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1 CARE Ratings Ltd. Press Release G. D. Foods Manufacturing India Private Limited May 20 , 2022 Ratings Facilities /Instruments Amount (Rs. crore) Rating 1 Rating Action Long Term Bank Facilities 90.00 CARE BBB; Stable (Triple B; Outlook: Stable) Assigned Short Term Bank Facilities 3.00 CAR E A3+ (A Three Plus) Assigned Total Bank Facilities 93.00 (Rs. Ninety - Three Crore Only) Details of instruments/facilities in Annexure - 1 Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of G. D. Foods Manufacturing In dia Private Limited (GDFMIPL) draws strength from the experienced promoters and management team, established brand name and market position, diversified product line along with continuous addition in products coupled with effective sourcing strategy throug h contract farming and moderate financial risk profile . The ratings are, however , constrained by elongated working capital cycle, susceptibility to fluctuations in raw material prices and Rating Sensitivitie s Positive Factors - Factors that could lead to positive rating action/upgrade: • Scaling up of operations, with operating income growing to more than Rs. 300 crores coupled with PBILDT margin around 12%. • Improvement in the overall gearing ratio to below 0.9 0x. Negative Factors - Factors that could lead to negative rating action/downgrade: • Decline in PBILDT margin below 5% on a sustained basis. • Deterioration in the capital structure as marked by overall gearing ratio of above 2.00x. Detailed description of t he key rating drivers Key Rating Strengths Experienced Promoters & Management team. The promoters have almost four - decade long experience in the food product segments and have well established relationships with suppliers and customers. Mr. Brij Mohan Set h, Chairman is a graduate from Delhi Univers ity and Holding Diploma in Industrial Management. He inducted himself in business of catering services in 1980 from where he was motivated to start his own manufacturing unit of food products. He is the founder m ember of the organization is presently respo nsible for the overall direction, strategy, and management of the organization. Mr. Nitin Seth, an MBA graduate from Symbiosis having more than 20 years of experience in the business of food products. He currentl y manages and heads the overall sales, marke ting, and operations of the company. Ms. Chand Seth, a Postgraduate in Economics has additional diploma in food preservation. She is pe development. The promoters are supported by strong management team having rich experience in the various verticals. Established brand name and market position. The company is a prominent player in the food products segment, selling sauces, pickles, ja ms, and instant mixes under the brand ‘Tops’ . The products are mostly marketed in northern and eastern Indian markets with majority revenue from Delhi - NCR region. The company has established network of 130+ super stockiest/direct distributors having PAN In dia presence (although majorly concentrated in Northern India) who in turn supply exclusively company’s product along with chain of 1400+ distributors followed by 1.5 lacs retails outlets and e - retail platforms. Approximately 90% of the revenue is generate its network of super stockiest. Th e company has own sales force of around 400+ personnel covering almost 1500 towns across various States. In addition to that, company also sells directly to Govt. agencies, Modern Trade outlets and hotel/restaura nt/café (HORECA) customers such as Central P olice Canteen, Canteen Store Department (Army), Kendriya Bhandar, BPCL, IRCTC etc. and Private Institutes like Big Bazar, Reliance Fresh, Spencer’s, Reliance Fresh, D Mart, Grofers, Big Basket etc. Company genera lly offers credit period of 30 to 45 days to institutional customers. The company’s products are also available in almost all e - retail shops in India. Diversified product line along with continuous addition in products. The company started with manufacturi ubsequently, the company established its manufacturing units in different locations and started manufacturing several other products like pickles, Jams, Tomato Ketchu p, Sauces, Vinegar, Instant Mixes, Custard Pow der, Jellies, Vermicelli, Cornflakes, etc. H owever, company’s major product is sauces which comprises 47.43% of total revenue in FY22(PY: 45.40%) followed by Pickles which comprises

