sharat industrie Management discussions

Global Economic Review

As per the International Monetary Fund (IMF), the global economy growth is projected to fall from an estimated 3.5 percent in 2022 to 3.0 percent in both 2023 and 2024. The rise in central bank policy rates to fight inflation continues to weigh on economic activity. Global headline inflation is expected to fall from 8.7 percent in 2022 to 6.8 percent in 2023 and 5.2 percent in 2024. Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward. Rising interest rates and the war in Ukraine continue to weigh on economic activity. Chinas recent reopening has paved the way for a faster-than-expected recovery. Global inflation is expected to fall to 6.6 percent in 2023 and 4.3 percent in 2024, still above pre-pandemic levels. Hence, the Global Economy in the year 2022 has been a mixture of positive and negative developments contributing to moderate growth.

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Gross Domestic Product (GDP) Growth

Source: World Economic Outlook Report

OUTLOOK

The global economy is set to slow substantially in 2023. The lagged and current effects of monetary tightening, as well as more restrictive credit conditions, are expected to weigh on activity in the second half of the year, with weakness persisting into 2024. Excluding China, growth in emerging market and developing economies (EMDEs) is set to decline markedly, with the outlook weakest in countries with elevated fiscal and financial vulnerabilities. The resurgence of recent banking sector turmoil represents a serious risk. Widespread financial stress could have especially severe economic consequences.

Many developing economies are struggling to cope with weak growth, persistently high inflation, and record debt levels. Yet new hazards such as the possibility of more widespread spillovers from renewed financial stress in advanced economies could make matters even worse for them. Public debt now averages about 70% of GDP. Interest payments are eating up a rising share of limited government

revenues. 14 low-income countries are already in, or at high risk of, debt distress. The rest of 2023 is also expected to present challenges, necessitating strategic adjustments to stimulate economic revival.

Indian Economic Review

After real GDP contracted in FY 2020-2021 due to the COVID-19 pandemic, growth bounced back strongly in FY 2021-2022, supported by accommodative monetary and fiscal policies and wide vaccine coverage. Consequently, in 2022, India emerged as one of the fastest growing economies in the world, despite significant challenges in the global environment – including renewed disruptions of supply lines following the rise in geopolitical tensions, the synchronized tightening of global monetary policies, and inflationary pressures.

The Indian real GDP expanded 7.0% in the fiscal year 2022-23 as against 8.7% in the financial year 2021-22.

Year-wise Indian GDP Growth (In %)

Real GDP growth (Annual %)	FY 2020-2021	FY 2021-2022	FY 2022-2023
India	-6.21	8.70	7.0

India exhibited robust growth in 2022-23 amidst prevailing global headwinds. Sound domestic macro- fundamentals, fiscal policy thrust on capex, healthy balance sheets of the corporate sector and the financial sector, and structural reforms announced and implemented over the recent years by the government have strengthened resilience of the economy, besides stepping up the growth momentum. Subdued external demand conditions operated as a drag. Labour market conditions normalised, and unorganised sector activity returned to expansion zone ina 2022-23. The universal vaccination programme of the government - one of the largest mass vaccinations drives in the world, involving more than two billion doses - helped in improving consumer and business confidence (RBI Annual Report 22-23)

Industry Review

In the context of the year 2022, the Food & Agriculture Organization (FAO) of the United Nations responded to the prevailing moderate increase in food insecurity, which had been exacerbated by the COVID-19 pandemic. As a proactive measure, the FAO introduced 17 Sustainable Development Goals (SDGs) along with their corresponding targets and indicators. These initiatives were designed to foster inclusive, sustainable economic growth that addresses environmental, economic, and social concerns. Notably, the theme of "The Sustainable Development Goals and Fisheries and Aquaculture" emerged as pivotal in addressing the global food shortage.

