Tasty Bite Eatables Ltd Management Discussions

Economic overview

Global economy¹

In CY 2023, the global economy displayed signs of recovery from its past uncertainties including escalating geopolitical tensions, increased geoeconomic fragmentation, disruption in key shipping routes, and tight monetary policies. The growth in the global economy was 3.2% in CY 2023. The slow growth in the reported year was attributed to sluggish economic activities across the world, owing to restrictive monetary policy. While, the rigid monetary stance has acted as a drag on economic activities, it has resulted in lowered inflation levels. The global inflation level was highest in CY 2022 at 8.7% and it further reduced to 6.8% in CY 2023. This decline in the inflation level was facilitated by increased global energy supply along with tight monetary policies by the Central Banks of the major economies. The decline in global inflation reflected a fading of the relative price shocks especially found in the commodities prices.

However, the tight monetary policies and persistent inflationary pressures led to a significant squeeze in consumer spending, particularly in discretionary categories, as households faced increased borrowing costs and reduced purchasing power. Despite these challenges, the global economy showed resilience, with many regions adapting to the new economic landscape and laying the groundwork for more stable growth in the coming years. In addition to this, the advanced economies grew by 1.6% and the Emerging market and developing economies grew by 4.3% in the reported year. In addition to this, the advanced economies grew by 1.6% and the Emerging market and developing economies grew by 4.3% in the reported year.

Outlook

Global growth is forecasted to hold steady at 3.2% in CY24 and maintain this rate into CY25. As inflation eases across most regions, it is expected to see a softening of monetary policy. This shift is likely to lead to a rebound in economic growth, providing a more favourable environment for investment and development. However, it is important to remain cautious about the evolving geopolitical situation, particularly with numerous elections scheduled worldwide. These geopolitical risks, including ongoing conflicts in the Middle East and tensions in Europe, could impact economic stability and growth prospects.

Despite these challenges, high-frequency economic indicators suggest favourable momentum for most major economies. Declining inflation and increased government spending are anticipated to ease fiscal pressures and attract investments for future growth.

Indian economy

Throughout FY2024, India has maintained its position as the fastest-growing major economy amid global headwinds. It has also emerged as an alternative to China and garnered the attention of foreign companies, who are seeking an alternative manufacturing hub outside China. The domestic economy is further being buoyed by a robust financial system that is supporting its growth dynamics.

Forecasts by the National Statistical Office reveal that India has clocked a real GDP growth of 8.2% during FY 2024 against 7% in FY 2023.³ This rebound in economic growth can be attributed to Indias sound macroeconomic fundamentals, rising exports, burgeoning domestic demand and prudent fiscal policies implemented by the RBI. Further, easing supply-side constraints, coupled with the governments consistent emphasis on capital expenditure have facilitated economic growth. A surge in investments in the public sector and a strong banking sector has also contributed to gradual economic expansion over the years. Throughout FY2024, inflationary pressures within the nation witnessed substantial moderation, primarily due to proactive supply-side initiatives implemented by the government.

Outlook

Notwithstanding a volatile global macroeconomic environment, the outlook for the Indian economy remains optimistic. Several high-performance indicators point towards robust growth in the Indian economy. Increased government capital expenditure (capex), strong tax revenue collections, growing domestic demand, higher exports and growth in the manufacturing and construction sectors, as well as the thriving food industry, have helped rebound economic activity. Besides, stable repo rates, government bond yields and healthy foreign exchange reserves point towards macroeconomic stability in the near term. India continues to be a massive consumption-driven economy and along with higher capacity utilisation across sectors, economic growth is likely to continue in the coming years.

Industry overview

Global ready meals industry

The global ready meals market was valued at $143.86 billion in CY21 and it has continued to grow at a CAGR of 5.1%.⁶ Ready meals became a popular choice, especially among working individuals, as the food requires less preparation time and can be easily preserved which makes it available year-round. Additionally, industry key players introducing new flavours, aligning with consumers evolving preferences, contributed to the growth of the industry. Moreover, ready meals not only provide flavours but also balanced nutrients. Additionally, to meet the growing consumer demand for ready meals, the retailers had increased the shelf space in the reported year.