21.03% in FY22(PY: 18.96%). The company does advertise campaigns via print , television, and social media and currently brand is promoted by 1 Comple te definition of the ratings assigned are ava ilable at www.careedge.in and other CARE Ratings Ltd.’s publications 2 CARE Ratings Ltd. Press Release well - known celebrity Ms. Kareena Kapoor. During the FY22 company has incurred Rs. 12.48 crores (PY Rs. 6.14 crores) on advertisement and marketing. Effective sourcing strategy through contra ct farming Major products of company include sauces and pickles which collectively comprises 68.46% of entire revenue from operation during FY22 same was improved from 64.37% during FY21. For procurement of several vegetables mainly tomato & green chilli w hich are major raw material for sauces and p ickles the company has tied up with farmers for contract farming. Although, farmers are not completely bound to supply their products to company as they can sell in open market if they can realise bett er pricing. The company has long term relationship with farmers mainly in Punjab and enters yearly contracts and prices are negotiated based on input cost plus profit margin Almost 80% of entire requirement of Tomato’s are procured through contract farming. Further, to ensure the crop is similar by all the far mers GDFMIPL provides their own seeds/ saplings. Also, company provide training to farmers on regular interval for improving the crop yields and betterment of farming techniques. Company directly procures other v egetables and fruits from mandis, stockiest, large wholesalers through company representatives. The chemicals used for preservation and processing of products etc. are procured from large wholesalers, stockiest mainly from North India. Rice, wheat, flour e tc. used for vermicelli and noodles are procured directly from manufacturing company or from stockiest. Moderate financial risk profile Company has booked revenue from operations of Rs. 271.86 crores during FY22 against Rs. 250.93 crores during FY21 with growth of 8.34%. However, company revenue from operation remained almost stagnant during the last five years from FY17 to FY21. The growth in revenue of company was initially impac ted by demonetization in FY17 followed by implementation of GST in FY18 and further due to implementation of lockdown to tackle spread of COVID 19 in FY21 as well as in FY22. Further, company is projecting revenue of Rs. 299.47 crores during FY23 with grow th of 10.15% as compared to FY22. Despite of growth in reve nue profitability margins of company was declined during the FY22 marked by PBILDT and PAT margins of 8.08% (PY:9.33%) and 2.54% (PY: 3.07%) respectively. Decline in profitability was on account of rise in advertisement and marketing expenses due to extens ive marketing dur ing FY22. Company has booked advertisement and marketing expense of Rs. 12.48 crores during FY22 against Rs. 6.14 crores during FY21 . The capital structure of the company has also improved on a year - on - year basis, with the long - term debt - to - equity and ove rall gearing ratios of 0.78x and 1.30x as on March 31, 2022, respectively (compared to 0.86x and 1.47x, respectively, as on March 31, 2021). The improvement in the capital structur e was on the back of accretion of profits to the net worth coupled with repa yment of term liabilities. The interest coverage ratio of the company was slightly improved to 3.65x in FY22 (P.Y 3.35x). The total debt to GCA ratio remains in similar line to 6.4 3x, as on March 31, 2022, against 6.19x as on March 31, 202 1. Key Rating We aknesses Elongated Working Capital Cycle Operating Cycle of company remains elongated and in similar lines at 103 days as at March 31,2022 against 101 days as at March 31,2021. Elo ngation in operating cycle was majorly on account of higher inventory days o f 122 days during FY22 (PY: 128 days). Higher Inventory is mainly on account of seasonal nature of vegetables and fruits therefore company has to procure and maintain specific leve l of raw material for the entire year to ensure smooth oper ations. Furthermo re, since vegetables are of perishable in nature they are processed and converted in paste form with the view to preserve them for longer period. Accordingly, majority of portion o f inventories are in the form of work in progress. Average collection period was also elongated during FY22 to 16 days from 9 days during FY