The Fisheries & Aquaculture Sectors role in the contemporary era, especially in the 21st century, has gained significant recognition due to its fundamental contribution to global food security and nutritional requirements. However, to further enhance and expand this contribution, there is an imperative need to expedite transformative changes in various aspects including policy formulation and management strategies.

These transformative changes are crucial to ensure the long-term sustainability and growth of the Fisheries & Aquaculture Sector. The emphasis on policy reforms and improved management practices is essential to meet the growing demands for food while maintaining ecological balance. The significance of this sector in the larger context of achieving sustainable development goals cannot be understated.

In summary, the year 2022 witnessed the recognition of the Fisheries & Aquaculture Sectors vital role in addressing global food insecurity. This realization prompted the formulation of Sustainable Development Goals by the FAO, underscoring the importance of responsible policies and effective management to ensure the sectors contribution to inclusive and sustainable economic growth.

The 2030 Agenda of ("UNFAO") for Sustainable Development continue to shape the strategies for development of Fisheries and Aquaculture.

"Blue Transformation", a vision for transforming Aquatic Food Systems. Aquatic Foods offer highly accessible and affordable sources of animal proteins and micro nutrients, playing a vital role in the food and nutrition security of many, particularly, vulnerable coastal population.

Through the "Blue Transformation", Aquatic Food Systems can:

• Support the provision of sufficient Aquatic Foods for a growing population in an environmentally, socially and economically sustainable manner.
• Ensure the availability and accessibility of safe nutritious aquatic food for all, especially vulnerable populations and reduce food loss and waste.
• Ensure that Aquatic Food System contribute to improving the rights and incomes of dependent communities to achieve equitable livelihoods; and
• Support resilience in Aquatic Food Systems, which are highly influenced by dynamic human and environmental processes, including climate change.Top of Form

The three core objectives of "Blue Transformation" are as follows:

1. Sustainable Aquaculture expansion and intensification – to support global food security targets and satisfy global demand for nutritious aquatic food and equitable distribution of the benefits.
2. Effective Management of all Fisheries – to deliver healthy stocks and secure livelihoods.
3. Upgraded value Chains – to ensure the social, economic and environmental viability of Aquatic Food Systems and secure nutritional outcomes.

As per the insights provided by the Food & Agriculture Organization (FAO), the coming decade holds a crucial imperative for the sustainable expansion of the aquaculture sector. This expansion is necessitated by the need to bridge the gap in the global demand for aquatic foods, particularly in regions that are grappling with food deficits. This endeavor not only seeks to address nutritional needs but also envisions the creation of fresh income opportunities and employment prospects, thereby fostering economic growth and social well-being.

The strategic spotlight that the FAO places on both Aquaculture and Fisheries underlines their paramount significance in the broader context of global food security and sustainability. This strategic emphasis implies that the demand for aquatic food remains consistently strong, regardless of shifting trends. The term "ever green" aptly characterizes this enduring demand for aquatic food, which is rooted in the nutritional value and accessibility of aquatic products.

Overall, the FAOs call for the sustainable expansion of aquaculture resonates with the need to fulfill the worlds appetite for aquatic foods while simultaneously bolstering economic and employment opportunities. This strategic perspective reinforces the crucial role that the aquaculture and fisheries industries play in addressing pressing global challenges related to food security and livelihoods.

Global Seafood Industry

As per the report Seafood Global Market Report 2023, The global seafood market grew from $ 250.02 billion in 2022 to $ 269.34 billion in 2023 at a compound annual growth rate (CAGR) of 7.7 % The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries has led to economic sanctions on multiple countries, a surge in commodity

prices, and supply chain disruptions, causing inflation across goods and services and affecting many markets across the globe. The seafood market is expected to grow to $349.55 billion in 2027 at a CAGR of 6.7%.

With the limitation on a further production increase via capture fishery due to overfishing, demand for aquaculture has steadily increased over the last two decades. It is expected to grow from the current 47% to 52% by 2029 as per OECD-FAO Agricultural Outlook 2020-2029.

