aroma enterprises india ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The global tobacco products market grew from $253.3 billion in 2022 to $266.93 billion in 2023 at a compound annual growth rate (CAGR) of 5.4%. The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries has led to economic sanctions on multiple countries, a surge in commodity prices, and supply chain disruptions, causing inflation across goods and services and affecting many markets across the globe. The tobacco products market is expected to grow to $316.79 billion in 2027 at a CAGR of 4.4%.

Asia-Pacific was the largest region in the tobacco products market in 2022.North America was the second-largest region of the tobacco products market.

The regions covered in the tobacco products market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, and Africa.

COMPANIES OUTLOOK:

Tobacco contributes a major percentage of the total value of commercial crops in India generating huge socio- economic benefits in terms of agricultural employment, farm incomes, revenue generation and foreign exchange earnings.

There is established data that India is a leading tobacco exporter with exports of leaf tobacco and tobacco products contributing around Rs 6,000 crore annually in terms of foreign exchange to the government. Out of the total net exports, the non-manufactured tobacco has a significant share amounting to Rs 4,173 crore and the balance of around Rs 1,830 crore includes tobacco products like cigars, cheroots, cigarillos and cigarettes.

SEGMENT WISE PERFORMANCE:

Currently, the Segment wise report is not applicable to the company as the company has not multiple segments.

STRENGTH AND WEAKNESS:

The company has strong promoter background with rich experience in the segment. Board of Directors of the company is well qualified in the specified field. Composition of Board consists of Executive Directors and Non-executive Independent Directors adding value to the company. The

Company has an extremely cost conscious culture that has resulted in multiple cost management, thus company is trying to cope up with inflationary pressure. The Company has extremely favorable organizational Culture. The company has limited fund to meet the challenges of the markets and to overcome the weakness company has define the strategies to meet the fund requirement.

OPPORTUNITIES AND THREATS:

Tobacco stocks are generally considered defensive. Their betas are usually below the market average and they are typically accorded high Price Stability ratings. Still, their Safety ranks are often Average. Indeed, tobacco companies usually have considerable, though manageable, debt obligations (affecting Financial Strength). India is one of the leading exporters of tobacco and occupies second place after Brazil. The country accounts for 6% by volume and 0.7% by value of the world tobacco trade and 80-85% of our exports continue to be FCV alone.

Tobacco leads to clearing of forests (deforestation) for cultivation, stripping fuel wood for curing and using forest resources for packaging. Thus, damaging the environment. Tobacco depletes the soil nutrients at a very rapid rate and displaces. Thus, becoming a source of pests for other crops.

RISK AND CONCERN:

Despite India being the 2^ndlargest tobacco producer and a major exporter, tobacco control measures in India have always been equally or more stringent than in many developed countries. Extremely high tax rates and constantly increasing tax rates on Cigarettes provide a profitable opportunity for taxevasion by illegal trade in both international smuggled and domestic tax evaded cigarettes.

Moreover, in the current market situation there is a stiff competition from big players with regard to marketing of new brands.

The tobacco epidemic is one of the biggest public health threats the world has ever faced, killing more than 8 million people a year, including around 1.2 million deaths from exposure to secondhand smoke.

MANAGEMENT CONTROL, INTERNAL CONTROL AND INTERNAL AUDIT SYSTEM AND THEIR ADEQUACY:

The company has put in place strong internal control system and best in class processes commensurate with its size and scale of operations.

A well-established multidisciplinary management Audit & Assurance services consists of professionally qualified accountants who carries out extensive audit throughout the year, across all functional area and submits its reports to management and audit committee about the compliance with internal controls and efficiency and effectiveness of operation and key processes and risks.

Some key features of the companys internal control system are:

? Adequate documentation of policies & guidelines.

? Preparation & monitoring of annual budget for all functions

? Management audit department prepares risk based internal audit scope with the frequency of audit being decided by risk ratings of areas/functions. Risk based scope is mutually accepted by various functional heads/process owners.

? The company has strong compliance Management System which runs on an online monitoring system.

? Company has well defined delegation of power with authority limits for approving revenue & cape expenditure.

? Apart from having all policies, procedures and internal audit mechanism in place, company periodically engages outside experts to carry out and independent review of the effectiveness of various business processes.

? Internal audit is carried out in accordance with auditing standards to review design effectiveness of internal control system & procedures to manage risks, operation of monitoring control compliance with relevant policies & procedure and recommend improvement in processes and procedure.

? The audit committee of the board of directors regularly reviews the adequacy & effectiveness of internal audit environment and monitor implementation of internal audit recommendations including those relating to strengthen of companys risk management policies & systems.

HUMAN RESOURCE DEVELOPMENT:

Human Resource Development (HRD) is the framework for helping employees develop their personal and organizational skills, knowledge, and abilities. HRD is one of the most significant opportunities that employees seek when they consider you as an employer. The ability and encouragement, to continue to develop their skills help you to retain and motivate employees.

During The Trying Times Of Pandemic ,Your Company Left No Stone Unturned In Ensuring Proper

Care, Concern, Support And Reaching Out To Its Employees And Associates By Putting ‘People First On Its Agenda. The Camaraderie And Discretionary Efforts Displayed By Work force further Strengthened The DNA Of Your Company In These Tough Times. While It Remained Humane In Its Approach towards People By Continuing Its Benevolent People Policies And Practices, The Very Foundation Of Its Culture That drives The Passion For Winning, Ensured Constant Performance Focus And Results Delivery. Various Initiatives Along The year Kept The Workforce Virtually Connected, Engaged And Motivated. With Continued Focus On Developing Internal people And Leadership Capabilities.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATION PERFORMANCE:

1. The has not earned any total revenue for the year ended on 31st March, 2023as

compared to previous year ofINR 145.40/-.

2. The Net Loss of the Company during the previous year was INR67.42/- compared to Net LossINR 29.19/-of in the Current Year.

3. Price earning per shares as on 31/03/2023 is INR(0.59) on face value of INR 10/- each

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Net Profit Margin ratio, Debt-Equity Ratio and Interest Coverage Ratio:

The company has achieved better top line compared to previous year and in order to maintain the same the company has increased strategic expenses but due to external factors the company could not achieve targeted turnover resulting in substantial decrease in bottom line resulting in significant change in these ratios.

CAUTIONARY STATEMENT:

Statements in this Management Discussion and Analysis describing the companys objectives, projections, estimates and expectations may be forward looking statement within the meaning of applicable laws and regulations. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.

	For, Aroma Enterprises (India) Limited
Date: 05.09.2023
Place: Ahmedabad
	SD/-	SD/-
	Mr.Snehal Patel	Mr.ChiragRawal
	Managing Director	Director
	DIN: 03097321	DIN : 06560139