General key drivers behind ready meals are longer shelf life and ease of preparation. Currently, consumer preferences for packaged meals are rapidly changing as people seek higher-quality ingredients, more variety and faster delivery options. With growing awareness about sustainability, manufacturers have adopted sustainable packaging solutions to attract environment-conscious consumers.

The shifting food preferences of consumers towards ready-to-eat food products, driven by the busy lifestyles of working individuals, are currently driving the growth of this market segment. This evolving landscape reflects a growing demand for convenient, high-quality meal solutions tailored to contemporary lifestyles.

In addition, there is a strong preference for reducing GSM (grammes per square metre) and ply in packaging, replacing stretch wrap with eco-friendly materials. These trends have led to the rise in popularity of ready-to-eat takeaways and same-day delivery services, for which customers are even willing to pay a premium price.

Indias ready meals industry

The Indian ready-to-eat food industry is relatively small and underdeveloped compared to the global market. However, as consumers lifestyles change with increasing urbanisation and the rise of dual-income households, the industry is poised for significant growth. The busy lifestyles resulting from urbanisation and increasing household disposable incomes are driving the demand for convenient meal solutions. Consumers are seeking diverse food options, and exposure to Western culture has heightened this demand. Additionally, advancements in food packaging technology and cold chain logistics are further propelling the growth of this market across India.

The industry is witnessing significant growth, with a projected CAGR of 16.4% from FY23 to FY32, expanding from USD 870.43 million in FY23 to USD 2,993.21 million in FY32.⁷ This growth is driven by the increasing preference for ready-to-eat meals made with fresh, natural ingredients that cater to specific dietary needs. The onus is on the industry to create options that can fulfil the evolving needs of Indian households, offering a variety of convenient, healthy and innovative meal solutions that cater to the busy lifestyles of modern consumers.

Indian food service industry

Food service can be broadly categorised into two types commercial and institutional. The commercial sector can be further segregated into large chains and standalone operators. Large chains such as McDonalds, Dominos and KFC operate and serve in multiple locations and cities, offering standardised menus, service, and ambience across their outlets. These chains benefit from brand recognition, standardised processes and economies of scale, which allow them to cater to a broad customer base efficiently.

On the other hand, standalone operators represent the unorganised sector, comprising independent restaurants, cafes, and eateries operating from a single location. These establishments often cater to local tastes and preferences, offering unique dining experiences and regional cuisines. There is significant room for growth for both types to meet the different needs of consumers. While large chains can leverage their extensive networks and resources to expand further, standalone operators can capitalise on their ability to offer personalised experiences and cater to niche market segments.

The size of the India Food service Market is estimated to be 77.54 billion USD in 2024, and it is projected to reach 125.06 billion USD by 2029, with a CAGR of 10.03% during the forecast period.⁸ The expansion of this sector can be attributed to the increasing demand for customised and innovative food menu options tailored to the customers preferences of taste, budget and dietary needs, thereby driving the food service market in the country.

Several major international restaurant chains have entered the Indian market in recent years, attracted by the countrys growing middle class and changing consumer preferences. Brands like Wendys, Tim Hortons, Popeyes, Pret A Manger, CoCo Ichibanya, and IHOP have opened outlets across various cities, offering their signature dishes with an Indian twist. These chains bring global flavors and diverse culinary experiences to Indian consumers.

However, the Indian food service industry has recently witnessed a slowdown in same-store sales growth (SSG), with much of the revenue growth coming from new store additions. This trend reflects a short-term bump as new stores contribute to overall sales, while existing outlets face challenges in maintaining sales momentum amid factors like inflation and changing consumer behavior. Major players aim to double their store count in India over the next 5-6 years, highlighting the long-term growth potential despite the current SSG slowdown.

India has a lower restaurant density compared to countries like the USA, indicating significant headroom for growth. While the USA has around 1 million restaurant locations, Indias organised sector comprises approximately 7 million restaurants, with a large portion being unorganised.⁹ This disparity highlights the potential for substantial expansion in Indias organised food service industry to meet the growing demand.

