Shah Foods Ltd Management Discussions

Annexure E

Management Discussion and Analysis is given in a separate section forming part of the Directors Report in this Annual Report.

During the Financial Year 2025-26 marked a significant transformation in the business profile of Shah Foods Limited ("Shah Foods" or "the Company").

During the year, the Company expanded its business objects to enable participation in the battery, power-backup, solar and allied energy-solutions sector. As part of this strategic realignment, Shah Foods acquired 100% of the equity share capital of Tandhan Power Technologies Private Limited ("Tandhan Power"), formerly known as Tandhan Impex Private Limited, on 27 March 2026, consequent to which Tandhan Power became a wholly owned subsidiary of the Company.

The acquisition materially changed the economic profile of Shah Foods. Following the transaction, Shah Foods functions as the listed holding and strategic platform of the Group, while Tandhan Power represents the principal operating business of the Group in batteries, power-backup products, solar products and allied energy solutions.

The Groups strategy going forward is therefore centred on building upon the existing operating platform of Tandhan Power while evaluating complementary opportunities in the broader power and energy-solutions ecosystem. Capital deployment and business expansion will continue to be evaluated with emphasis on commercial viability, financial discipline, execution capability and longterm value creation.

During the year under review, the Company undertook a strategic investment in a private company engaged in the trading of all batteries, UPS & its spare parts, and other allied products. This investment marks a significant step towards diversifying the Companys business portfolio and establishing its presence in a sector with considerable growth potential, driven by increasing demand from industries such as batteries, UPS & its spare parts and solar batteries.

In line with this strategic investment, the Company also altered the Object Clause of its Memorandum of Association to broaden its business scope and align its objects with the activities of the investee company. The amendment enables the Company to pursue opportunities in the manufacture, purchase, sale, import, export and trading of batteries and other allied products, either directly or through strategic investments, collaborations or other permissible business arrangements.

The Batteries industry continues to play a vital role in supporting various sectors of the economy. With increasing emphasis on product innovation, operational efficiencies, sustainable manufacturing practices and expanding industrial applications, the industry offers significant opportunities for long-term growth. The Companys strategic realignment and investment are expected to strengthen its business prospects, enhance stakeholder value and provide a platform for future expansion in this evolving industry.

The Company will continue to evaluate suitable opportunities consistent with its revised objects and business strategy, while maintaining prudent financial and governance practices.

The Companys strategic investment in a private company engaged in the Batteries and allied products sector, coupled with the amendment of its Objects Clause, has broadened its business horizon and positioned it to explore opportunities in a growing manufacturing segment.

The battery sector is seeing accelerated commercialisation of new chemistries (e.g., LFP, sodium ion, and early solid state) and manufacturing innovations that improve cost, safety, and cycle life. Global lithium ion battery demand is expected to grow materially through 2026-2030, driven by electric vehicles (EVs) and rapidly expanding battery energy storage systems (BESS) for renewables integration and grid stability.

Energy storage, in particular, is emerging as the fastest growing segment, with installations and shipments projected to grow at high double digit rates in 2026 and beyond. The Board believes that the Companys diversified business approach, supported by prudent investment decisions and sound corporate governance practices, will enable it to capitalize on emerging opportunities while creating sustainable value for its stakeholders.

Like any business, the Company is exposed to various risks and uncertainties that may impact its operations and financial performance. These include changes in economic conditions, fluctuations in the prices and availability of materials, changes in government policies and regulations, technological advancements, competitive market conditions, supply chain disruptions and evolving environmental and sustainability requirements.

Further, the performance of the Companys strategic investment may be influenced by industry-specific factors affecting Batteries sector, including changes in demand, input costs, regulatory developments and market dynamics.

The Company continues to monitor these risks on an ongoing basis and adopts appropriate risk mitigation measures through prudent business planning, periodic review of its investment portfolio, strong internal controls and effective corporate governance practices.

During the financial year under review, the Company did not carry out any manufacturing or operational activities in the Batteries or allied products segment. Accordingly, there was no segment-wise or product-wise operational performance to report in respect of the newly introduced line of business.