Growth drivers of the seafood industry

Low penetration of seafood in global food supply: Even as ~70% of the globe is covered by water, global seafood industry commands only 2% of the global food supply, implying huge growth potential for the industry. The rising collaboration between farmers, manufacturers, and food service providers is further expected to drive the supply of seafood.

Improving supply chains and distribution infrastructure: Supply chain, logistical efficiencies and rising cold storage network are reducing time-to-market and thereby improving quality, freshness and consequently demand for seafood.

Increasing health consciousness: With rising health awareness, demand for food containing higher protein and essential amino acids is on the rise. Consequently, this is creating a higher demand for seafood products which are rich in these nutrients.

Economic growth and rising income levels: With rising world prosperity and disposable income levels, consumers are exhibiting a willingness to spend higher on nutritionally-dense seafood products.

Increasing preference for seafood over meat products: With meat and meat products often containing harmful pesticides and chemicals, consumers are increasingly shifting their preference to healthier seafood alternatives.

Global Shrimp Market

Increased supply of farmed shrimp kept Ecuador at the helm of global shrimp trade from January to September 2022. During this period China overtook the United States of America as the top import market with large supplies from Ecuador and a wider supply gap with Asian producers.

The cost of aquaculture inputs (feed, fuel and transportation) increased considerably in 2022 causing hardship for shrimp farmers worldwide. Nonetheless, production and exports of farmed shrimp in Asia were moderate during the second and third quarters of 2022 which is the main farming season in this region. Species wise, vannamei shrimp dominated supply. Increased production of farmed black tiger shrimp in Asia is also noteworthy, after years of low black tiger production.

During the first half of 2022, there was a 9 percent rise in US shrimp imports at 441 299 tonnes, which had a custom-declared value of USD 4.2 billion. Of this amount 41 percent was raw peeled shrimp, 32 percent raw shell-on shrimp and 26 percent processed products. Among the top exporters, India and Indonesia lost market shares to Ecuador, Viet Nam and Thailand during the review period.

In general shrimp trade worldwide continued the positive trend during the first half of 2022. In most markets, imports were higher compared with the same period in 2021. In Latin America, Ecuador which is the top producer of farmed shrimp, there continues to be strong growth of farmed shrimp outputs and over one million tonnes production are forecast in 2022.

High imports into China confirm that the country has secured large supplies for the Gregorian and Lunar New Year celebrations in 2023, when consumer demand rises significantly.

The high imports into the United States of America in the first nine months of the year, may reduce imports from Asia during October to December and procure future supplies from the closer-by supply source - Ecuador.

Imports in the European Union will likely be conservative as the Euro remains weak against the US dollar.

On the supply side, Ecuador will enjoy a comparative advantage over Asian suppliers in all three markets (China, United States of America and the European Union). Argentine shrimp fishers forecast smaller catches in 2022 compared to 2021. Stakeholders considered catch levels not entirely satisfactory as vessels landed 36 percent less than during the same period in 2020. In addition, shrimp processing activities could be disrupted for some time due to lack of raw material between seasons.

Prices

Normally, prices of farmed shrimp in Asia adjust during the main production period (May to September) and stabilise by October. This year, however, shrimp prices started to fall from mid-September in the international trade to unprofitable lows for farmers amidst the rising costs of aquaculture inputs.

Aquaculture is one of the fastest growing form of food production in the world. Shrimp dominates aquaculture production by value. The global Shrimp market is estimated to be worth US$ 56.5 billion in 2022 is forecasted to grow to US$ 75 billion by 2028 growing at a CAGR of 4.8% during the review period 2022-28 (Source: Industry Research). Global shrimp production has continued to trend upward and is expected to exceed 5.01 million metric tons (MT) in 2022, a significant increase over the 4.57 million MT grown in 2021, which itself was an increase over the 4.09 million MT produced in 2020, showing consistent growth (Source: Seafoodsource.com). In US, 275 million pounds of shrimp was sold to foodservice channels in 2021, up by 50 million pounds from 2020 (Source: Seafoodsource.com & National Fisheries Institute Global Seafood Market Conference, US, January 2022).