Food delivery and cloud kitchen industry

Online food delivery services enable people to conveniently order and receive their desired food products right at their doorsteps. Users can browse through a website or app, choose from a diverse selection of available food items and complete their order by making payment through various methods. These platforms offer ease of use, swift delivery and a wide range of options, all of which contribute to their growing popularity in India. Moreover, the rising number of working professionals with higher income levels further fuels the demand for these services. The food delivery industry in India is valued at $5.30 billion as of 2022 and is projected to reach $29.33 billion by 2028, with a growth rate of 33% CAGR.¹⁰

A cloud kitchen is a commercial kitchen space that offers food businesses the facilities and services needed to prepare food items for delivery. Unlike traditional brick and mortar establishments, cloud kitchens enable food businesses to make and deliver food products with minimal overhead costs. The convenience and flexibility that cloud kitchens offer, helps food entrepreneurs thrice in the ever-evolving culinary landscape.

The market is enjoying steady growth, largely propelled by the rising demand for convenient food delivery options and the cost-effective solutions provided by cloud kitchens. Additionally, the rapid expansion of food delivery platforms, driven by the convenience and safety they offer, is reshaping the eating habits of Indians.

With the convenience of ordering meals at the tap of a button and the assurance of safe and timely delivery, consumers are embracing new ways of enjoying their favourite foods. As a result, the market continues to flourish.

Industry trends and drivers

Focus on health: In todays fast-paced world, consumers are actively searching for convenient and healthy food choices. This has sparked a surge in demand for ready-to-eat meals crafted from fresh, natural ingredients, with minimal added preservatives, to ensure balanced nutrition.

Variety of options: These days, consumers seek a broader range of options, readily available in ready-to-eat meals. These meals offer regional specialties, international cuisines and gourmet choices, catering to diverse tastes. Additionally, unique and innovative food options are preferred by both children and middle-aged individuals, further driving industry growth.

Convenience: In todays fast paced world, convenience reigns supreme. Ready-to-eat meals emerge as ideal choices for individuals with hectic schedules, students and families with working women.

Rise of e-commerce: The rise in online shopping and food delivery apps has made ready to eat meals more accessible to people. Consumers can now conveniently order their preferred food and have it delivered right to their doorstep.

Increasing household income: With the rise in income levels, disposable income increases, prompting consumers to willingly spend more on convenience foods such as ready to eat meals.

Socio-cultural factors: The increasing prevalence of dual-income households and the trend towards nuclear families in urban areas are significant socio-cultural factors driving the demand for ready-to-eat meals. These households often seek convenient and time-saving meal solutions due to their busy lifestyles and limited time for traditional cooking.

Company overview

Tasty Bite Eatables Limited is an Indian Company that brings ready to eat and easy to cook ethnic cuisine to your table. It is listed publicly on the National Stock Exchange (NSE) of India and Bombay Stock Exchange (BSE).

1985

Year of establishment

The Company specialises in Indian and pan-Asian meals, offering a product range that includes ready-to-eat items, sauces, organic rice and frozen food. They cater to both individual consumers and food service businesses, with a focus on healthy and convenient options. Their ‘Tasty Bite Xclusive segment features fresh, all-natural ingredients with zero trans-fat and preservatives, catering to various dietary needs such as vegetarian, vegan, gluten-free and organic choices. With availability in the USA, Canada, Europe and across Asia, they are a global brand offering a taste of India and Asian flavours.

Core competencies

Largescalemanufacturing:theCompanyhasinvested in modern manufacturing facilities that allowing it to produce high quality products on a large scale. Their facilities use a variety of technologies which allow them to manufacture a wide range of products.

Focus on innovation: the Company is constantly innovating and developing new products to meet the changing preferences of the customers. It has a strong R&D team that is passionate about devising new ways to improve their products.

Special product lines: The Company offers a wide range of products to cater to the specific needs of their customers. They manufacture organic food and all natural food among others aiming to secure a broad customer base while promoting health and well-being.

Strong financial performance: The Company has a track record of strong financial performance. They have been growing in profits and market share in recent years.