The Company remains committed to pursuing sustainable growth by exploring opportunities aligned with its revised business objectives and long-term strategic vision. The Board believes that these strategic initiatives provide the Company with the flexibility to evaluate business opportunities in the Batteries industry.

The Company has undergone a strategic transformation by acquiring a battery business Company and amending its main object from the production of biscuits to the manufacture and sale of batteries and related energy solutions. This fundamental shift positions the Company to participate directly in one of the fastest-growing industrial sectors globally, driven by electric mobility, renewable energy integration, and grid-scale energy storage.

Going forward, the Company will continue to assess potential opportunities in line with its revised Objects Clause, while adopting a prudent and disciplined approach towards investments and business expansion.

Management expects the transition to the battery business to accelerate revenue growth and improve profitability over the medium term, as the Company aligns its operations with high-growth end markets and benefits from favourable policy support and declining battery costs. While the outlook is positive, the Company will continue to monitor risks related to raw material supply, regulatory changes, and competitive dynamics, and will pursue appropriate risk-mitigation strategies to ensure sustainable long-term value creation.

The Companys future performance will depend on various factors, including market conditions, economic environment, industry developments and the successful implementation of its strategic initiatives. The management remains focused on creating sustainable long-term value for all stakeholders through responsible business practices and sound financial management.

The Company operates in a dynamic business environment and is exposed to various risks that could affect its business operations, financial performance and strategic objectives. The Board and the Management continuously monitor the internal and external business environment and take appropriate measures to identify, assess and mitigate such risks.

The Companys strategic investment in a private company engaged in the Batteries and allied products sector exposes it to industry-specific risks, including fluctuations in material prices, changes in customer demand, evolving regulatory requirements, environmental and sustainability obligations, technological advancements and competitive market conditions.

Further, the Companys proposed diversification into the Batteries sector, pursuant to the amendment of its Main Objects Clause, may involve business, operational and regulatory risks associated with entering or expanding into a new line of business.

The Company has established appropriate internal control systems, governance mechanisms and risk management processes to identify and address potential risks.

The Company is following a proper and adequate system of internal controls in respect of all its activities; further all transactions entered into by the Company are fully authorised, recorded and reported correctly.

During the financial year under review, the Company continued to focus on strengthening its strategic position through investment- led business diversification. The Company made a strategic investment in a private company engaged in the manufacture and trading of Batteries and allied products and amended its Main Objects Clause to align its business objectives with its long-term growth strategy.

Since the Company has not commenced operational activities in the newly introduced line of business during the financial year 2025-26 under review, its financial performance does not yet reflect the impact of such diversification. The financial results for the year are, therefore, primarily attributable to the Companys existing operations and other income, as disclosed in the audited financial statements.

The Company recognizes that its human resources are a valuable asset and remains committed to fostering a work environment that promotes professionalism, integrity, equal opportunity and employee well-being.

During the financial year under review, there were no material developments on the human resources or industrial relations front. The industrial relations within the Company remained cordial and harmonious throughout the year, and no significant industrial disputes or disruptions were reported.

As on 31 March 2026, the Company had 2 (Two) employees on its rolls. The Company continues to focus on maintaining a productive work environment and strengthening its human resource practices in line with its business requirements and strategic objectives.

In accordance with SEBI (Listing Obligations & Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (i.e. change of 25% or more as compared to the immediately previous Financial Year) in key sector-specific financial ratios including Debtors Turnover, Inventory Turnover, Debt Service Coverage Ratio, Current Ratio, Debt Equity Ratio, and Net Profit Margin (%) and details of any change in Return on Net Worth as compared to the immediately previous Financial Year.

The financial statements of the Company for the financial year ended 31st March 2026 have been prepared in accordance with the Indian Accounting Standards ("Ind AS") prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, and other accounting principles generally accepted in India.

The accounting treatment adopted in the preparation of the financial statements is consistent with the applicable Indian Accounting Standards (Ind AS), and there has been no deviation from the prescribed accounting standards.

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward looking statement within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.