Globally, Asian countries produce the most shrimp – roughly 65% of the worlds shrimp comes from the region. Thats followed by the Americas, which produce around 30%. However, the real acceleration in the Americas, is primarily on account of Ecuador which produced more than 1 million MT in 2021. The International shrimp trade remained steady despite, sharp surge in freight costs from Asia to North America for 20-foot and 40-foot containers (shot up by 500-700% (at USD 13,000 and USD 20,000 respectively) owing to persistent shortages of frozen food containers given increased imports, particularly in the western markets (Source: FAO).

Indian Seafood and Shrimp Industry

Indias sea food export touch an all-time high in the FY 2022-23, grew 26.73% in quantity terms and 4.31% in the value terms over FY 2021-2022. USA the largest importer of Indian seafood followed by China, South East Asia, Japan and Middle East. Frozen shrimp retains the top position as major export seafood item.

India achieved an all-time high export of seafood both in terms of volume and value (both US$ and Rupee) by shipping 17,35,286 MT of seafood worth Rs. 63,969.14 crore (US$ 8.09 billion) during FY 2022-23 despite the several challenges in its major export markets like USA. The country currently exports to over 121 nations, and the Government has prioritized the goal of making India the worlds top seafood exporter (Source: MPEDA). US and China have remained the top two destinations for seafood export for several years. Exports to these countries contributed ~63% of our marine exports in US$ value terms. Over the past year, India has faced headwinds including stricter food import inspections by Chinese authorities, the spread of the omicron variant impacting global demand, and an ongoing shortage of containers and freight rate, but the rising demand domestically is expected to boost the seafood industry in the long-term. (Source: Seafoodsource.com).

The Indian shrimp market reached a value of US$ 8.9 billion in FY 2023. Looking forward, the market is projected to reach ~US$ 12 Billion by FY 2028, exhibiting a CAGR of 11.5% during 2023-2028 (Source: Research and Markets). Several initiatives by the Centre and various State Governments are now playing a crucial role in the growth of shrimp farming aquaculture in India. Pradhan Mantri Matsya Sampada Yojana (PMMSY) which aims at enhancing shrimp production and achieving an ambitious target of producing 1.4 million tonnes by 2024 (Source: The Hindu Businessline). This scheme will help in bringing about ecologically healthy, economically viable and socially inclusive development of the fisheries sector of India. Further State Governments are also promoting the use latest technologies to drive market growth by improving productivity.

Indian Shrimp Export - Country-wise

Sea Food Export - Country wise
Frozen Shrimp Export	FY 2022 -23 (In Thousand MT)	% Market share
USA	275.66	42.09%
CHINA	145.74	22.25%
EUROPEAN UNION	95.38	14.56%
SE ASIA & JAPAN	106.44	16.25%
MIDDLE EAST	31.65	4.83%
TOTAL	654.87	100.00%

Source: pib.gov.in

Indian Aquafeed Industry

The Shrimp Feed consumption in India decreased to 11 Lakhs MTs in Financial year 2022-23 as compared to 12 Lakhs MTs in Financial year 2022. The forecast is that the consumption would further decrease by about 10%-15% in financial year 2023-24. With favourable climatic conditions, presence of significant biodiversity, and strong demand for Indian seafood market, the Indian aquaculture industry has witnessed

exponential growth over the years. This, in turn, has created a significant demand for production and consumption of aquafeed.