Product quality: The Company manufactures its products using top quality ingredients and conducts quality checks at every step to uphold the highest standards of quality and safety.

Strong Supply chain: An efficient supply chain ensures a sustainable food system for the Company facilitating the flow of products from the point of manufacturing to the point of consumption. This process reduces waste, improves efficiency and promotes transparency throughout.

Trusted Partners: The Company partners with the most leading QSRs (Quick Service Restaurants), cloud kitchen chains and HORECA (Hotels, Restaurants and Caterers) players in India as well as around the globe. This establishes a strong market presence for the Company, and promotes growth.

Competition

The food service industry in India presents a vibrant landscape with numerous opportunities for growth and innovation. Companies that can effectively navigate the competitive environment and adapt to changing consumer preferences will be well-positioned to thrive in this dynamic market. The outlook for industry in India remains positive, with expectations of growth to be driven by demographic changes, increasing urbanization, and digital adoption. The industry seems to be poised for consolidation, with stronger players expanding their reach through expansion and innovation.

The Quick Service Restaurant (QSR) industry in India has shown remarkable resilience and adaptability in the face of fluctuating market conditions over the past few quarters. In the last FY, the sector has maintained a steady growth trajectory, even amidst challenges in terms of competition from Food Aggregators, stagnant SSSG & Cost pressure

Sustainability

The Company prioritizes sustainability by adopting socially responsible practices and implementing ecologically sound processes to protect the environment and conserve energy and natural resources. Committed to creating sustainable practices, they aim to improve the environment by minimising dependency on fossil fuels, shifting energy requirements to renewable sources and reducing their carbon footprint as much as possible.

Strategy

1. Focus on Quality and Food Safety: Consumers prioritize brand trust built on transparent, safe sourcing and handling. By highlighting rigorous quality checks throughout the supply chain (from farm to plate) and safety regulations certification, the Company is positioning itself as a reliable option. This resonates with health-conscious consumers and strengthens brand loyalty in a competitive market.

2. Agile Innovation: The Company constantly tests new flavours, formats, and health-focused options. Leveraging consumer feedback and online trends, it adapts and launch new products. This agility ensures that the Company stays ahead of the curve and caters to evolving consumer preferences.

3. Focus on Customer service: The Company offers multiple, convenient contact options for feedback and enquiries. Actively addressing concerns and offering personalized solutions builds trust and loyalty. It leverages positive online reviews and highlight success stories to showcase their commitment to customer satisfaction, creating a strong brand reputation in an increasingly competitive market.

4. Sustainable business: This involves ethically sourced ingredients, minimising packaging waste and reducing their carbon footprint. Highlighting these efforts through clear labelling and social media campaigns positions the Company as a responsible brand. This resonates with environmentally aware consumers, fosters brand loyalty, and even attracts partnerships with eco-conscious retailers.

Risks and concerns

Competition risk

Other players within the same industry, offering similar products and targeting the same customer base can pose a threat. This can lead to price pressures, hampering profitability. Moreover, customers have a wide variety of choices and preferences, which might change unexpectedly. Therefore, in order to keep its market share, the Company must constantly innovate.

Inflation risk

The rising costs across various aspects of the business, might lead to squeezing the Companys profit margins impacting its chances to remain competitive in the market.

Pricing risk

It is challenging for the Company to set prices of their products so as to maintain their profit margins in the competitive market. Furthermore, input cost fluctuations and supply chain disruptions, may lead to increase in cost of production and consumers are highly price-sensitive. Therefore, the Company should effectively set prices to cover costs and remain attractive to price-sensitive customers.

Product risk

There could be issues related to the development, launch and the performance of the Companys food products. These issues can have a significant impact on the Companys sales, reputation and in worse conditions, it might even lead to product recalls. It might be due to quality issues, shorter shelf life, ingredient sourcing issues etc.

Customer risk

The Company bears the risk of losing out to its customers. This can be due to various factors that would directly impact their sales and profitability. Factor such as change in consumer preferences, reduced brand loyalty, negative customer experiences and multiple products recalls to name a few.