21. However, company receives unsecured deposits from distributors as a security and company provides credit to the extent of security deposit from respective distributors. Un secured Security deposits from distributors outstanding as at March 31,2022 was Rs. 11.87 crores (PY Rs 11.27 crores). Susceptibility to fluctuations in raw material prices. The major raw materia ls for GDFMIPL consist of tomato and red chillies required i n their major pro ducts like sauces and pickles which comprises 68.46% of total revenue from operations for FY22. The prices of these raw materials are fluctuating because of the seasonal availabil ity of tomato and chillies coupled with other factors like i rregularity of cl imatic condition to unpredictable yields, etc. However, they have effective sourcing strategy through contract farming and well managed purchase team to control fluctuation in raw material prices. Competition from the other established pla yers The company faces competition from the other players with well established brands and companies. These include Hindustan Unilever Ltd (Kissan), Nestle India Ltd (Maggi), Del Monte Pvt Ltd and Heinz India Pvt Ltd especially in the retail market. These are global MNCs h aving well - known brands with higher PAN - India market penetration coupled with wide variety of products. Liquidity: Adequate The liquidity position of the company remained adequat e as marked by gross cash accruals of Rs. 13.64 crores for F Y22 against repay ment of Rs. 11.66 crores during FY23.Repayments are further supported by cash and equivalent of Rs. 6.88 crores as at March 31,2022. The average utilization of working capital bor rowings remained moderate at 63.88% during the past 12 month ’s period ending March 31, 2022. 3 CARE Ratings Ltd. Press Release Analytical approach: S tandalone A pp licable Criteria Policy on default recognition Financial Ratios – Non financial Sector Liquidity A nalysis of Non - financial sector entities Rating Outlook and Credit Wat ch Short Term Instruments Manufacturing Companies About the Company G.D. Foods was set up i n 198 4 a s a proprietor ship firm by Mr B.M Seth , Chairman and was later incorporated as private limite d company in 19 97. G.D. Foods Ma nuf acturi ng In dia Private Limited is a p rominent food processing company based at New Delhi. The Com pany operates through i ts flags h ip brand ‘TOP S’ in various segments like tomato ketchup, sauces, pickles, jams, culinary sau c e s, speciali ty sau ces, snack sa uce s, ins tant mixes, corn flakes, noodle s, vermicelli , vinegar, baking powder, custard powder, corn flour & drinking chocol ate. Brief Financials (Rs. crore) 31 - 03 - 202 0 (A) 31 - 03 - 2021 (A) 31 - 03 - 2022 (P) Total operating income 247.62 250. 93 271.86 PBILDT 23.32 23.42 21.97 P AT 5.61 7.70 6 . 8 9 Overall geari ng (times) 1. 67 1.47 1.30 Interest coverage (times) 2.47 3.35 3.65 A: Audited ; P: Provisional Status of non - cooperation with previous CRA: Acuite (SMERA) BB; / Acuite (SMERA) A4 + ; (D o wngraded i n Fe br u ary 2021 ), Any other information: Not Applicable R ating History for last three years: Please refer Annexure - 2 Covenants of rated instrument / facility: Detailed explanation of covenants of the rated instruments/facilities is given in A nnexure - 3 Comple xity level of various instruments rated for thi s comp any : Annexure 4 Annexure - 1: Details of Instruments / Facilities Name of the Instrument I S I N Date of Issuance Coupon Rate Maturity Date Size of the Issue (Rs. crore) Rating assigned alon g with Rating Out look Fund - based - LT - Term Loan - - FY27 46.00 CA RE BBB; Stable Fund - based - LT - Cash Credit - - - 4 4 . 0 0 CARE BBB; Stable Non - fund - based - ST - BG/LC - - - 3.00 CARE A3+ Annexure - 2: Rating History of las t t h r e e y e a r s Sr. No. Name of th e Instrument/Bank Facilities Current Ratings Rating history Typ e Amount Outstanding (Rs. crore) Rating Date(s) & Rating(s) assigned in 2022 - 2023 D a t e ( s ) & R a t i n g ( s ) a s s i g n e d i n 2 0 2 1 - 2 0 2 2 Date(s) & Rating(s) assigned in 2020 - 2021 Date(s) & Rating(s) assigned in 2019 - 2020 1 Fund - based - LT - Term Loan LT 46.00 CARE BB B; Stable 2 F

