Heritage Foods Limited | 32nd Annual Report 2023-24

133 HERITAGE FOODS LTD | 32ND ANNUAL REPORT 2023-24 MDA STRATEGIC REVIEW STATUTORY REPORT FINANCIAL STATEMENTS Whether enjoyed as a sweet or savoury treat, lassi captivates with its creamy consistency. Rich in lactic acid, vitamin D, protein, and other essential nutrients, lassi offers refreshment and hydration during the scorching summers, boosts energy levels, and contributes to overall well-being. Lassi is truly a favoured choice among Indian consumers. According to IMARC report, India’s lassi market size reached `47.5 billion at the end of 2024 is poised to reach `217.5 billion by 2032, growing at a CAGR of 17.9% during the period. Ice cream and frozen desserts rank as one of the cherished favourites within India’s dairy product spectrum. The sustainable growth of the ice cream sector has been fuelled by the establishment of robust cold chain systems, encompassing temperature-regulated storage facilities, streamlined management practices and skilled professionals. Additionally, the burgeoning food and beverage industry plays a pivotal role in propelling the market forward. IMARC report anticipates that by 2032, the Indian ice cream market will rise to a size of `956 billion, up from `228.6 billion in 2023, charting a CAGR of 17.4%. Fat products Ghee, a concentrated form of clarified butter, is renowned as a culinary staple. It is integral to traditional healing practices and spiritual ceremonies too. Ranking as the second most popular dairy product after milk, ghee is a treasure trove of nutrients, offering calcium, iron, omega-3 fatty acids, vitamins, proteins and carbohydrates. It is known for its anti-inflammatory properties and its role in combating various ailments, bolstering cardiac and cognitive functions. The demand for ghee is on an upswing throughout India, credited to its immune-enhancing benefits, digestive ease, cough relief, and ocular health improvements. IMARC report projects the Indian ghee market to rise to `6,931 billion by 2027, from `3,203 billion in 2023, growing at a CAGR of 8.72% during the period. Butter is acclaimed globally as an indispensable culinary component, essential in crafting an extensive array of recipes. Its universal application in kitchens worldwide has spurred a steady rise in its international demand. In production facilities, cooking butter is meticulously derived from fresh cream to guarantee superior quality. Heritage Butter is distinguished by its purity, with salt being the sole additive. IMARC report forecasts India’s table butter market to surge to a size of `326.8 billion by 2032, up from `77.3 billion in 2023, registering a CAGR of 16.8%. Empowering farmer community Heritage Farmer Welfare Activities (HFWA) prioritize the growth and well-being of the farming community. The company’s unwavering commitment revolves around empowering farmers through mutually beneficial milk procurement, promoting best practices, and offering essential support services. These services include free veterinary check-ups and vaccination drives for cattle aimed at keeping the livestock healthy and productive and enhancing milk yields. Additionally, the company facilitates farm loans, cattle insurance and also supplies nutritious livestock feed. Notably, 2,978 cattle health camps were hosted in FY2024, benefiting 80,133 farmers and enabling the treatment of 1,50,414 cattles. These initiatives contribute to fostering strong bonds between the company and the farming community. Review of Operation The financial year 2024 was marked by another period of commendable performance across different geographies and product categories for the company, with market share gains and improvement in operating margins, as compared to the prior fiscal year. (` in million) Financial year Revenue from operations EBIDTA PAT FY2024 37,343 1,821 910 FY2023 32,087 1,350 659 FY2022 26,429 1,781 1,015 FY2021 24,070 2,497 1,452 FY2020 26,811 1,330* 571* *EBITDA and PAT are before fair value in derivative liabilities of Investments in FRL. Revenue Trends (` in million) FY2024 37,343 FY2023 32,087 FY2022 26,429 FY2021 24,070 FY2020 26,811 Dairy Vertical The dairy vertical stands as the flagship business unit of Heritage Foods, contributing 99.98% to the company’s total revenues. Below is the five-year revenue trajectory for the dairy vertical: Dairy Revenue (` in million) FY2024 37,335 FY2023 32,080 FY2022 26,413 FY2021 24,065 FY2020 26,794 Renewable energy vertical Heritage Foods Limited, in its pursuit of a greener footprint, embarked on a clean energy mission by investing in renewable energy projects, primarily for captive consumption. The company has strategically installed

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