Raw material risk

There are challenges and risks associated with acquiring ingredients and supplies that are used to make the products. These challenges can impact both production costs and production quality and might even lead to supply chain disruptions and hamper food safety. This might lead to rise in prices impacting their overall profits.

Operational risk

There are chances of disruptions occurring within the internal processes of the organization that can negatively impact production and efficiency which in turn, can harm profitability. These disruptions can occur across various aspects of the Companys operations such as issues in production, shortage of labour, supply chain issues, problems in inventory management, natural calamities and non-compliance with regulations.

Currency risk

There is a risk of fluctuations in foreign exchange rates to negatively impact the performance of the organisation. This can lead to problems in export/imports, importing raw materials for production etc.

Supply chain risk

There could be a potential for supply chain disruptions at any stage of the process that connects the manufacturers to the customers. These disruptions can significantly affect the Companys ability to produce and deliver their products, leading to loss in sales and hence a loss in revenue. Prolonged inability to meet product demand may also result in a loss of market share.

Insurance risk

There is a risk of potential issues related to obtaining and maintaining sufficient insurance coverage cropping up. While insurance is crucial for protecting the Company financially against various threats, certain factors can impact the cost and effectiveness of this protection. Different types of insurance, such as product liability and product recall insurance, are needed to address specific risks.

Legal Risk

India has complex food safety regulations. Failing to comply with labelling standards, hygiene protocols, or facing contamination issues can result in hefty fines, product recalls, and reputational damage. Strict adherence to food safety measures and clear communication are crucial to mitigate these risks.

Human Risk

In todays competitive market, there is a shortage of skilled workforce. Retaining those skilled workers requires offering competitive wages, benefits, and opportunities for growth. High employee turnover can disrupt operations, impact product quality, and harm customer service. Investing in employee well-being can mitigate these risks and attract top talent.

Quality control risk

There is a risk of a potential loss in efficiency in procedures that are responsible for ensuring the safety and quality of the products. These inefficiencies can have a severe consequence which might lead to reputation damage, product recalls and heavy financial losses.ns.

Result of operations

Business	Revenue	Product	Key markets	Customers
Consumer Business (RTE)	3,938.40	Ready to eat	USA, Canada, UK, Australia, Germany, France	Marketed through affiliates to retail customers
Food service Business (FFP and sauces)	1,434.67	Formed frozen products and speciality sauces	QSRs cloud kitchen in India, South East Asia and Middle East

Financial highlights

Particulars	FY 2023-24	FY 2022-23	% growth
Revenue from operations	5,403.20	4,756.63	14%
Other income	178.76	137.66	30%
Total income	5,581.96	4,894.29
EBITDA	921.08	777.33	18%
Finance Cost	70.01	94.84
Depreciation	295.66	274.82
Income Tax	140.24	105.57
Profit after tax	415.17	302.10	37%

Company revenues grew by 14% over the previous year. The export business grew 17% and touched a revenue of INR 4,036.81 Million.

The Tasty Bite Food Service (TFS) business grew 4%, primarily due to traction in international business and turnaround of QSRs. Their Food Service Business (TFS) touched revenue of INR 1,434.67 Million.

Overall revenue from both businesses touched INR 5,581.96 including other incomes.

EBITDA landed at 16.5% of revenues (growth of 18% over the previous year on account of higher revenues, lower material cost and higher export incentive income in current year).

During FY24 Profit before tax (PBT) was INR 555.41 million as against INR 407.67 million in FY23. Profit after tax increased by 37% to INR 415.17 million from INR 302.10 million in FY23.

Other comprehensive income records the remeasurement gains/ losses on our defined benefit plan (gratuity) and the mark to market gain / loss on the effective portion of cash flow hedges taken by the Company to hedge its forex exposure, net of taxes. There was an actuarial loss, net of taxes of INR 3.4 million as compared to loss of INR 4.6 million in FY23 and mark to market gain, net of taxes on effective portion of cashflow hedges of INR 24.2 million as compared to loss of INR 31.8 million in FY23.

Financial ratios

Particulars	FY 2023-24	FY 2022-23
Current Ratio (in times)	2.20	1.48
Debt-Equity Ratio (in times)	0.12	0.31
Adjusted Debt Equity Ratio (in times)	0.09	0.25
Debt Service Coverage Ratio (in times)	5.28	1.82
Interest Coverage Ratio(in times)	8.93	5.30
Return on Equity Ratio(in Percentage )	15.7%	12.4%
Inventory turnover ratio (in times)	6.09	6.20
Trade Receivables turnover ratio (in times)	9.24	8.46
Trade payables turnover ratio (in times)	8.86	7.37
Net capital turnover ratio (in times)	5.49	7.95
EBIDTA Margin(in percentage)	16.5%	15.9%
Net profit ratio (in percentage)	7.4%	6.2%
Return on Capital employed (in percentage)	19.6%	15.2%
Return on Net Worth (in percentage)	14.5%	12.4%

Opportunities and threats

Opportunities

Growth of online grocery shopping: Consumers are becoming increasingly comfortable buying groceries online. The Company can ramp up its presence on e-commerce platforms and partner with delivery services to further boost up its sales, and hence its profitability.

Focus on the youth generation: This generation prioritizes health, convenience, and global flavours. The Company can leverage its international cuisine options and explore innovative flavour profiles to attract them.

Focus on organic and clean label: The demand for organic and natural ingredients is rising. The Company can highlight its existing organic options and explore expanding this segment.

Single-serve packaging: Busy lifestyles create a demand for convenient, single-serve meals. The Company can introduce portion-controlled options for on-the-go consumers, to provide more options and to reduce wastage simultaneously.

Threats

Rising ingredient costs: Inflation and supply chain disruptions can increase the cost of raw materials, thus impacting the Companys profitability.

Potential for higher operating expenses: Expanding into new markets or product lines may involve increased marketing and distribution costs.

Increasing competition and entry of large players:

The meal delivery services market is becoming increasingly competitive with the entry of major players. These new entrants, along with existing companies, are leveraging innovative logistics solutions, strategic partnerships and aggressive expansionstrategies,posingasignificantthreattothe Companys market position and growth prospects.

Sources and uses of funds

As at 31 March 2024, the Company had two long - term foreign currency loans - one from MUFG bank and second from Mars Nederlands with a total outstanding balance of USD 4.06 million (INR 338.57 million).

These loans have maturity of five to eight years with an interest cost of 3 months Libor/ SOFR + 0.90% on loan from bank and 2.2% fixed on loan from Mars Netherland. The Company has entered into an interest rate swap (IRS) agreement with Japanese banks to convert the floating rate liability of these loans into a fixed rate liability. As at 31 March 2024, the IRS has a mark to market gain of INR 0.09 million.

During the year, the Company had also availed short-term working capital borrowing in the form of packing credit in foreign currency from Mizuho Bank for meeting its working capital requirements. As at 31 March 2024 Company has repaid the entire short term working capital loan.

Total net property, plant & equipment (including capital work - in - progress and Intangible assets) stood at INR 2,134.40 as against INR 2,097.55 million in the previous year. Assets that were capitalized during the year (net of disposals) totalled INR 542.20 million.

Supply chain

Managing supply chain uncertainties in the face of global disruptions is the major challenge that is being faced by any manufacturing organization today. With Global Food Regulations becoming more and more stringent, the Company has been proactive in managing not only the sourcing complexity but also preparing and working towards a roadmap to being compliant in advance of the proposed legislative changes.

This was made possible by working very closely with its network of supplier partners as guided by Mars Mutuality Principle to help design and implement a sourcing roadmap that works towards the best interest of its consumers.

As global inflation continues to impact consumers globally, the Company has undertaken several value leadership initiatives to optimize the sourcing costs to minimize the inflation impact for its customers. This has been made possible by several strategic initiatives in the field of freight optimization through a mix of long term and spot contracts, on time price hedging of key ingredients and value engineering of key packaging.

Human resources

At Tasty Bite, the HR practices are designed to create an inclusive, engaging, and productive work environment that supports both individual and organizational growth. The Company has implemented strategic approach to talent acquisition, ensuring it attracts and retains the top talent for key positions through a comprehensive onboarding and continuous development opportunities.