Increasing Cost of Raw Materials

The feed business profitability is highly dependent on fluctuating raw material prices as the increase in feed price being in line with increase in inputs is not workable, since most of the time, the cost of the feed major input for Shrimp culture for the farmer and the price beyond a certain level becomes un-affordable to the farmer to continue the Shrimp Culture. Therefore, the Feed producer should exercise utmost care in resorting to increase of Feed price. The other important factor is farm gate price of shrimps which determines the profit margin for the farmer, which ultimately is determined by the Processors depending on international prices. In a nut shell, the raw material prices for feed manufacture play a vital role in this Industry.

Growth drivers for Indian shrimp feed market

Rising Indian shrimp demand in the global markets

Rising awareness among farmers regarding higher shrimp production while improving their nutrient profile

Commercial feed facilitating shrimp production that meets international quality standards and thereby increase quality of shrimp for export

Implementation of modern production technologies enabling domestic shrimp producers to formulate better quality shrimp feed with locally produced raw materials

Backed by the structurally positive tailwinds, Indian shrimp feed industry is estimated to deliver a compounded annual growth rate of 10% during FY 2019-24, reaching production of 1.8 million tonnes by FY 2024.

Company Overview

Establishing its roots back in 1990, Sharat Industries Limited (the Company) stands as Indias oldest integrated aquaculture company. It pioneered Vannamei (white shrimp) breeding and culture in India which played a pivotal role in reviving the countrys aquaculture industry. Today, it has operations across the entire value chain of the shrimp industry and offers world-class products through its four business divisions.

Business Divisions and Offerings

Business Divisions	Capacity	Product Offerings	Unique Features
Hatchery	400 Million Seedlings / Annum	Vannamei seedlings	Specific pathogen-free (SPF) broodstock are used to ensure the best quality and disease-resistant seedlings
Shrimp Farm	2,000 Tonnes Shrimp/Annum	Vannamei Shrimp	Proximity to sea and well-planned inter- locking canals ensure uninterrupted sea- water supply
Shrimp Feed Mill	20,000 Tonnes/ Annum	Brands VANNASTAR, AQUAASTAR	High quality and nutritional shrimp feed widely accepted by farmers
Shrimp Processing Plant	7,500 Tonnes Frozen Shrimps/Annum	13 varieties of raw and cooked shrimp products. Brand Sharat Star	The state-of-the-art plant equipped with sophisticated processing equipment. Ensures antibiotic-free and high quality processed products

Operational Review Geographical Performance

(Rs. in Cr)

Particulars	FY 2023	FY 2022
Revenue from Shrimp Export	241.24	156.63
Revenue from Domestic Operations	91.30	90.41
Total	332.54	247.04

Financial Performance

Key Financial Highlights for the Year

(Rs. in Cr)

Particulars	FY 2023	FY 2022
Total Revenue	336.01	248.10
Total Expenses	326.92	243.60
Earnings before Interest, Tax, Depreciation, Amortisation (EBITDA)	21.91	14.51
Profit after Tax (PAT)	6.54	3.46

Details of significant changes in key Financial Ratios

Ratio	2022-2023	2021-2022	Significant Change compared with previous year i.e. 25% or more	Detailed Explanation for significant change
Current Ratio	1.39	1.35	NA	NA
Debt-Equity Ratio	1.71	1.93	NA	NA
Debt Service Coverage Ratio	1.35	1.35	NA	NA
Inventory Turnover Ratio	4.45	2.91	53%	Optimising inventory management
Trade Receivables Turnover Ratio	5.44	4.56	NA	NA
Trade Payables Turnover Ratio	16.55	7.86	111%	Strategical utilisation of bill discounting
Net Capital Turnover Ratio	8.45	7.33	NA	NA
Net Profit Ratio	2.0%	1.4%	41%	Effective cost management
Return on Capital Employed	18.8%	12.2%	54%	Improved operational ef- ficiency and higher profit- ability from effective utili- zation of capital resources.

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

Particulars	2022-23	2021-22
Return on Net worth	8.3%	4.9%

The Companys return on net worth has increased significantly due to increased export opportunities, sustainable practices enhancing market reputation, efficient disease management ensuring better production outcomes and accumulation of retained earnings over the specific period by the Company.