und - based - LT - Cash Credit LT 44.00 CARE BBB; Stable 3 Non - fund - based - ST - BG/LC ST 3.00 CARE A3+ * Long Term / Short Term 4 CARE Ratings Ltd. Press Release Annexure - 3: Detailed explanation of c ovenants of the r ated instrument / facilities : Not Applicable Annexu re 4: Complexity level of various instruments rated for this company Sr. No Name of instrument Complexity level 1 Fu nd - based - LT - Cash Credit Simple 2 Fu nd - based - LT - Term Lo an Simpl e 3 Non - fund - bas ed - ST - BG/LC Simple Annexure 5: Bank Lender Details for this Company To view the lender w ise details of bank facilities please click here Note on co mp lexity levels of the rated instrument: CARE Ratings Ltd. has classified instruments rated by it on the basis of complexity. Investors/market int ermediaries/ regulators or others are welcome to write to care@careedge.in for any clarificati ons. Contact us Media Contact Name: Mradul Mishra Contact no.: +91 - 22 - 6754 3573 Email ID: mradul.mishra@ careedge.in Analyst Contact Na me: Amit Jindal C ontact no.: 9873003949 Email ID: amit.jindal@careedge.in Relationship Con tact Name: Swati Agrawal Contact no.: +91 - 11 - 4533 3200 Email ID: swati.agrawal@careedge.in Abou t CARE Ratings Limited: Established in 1993, CARE Ratings Ltd. is o ne of the leading credit rating agencies in India. Registered under the Securities and Exchange Board of India (SEBI), it has also been acknowledged as an External Credit Assessment Institution (ECAI) by the Reser ve Bank of I ndia (RBI). With an equitable p osition in the In dian capital market, CARE Ratings Limited provides a wide array of credit rating services that help corporates to raise capital and enable investors to make informed decisions backed by knowledge and assessme nt provided by the company. Wi th an established track record of rating companies over almost three decades, we follow a robust and transparent rating process that leverages our domain and analytical expertise backed by the methodologies congru ent with the international best practices. CARE Ratings Limi ted has had a pivotal role to play in developing bank debt and capital market instruments including CPs, corporate bonds and debentures, and structured credit. Disclaimer The ratings issued by CARE Ratings Limited are opinions on the li kelihood of timel y payment of the obligations under the rated instrument and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell o r hold any security. These ratings do not convey suitability or price for the investor . The agency does not constitute an audit on the rated entity. CARE Ratings Limited has based its ratings/outlooks based on information obtained from reliable and credibl e sources. CARE Ratings Li mited does n ot, however, guarantee the accu racy, adequacy or completeness of any information and is not responsible for any errors or omissions and the results obtained from the use of such information. Most entities whose ba nk facilities/instruments are r ated by CARE Ratings Limited have paid a cr edit rating fee, based on the amount and type of bank facilities/instruments. CARE Ratings Limited or its subsidiaries/associates may also be involved with other commercial transactions with the entity. In case of partnership /proprietary concerns, the rati ng /outlook assig ned by CARE Ratings Limited is, inter - alia, based on the capital deployed by the partners/proprietor and the current financial strength of the firm. The rating/outlook may undergo a change in case of withdraw al of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors. CARE Ratings Limited is not responsi ble for any errors and states that it has no financial liability whatsoever to the users of CARE Ratings Li mited’s rating. Our ratings do not factor in any rating related trigger clauses as per the terms of the facility/instrument, which may involv e acceleration of payments in case of rating downgrades. However, if a ny such clau ses are introduced and if trigg ered, the ratings may see volatility and sharp downgrades. **For detailed Rational e Report and subscription information, please contact us at www.care edge.i