The Companys Human Resource Department is committed to positively developing employees with an emphasis on productivity, quality, and customer satisfaction.

Its competitive compensation packages and comprehensive benefits reflect the commitment to its employees well-being.

The Company fosters a positive workplace culture through regular engagement initiatives, open communication, and a strong focus on diversity. Approximately 65% of the employees working on the shop floor are female associates. The Company keeps them motivated and engaged through various capsule learnings, fun games, and celebrations.

The Companys performance management system emphasizes on continuous feedback and goal alignment, empowering employees to achieve their best.

At the heart of its HR practices is a dedication to creating a supportive and dynamic environment where every employee feels valued and has the opportunity to thrive.

Quality

The Companys mission for quality is "rise beyond certifications". This essentially means that the Quality Management system is itself accountable to uphold excellence across their entire operations, encompassing quality standards for design, procurement, manufacturing, sales, distribution and actively addressing consumer and customer feedback. They are dedicated to producing top-tier products, prioritizing stringent food safety measures and adhering to all legal and regulatory standards in their markets.

In keeping with industry requirements, the Company continues to be certified for the following certifications:

ISO-14001:2015(EnvironmentalManagementSystems)

ISO 45001 (Occupational Health and Safety)

FSSC 22000 (Global Standard for Food Safety System Certification)

India Organic NPOP USDA Organic NOP Indonesia Halal MUI HALAL India Kosher

The Company also adheres to the highest levels of compliance with CT - PAT (Customs Trade Partnership against Terrorism) standards, which gives the Company an advantage for smooth exports to US, our most important export market.

Compliance, finance, accounts and internal financial controls

Finance and accounting teamwork with all the other functions to continually increase the intrinsic value of the business and institute strong and effective financial and management control systems in day-to-day operations.

The Company attaches significant importance to frequently testing internal control systems, risk assessment and management of operating risks. These risks are actively managed by the Management Committee through robust reviews and strong internal processes. This internal control structure also has considerable oversight and is monitored by an external set of auditors, both statutory and internal. The Companys internal controls commensurate with the nature of the business and size and complexity of its operations.

Some significant aspects covered in the internal control framework include:

Standard Operating Procedures and Risk Control Matrix for all business processes to ensure effective internal financial control.

Oversight by an Audit Committee carried out by an experienced and qualified firm of Chartered Accountants.

End to end integration of ERP system across supply chain, manufacturing and sales processes

Review and approval of annual operative and capital expenditure budget and monthly monitoring of actual spend.

Regular review of key business risks such as new product development, foreign exchange management, commodity risk management and financial reporting.

Legal framework with respect to compliances applicable to the Company. The Company has implemented compliance tools in both the factory and the head office.

For overall supervision of controls, the Company has a Management Committee (MCom) to take key business decisions.

The statutory auditors have issued an unmodified audit report The Audit Committee and Independent Directors believe that the internal financial control commensurate with the nature and size of the organisation and complexity of the business.

Cautionary statement

In accordance with relevant securities laws and regulations, comments in the Management Discussion and Analysis that describe the Companys goals, plans, estimates, or expectations may be deemed to be "forward-looking statements." Actual outcomes could significantly vary from those that were stated or indicated.

Economic conditions affecting supply and demand, price conditions in domestic and international markets where the Company operates, competitive pressures in these markets, changes in governmental regulations, tax laws and other statutes, as well as incidental factors, are significant variables that could have an impact on results.

Appreciation

The Directors of the Company would like to express their sincere gratitude for the co-operation received from banks, government agencies, clients, vendors and suppliers during the year. They also acknowledge the role played by affiliate markets in expanding the Companys presence in foreign markets. Alongside, they appreciate the constant patronage received from diverse stakeholders and all parties involved in the Companys operation.

The Directors present the Corporate Governance Report of your Company for financial year 2023-24. This report specifies the systems and processes followed by your Company to ensure compliance of corporate governance requirements under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 (‘Listing Regulations) and the Companies Act, 2013 (‘Act) and its commitment to conduct business in accordance with sound Corporate Governance aspects.