Venkys (India) Ltd Management Discussions

1. Industry Structure and Development :

During the year 2024-25, the global economy remained resilient, expanding at an annualized pace of 3.2%. Global GDP growth is expected to moderate in the coming years with trade barriers in several economies and increased policy uncertainty on several countries investment and spending. Inflationary pressure persist in many leading economies. Ongoing geopolitical uncertainties have created a period of uncertainty and the central banks worldwide have therefore maintained a cautious approach by judiciously adjusting interest rates to deal with inflation and economic growth.

Indian economy continued to demonstrate resilience in 2024-25 and has consolidated its position as one of the fast growing economies worldwide. The real GDP growth estimated at 6.5% for FY 2025. Going forward the Indian economy is expected to soften slightly due to global uncertainties and trade policy shifts. Government of Indias focus in continuing various reforms and deregulation will be crucial in enhancing the countrys competitiveness and sustainable high growth rates. As far as poultry sector is concerned, it continues to witness challenging environment due to high input costs and lower realisations on a continuous basis.

2. Opportunities, Threats, Risks and Concerns :

The poultry sector is well positioned to continue to grow in the coming years. The National Institute of Nutritions recommended level of 180 eggs and 11 kgs of meat as per capita consumption is providing good scope for the future growth, as compared to the present per capita consumption is only 91 eggs and 4.9 kgs of meat. Steady fresh investment in poultry sector and increasing production capacities from the existing players augurs well for the ever growing market for poultry products. However, inadequate capacities in cold storage segment for processed poultry producsts, seasonal fluctuations in demand for livestock and frequent increase in feed prices are the major risk factors for this sector.

3. Segmentwise Performance: a. Poultry and Poultry Products

The Companys major business segment is Poultry and Poultry Products which consist of production and sale of day old broiler and layer chicks, specific pathogen free eggs, processed chicken products and poultry feed. In the financial year 2024-25 this segments turnover was Rs. 1,927.96 Cr. as compared to Rs. 1,755.28 Cr. in the previous year. The segments profit before tax and interest was Rs. 99.51 Cr. as compared to Rs. 47.45 Cr. in the previous year.

b. Animal Health Products

The Company has its animal health products manufacturing facility at Pune. This segments sales turnover was Rs.339.31 Cr. as compared to Rs. 310.05 Cr. in the previous year. Profit before tax and interest was Rs.72.35 Cr. as against Rs. 68.27 Cr.

c. Oilseed

Oilseed segment registered a sales turnover of Rs. 1140.75 Cr. as compared to Rs. 1,777.87 Cr. in the previous year. Profit before tax and interest was Rs. 19.14 Cr. as against Rs. 24.93 Cr. in the previous year.

4. Outlook

During the last three years, Venkys financial performance has been affected mainly due to lower realisations from the sale of poultry products and also due to the decline in the sale from the Oilseed Division. The Company put in place strong infrastructure and production capabilities and is always looking for opportunities to further strengthen the production capabilities through regular expansion projects. Backed by this strength we are hoping to overcome the challenges and improve the financial performance in the years to come. With the expected well-spread monsoon in the current year, the Company hopes the overall scenario will support the poultry sector which will help the Company to perform better.

5. Internal Control Systems and their adequacy

The internal control system is designed to ensure that all the financial and other records are reliable for preparing financial statements and for maintaining accountability of the assets. The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that transactions are authorised, recorded and reported correctly.

Commensurate with the size of operation, your Company has Internal Audit department which continuously reviews the internal control system by an exclusive programme of Internal Audit. The significant findings are then discussed by the Audit Committee of Directors and corrective measures are initiated. The Audit Committee also monitors the implementation of recommendations made by it.

6. Discussion on Financial Performance with respect to Operational Performance:

The Companys turnover registered a decline of 11.28% at Rs.3,351.17 Cr. as compared to

Rs.3,777.39 Cr. in the previous year. The Company registered an increase of 47.49% in profit at Rs. 116.62 Cr. as compared to Rs. 79.07 Cr. in the previous year.

The Company had no long term borrowings as on 31.03.2025. The short term borrowings of the Company during the year decreased by 1.41% from Rs. 167.51 Cr. to Rs. 165.14 Cr. Finance cost of the Company marginally decreased from Rs. 18.18 Cr. to Rs. 16.34 Cr.

Keeping in view liquidity, returns and also safety, the Company has invested certain funds in bank deposit and debt/liquid schemes of mutual funds.

7. Material Development in Human Resources

/ Industrial Relations front, including number of people employed:

In line with VH Groups corporate philosophy, the Human Resource is considered as the most valuable resource in the Company. The focus is on developing a performance culture with high standards of efficiency and innovation. Employee relations at all levels continue to remain cordial. As on 31^st March, 2025 the Company has 5,623 employees

8. Details of Financial Ratios

Details of significant changes (25% or more) in key financial ratios along with detailed explanation for such change as compared to the previous financial year: