA as no Investment	-	-

Human resource/Industrial relations

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

Cautionary Statement

Statement in this Management Discussion and Analysis report detailing the Companys objective, projections about the future, estimates, expectations or predictions including, but not limited to, statements about the Companys strategy for growth, products development, market position and expenditures may be “forward - looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could difference to the Company operations include economic conditions affecting demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statues or other incidental factors.

Declaration

As provided under LODR Regulation, 2015 with the Stock Exchanges, all Board Members and Senior Management Personnel have affirmed compliance with the Companys Code of Business Conduct and Ethics for the year ended 31^st March, 2025.

For and on behalf of the Board Pioneer Agro Extracts Limited

	Sd/-	Sd/-
	Jagat Mohan Aggarwal	Sanjeev Kumar Kohli
	(Managing Director)	(Director)
Date: 27th August, 2025 Place: Pathankot	DIN:00750120	DIN:07144225