Diseases arising every year in shrimp farming, technological advancements, seamless information sharing, modern farming techniques, and improved quality of feed are reducing their risk levels. Improving shrimp safety and quality are expected to result in higher product offtake and enable superior product pricing.

Proactive policy support by the government: The central government and Andhra Pradesh government have introduced various schemes, benefits to exporters and farmers, and subsidies to promote aquaculture, food processing, and cold chain infrastructure. These are expected to benefit the entire value chain of the Indian shrimp industry. This will assist in accelerating the industrys exports and significantly enhance its global competitive position.

Benefits of adhering to sustainable practices: The integrated nature of the Companys operations and strict adherence to sustainable farming and food processing enables it to produce safe and high quality shrimp products. This consequently helps in fetching premium valuation for its products in exports market, resulting in superior profitability.

Growth in shrimp farming activity: Leveraging the vast coastline of the country and suitable business conditions, shrimp farming areas are witnessing rapid growth in India. This, in turn, is creating a substantial growth potential for the shrimp feed market.

Increasing domestic consumption: Rising popularity of the frozen shrimp in the Indian domestic market along with the rapid increase in cold chain facilities across the country is expected to increase shrimp demand.

SWOT Analysis Strengths

Our Company is pioneer in Indian Shrimp Industry having over three decades of operations. The company is well-equipped to meet the comprehensive needs of farmers. It has built a strong PAN-India feed dealership network and established partnerships with channel partners, processing units, and hatcheries. Regular interactions with stakeholders ensure seamless integration of operations. The company maintains constant communication with aqua-farmers, offering outreach programs and round-the-clock services through its qualified and experienced technical staff.

Our Company is strategically focusing on exploring new export markets for both shrimp feed and shrimp exports. To achieve these goals and more, our Company has devised a strategy that allows for rapid scaling up of production through high-value capital expenditure (CAPEX) investments. This strategy positions the company to capitalize on the growing demand and opportunities in the shrimp industry.

Weaknesses:

Despite being a significant sector in the Indian economy, the aquaculture industry faces several challenges and weaknesses. These include high production costs, inadequate infrastructure facilities, power supply issues, unregulated cost of raw materials, and shortage of cold storage facilities, and rising cost of ocean freights.

In addition, highly fluctuating raw material costs, dependence on climatic conditions and international developments on Shrimp prices, the Company is put to severe hardship, more often than not, due to factors beyond its control.

While the aquaculture industry and its stakeholders are aware of these challenges and taking measures to address them, government policies are slowly coming into play to help overcome some of these issues. For instance, in the Union Budget 2023-24, the government announced a reduction in customs duty on key inputs for producing shrimp food, which is expected to boost marine exports gradually. Similarly, the ongoing"Productivity Linked Incentive Scheme" for the marine products industry, which provides incentives based on increased sales year after year, has also proven beneficial.

Furthermore, the Government of India is offering grant-in-aid for new processors to cover technical civil works and plant and machinery costs, up to 35% of the total cost with a cap of 10 crores.

Our Company is aware of these weaknesses and challenges and is pro-actively preparing to overcome them through sustained measures. The company remains confident in its ability to address these issues and mitigate their impact on its operations.

Opportunities:

The global seafood market has been witnessing a continuous uptick in recent years riding on recognition of its benefits to health. The growing awareness of the health benefits of seafood, with its nutritional and protein content, presents a favorable environment for increased consumption.

Health experts promoting seafood as a healthier alternative to red meat, which is being associated with challenges to human health, further contributes to the markets potential. Additionally, the rising purchasing power of the middle class and their desire for diverse food choices create opportunities for the seafood industry, including shrimp.

