Sumuka Agro Industries Ltd Management Discussions

Your Directors have pleasure in presenting their Report along with the Audited Accounts for the year ended on March 31, 2025. Your Company has continued to grow ahead of the overall FMCG sector. The driving force behind this journey is our determination to improve quality, expand our market reach, and in still innovation in all of our product lines. This year has seen tremendous progress, strategic expansion and milestones for Sumuka Agro. The growth of modern retail formats, e-commerce, and improved distribution channels has made packaged snacks and foods more accessible across the country, including in rural areas.

The Fast-Moving Consumer Goods (FMCG) sector is projected to register a revenue growth of 7 9% in the financial year 2024 25, as per a report released by CRISIL Ratings on July 6, 2024. This growth will be primarily driven by higher volume expansion, supported by a 6 7% revival in rural demand and steady urban consumption growth of 7 8%. Segment-wise, revenue in Food & Beverages and Home Care is expected to grow by 8 9%, while the Personal Care segment is likely to see a 6 7% increase. Operating margins are also projected to expand by 50 75 basis points, reaching 20 21%, aided by stable input costs and improved operating leverage.

The industry is expected to continue growing, driven by increasing consumer awareness, rising health consciousness, and continued innovation. The focus on sustainable packaging is also likely to become more prominent.

The Companys Management is delighted to provide an assessment of the companys performance and future prospects, as well as the opportunities and challenges it faces, in accordance with the Corporate

Governance mandate outlined in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the Year under Review, The Company has applied to Bombay Stock Exchange under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 for the proposed scheme of

Merger by absorption of Gujjubhai Foods Private Limited ("GFPL" or the "Transferor Company") with Sumuka Agro Industries Limited ("SAIL" or the "Transferee Company") on September 06,2023. The merger of Sumuka Agro with Gujjubhai Foods represents a significant strategic

development for our company. BSE has given its approval for this merger, and it is currently being reviewed by SEBI. We are confident that the combination of Sumuka Agro and Gujjubhai Foods will establish a strong presence for us in the consumer sector, leveraging our collective expertise to drive further value. Through this merger, we will be able to strengthen our market positioning, expand our distribution network, and propel our growth in the highly competitive FMCG sector.

(a) Industry structure and developments

Your Company is dealing in FMCG Segment. Currently, the Company is engaged in the business of Trading and Retailing of a wide array of Dry Fruits Products and ready to cook items, nankeen/ snacks products, Himalayan salt and water, selling of packaged foods , etc.

(b) Strength, Opportunities and Threats

Strengths & Opportunities

i. Urbanization in India has led to changes in lifestyle and eating habits, with a growing preference for Convenience foods. Which has fueled demand for packaged snacks and foods. ii. Companies are focusing on innovation in product offerings, including healthier options, new flavors, and convenient packaging. This has helped cater to the diverse and evolving tastes of Indian consumers. iii. Our products is having availability and demand in all the Seasons. iv. Our Products are health and nutritional foods, which are suitable for Changing lifestyle. v. As Large youth population that is more inclined toward ready-to-eat and convenient food options. This demographic shift is a significant driver of the packaged snacks market. vi. The demand of dry fruits is rising because of a combination of factors such as increasing awareness of health needs, increasing disposable income levels, better availability, right packaging, consistent quality, adequate product communication (labelling), newer products such as hazelnuts, pecan nuts, etc, are leading to a healthy growth of more than 10 per cent year on year for the nuts and dry fruits industry in volume terms.

Threats

1. Changes in Regulatory Policies.

2. Increase in raw material prices,

3. Change in weather conditions

4. Unexpected market factor (possible changes in customer preference)

5. Impact of currency fluctuation.

6. Competition from domestic as well as international front

One of the most important issue is taking into consideration the needs & requirement of the customer & developing the services according to them.

(c) Segment-wise or product-wise performance

The Company is operating in single primary business segment of FMCG Products. One significant highlight of this year has been the introduction of Himalayan Salt under our brand. This addition strengthens our product portfolio and aligns with our goal of offering health-focused and premium quality products to our consumers. Furthermore, we have increased our product SKUs from 53 to 76, thereby ensuring that we continue to cater to the diverse requirements of our target audience with a diverse range of offerings. We have a wide and resilient portfolio Varieties of Dry fruits Products, ready to cook items, nankeen/ snacks products, sweet and spices, selling of packaged foods online, etc.

(d) Outlook

In the face of a stimulating operating environment, we delivered another strong all-round performance led by our focus on growing General Trad and Modern Trades. The Company is striving to improve quality and productivity, especially in the promising sectors, and considering the current economic trends and also barring unforeseen circumstances, is confident of achieving gross revenues and operating margins. We take great pride in importing high-quality products from virtually all corners of the globe. Our goal is to provide quality products at reasonable prices.

Further, We are having strong General and Modern Trade Partners. :

(e) Risks and concerns

Sudden changes in government policies, trade restrictions, or tariffs can impact and Primary risk to the business. Volatility in commodity prices is the other risk. More demand of the products would be Seasonal / Festival demand. A possible change in customer preference is also a Risk factor. These risks requires to be agile, innovative, and proactive strategies to mitigate potential negative impacts.

(f) Internal control systems and their adequacy

Internal Control Systems has been designed with proper Organizational Structure with Clearly defined roles and responsibilities to prevent conflicts of interest and reduce the risk of fraud. Active involvement of the

Board of Directors and Audit Committee in overseeing internal controls. Managements Regular identification and assessment of risks related to operations, financial reporting, compliance, and fraud to manage healthy Environment in the Company. We Mitigate risk by Developing strategies to mitigate identified risks, internal audits, and compliance programs.

(g) Discussion on financial performance with respect to operational performance

During the year under review, We are pleased to share that our total sales income from operations has nearly doubled, reaching . 6229.51 lakhs as of March 31, 2025, compared to . 5495.48 lakhs in the previous year.

PARTICULARS	31/03/2025	31/03/2024
Total Sales Income from Operations	6229.51	5495.48
Other Income	0.16	0.55
Net Profit/(loss) before depreciation	351.66	521.93
Net Profit/(loss) before taxation	365.99	538.47
Net Profit/(loss) after tax	273.89	425.77

(h) Material developments in Human Resources / Industrial Relations front, including number of people Employed

Material developments in Human Resources and Industrial Relations have significantly shaped the modern workforce, focusing on improving employee well-being, productivity, and organizational efficiency. The adoption of advanced technologies such as company is in final stage to introduce ERP Software which will streamline recruitment processes, talent management, and performance evaluations, Product production and Supply requirement. Additionally, there has been a growing emphasis on employee engagement, diversity, equity, and inclusion, leading to more robust policies and programs that cater to a diverse workforce.

On the Industrial Relations front, there has been a shift towards more collaborative approaches between management and Employees, aiming to resolve conflicts through negotiation and dialogue

rather than adversarial means. This has resulted in more stable and productive workplace environments. The number of people employed has also seen fluctuations depending on economic conditions, industry trends, and technological advancements, with some sectors experiencing growth in employment opportunities Respecting the experienced and mentoring the young talent has been the bedrock for Sumukas successful growth. we upskill our workforce to equip them with digital and non-digital skills, which further helps honing their existing set of skills.

We believe that our human capital is our greatest strength and is the driver of growth, efficiency and productivity.