India, with its long coastline, farming community, and availability of land and labor, has emerged as a major player in the global shrimp industry. The Marine Products Export Development Authority (MPEDA), under the Union Ministry of Commerce, has drawn up a plan to achieve marine products exports worth 1 Lakh crore by 2025, showcasing the governments commitment to supporting and promoting the industrys growth.

However, recent international market challenges, such as high inflation in developed nations, the Russia- Ukraine conflict, and lock downs in China, have posed supply chain and price challenges in the short term. As a result, the rapidly growing shrimp export industry in India has come under pressure.

To mitigate the risks associated with excessive reliance on exports, there is a need to focus on promoting and expanding domestic consumption and markets. Our Company has recognized this need and is preparing itself accordingly. The company has taken proactive steps, including product innovations, exploring new distribution channels, embracing e-commerce and home deliveries, and optimizing supply chains. These measures have strengthened the companys position and demonstrated its preparedness in anticipation of market trends.

Threats

The aquaculture industry, including shrimp farming, faces various threats and challenges that need to be addressed for sustainable growth.

The aquaculture industry, specifically shrimp farming, confronts multiple challenges that require effective management for sustainable growth. These challenges encompass intensified competition on both global

and domestic fronts, driven by countries with superior infrastructure and trading ties. Climate-related risks, including natural disasters and climate change impacts, threaten production stability. Production costs and disease control pose ongoing concerns, demanding measures to curb expenses and enhance biosecurity.

Market volatility, characterized by price fluctuations and exchange rate variations, affects profitability. Sharat Industries, recognizing these risks, employs a robust risk management framework tailored to its four divisions. It focuses on ensuring premium product quality by selecting high-quality brood stock and adhering to stringent processes. Geographical diversification in export markets helps mitigate market risks, while effective forex management strategies counter currency fluctuation risks.

The Company also employs customer buyback initiatives and a merchant exporter model to address customer default and operational risks. It remains vigilant regarding external factors such as inflation, trade restrictions, and disruptions. To ensure sustainable growth, Sharat Industries pursues diversification into the domestic market, implements traceability systems, and invests in research and development to develop disease-resistant varieties and improved feed formulations. Through these measures, the company seeks to mitigate risks and promote long-term growth in the aquaculture sector.

Human Resources

The total number of employees as on 31st March, 2023 are 164. The Company acknowledges the significance of human resources in achieving its long-term business goals. Keeping cognizance of this, it has developed a comprehensive set of policies that promote a safe, conducive and productive work environment while ensuring growth opportunities based on meritocracy. This has enabled the Company to build a strong and dedicated workforce. The Company ensures equal access to opportunities in the areas of recruitment, training, career development and advancement regardless of their gender, age, racial/ ethnic background, religion or social status.

The Company continually conducts training programmes at its facilities with the assistance of external experts and agencies. Employees are updated on best practices that are followed across each business division through regular external programmes. Frequent audits for high-quality certification for each facility ensures that the Company is abreast with the latest requirements of the aquaculture industry.

Internal Control Systems and their Adequacy

The Company has adequate and well-defined internal control systems for all its operational and financial functions. It ensures proper maintenance of accounting records, reliable financial reporting and safeguards assets against unauthorised use or disposition and that all transactions are properly authorized recorded and reported correctly. The internal controls are reviewed periodically by internal auditors and the management team, ensuring timely compliance with regulations and accurate monitoring of its adequacy. On the basis of the appraisal, potential risks are identified and preventive measures are initiated depending on the perceived gravity of the risk.

Cautionary Statement

This Managements Discussion and Analysis (MD&A) section is included to adhere to the code of Corporate Governance approved by the Securities and Exchange Board of India ("SEBI"). Though, utmost care has been taken to ensure that the opinions expressed by the Management herein contain its perceptions on most of the important trends having a material impact on the Companys day-to-day operations, no representation was made that the following presents an exhaustive coverage on and of all issues related to the same. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinions expressed here are subject to change without notice. The Company undertakes no obligation to publicly update or revise any of the opinions or statements expressed in this report.