Aditya Consumer Marketing Ltd Management Discussions

Retail Industry Overview

India retail sales expansion is slowing down after a surge in spending across a gamut of segments - from clothes to cars- in the post-pandemic period, triggered by revenue shopping.

POST PANDEMIC, SALES DROPPED IN RETAIL INDUSTRY

Every big retailer either for clothing or service or food & beverages saw their slowest ever sales growth in India during FY24, excluding the pandemic year.

The retail sales growth rate fell every month in the previous fiscal, reflecting weak consumer sentiment across segments such as apparel, footwear and quick service restaurants. Last fiscals comparatively slower 4-7% growth rate sustained this year as well, with April seeing a 4% rise, Retailers Association of India (RAI) said after a survey of 100 retailers.

Retail sector have given its best to the customers during pandemic and post pandemic also and Industry Executives and analyst hope so that market condition will recover in coming fiscal year and we will achieve our goal of expansion and profit in coming fiscal years.

Overview: Operations, Customer and Marketing

The Company continues to operate with three segments of retailing supermarkets, Beauty and wellness and hospitality under various brand names: -

Our.Segments

Companys focus is on Consumer goods, food, fashion and beauty & wellness. Over the years, the Company has also sharpened its focus on leveraging technology to process and use the large amount of consumer data that it generates as well as develop omni-channel capabilities. Many of the capabilities thus developed proved to be useful during the pandemic conditions to retain customers and attract business during the lockdown also and other uncertainties.

While the Company continues to invest in building its brands, during the year, the Company built new capabilities for brand building and customer engagement on digital platforms and social media

A Quick Review of Financial Performance for the FY 2023-24

> Revenue of Rs. 93.36 Crore

> Net Loss of (Rs. 3.07) Crore

> Earnings Per Share- (2.10)

> EBITDA-(Rs.0.61) Crore

Business Outlook Strengths

The Company believes that following are some strengths of the Company which provides it competitive advantage.

Strong management team

We have an experienced professional management team possessing strong capabilities in various aspects of retail business and strong relationships with its various stakeholders as well as in-depth knowledge of the localities in which the Company has expansion plans. Our management team is complemented by a committed work force which enables us to operate, synergize and integrate our front and backend operations efficiently.

Strong Systems and Process

We believe that our systems and processes are our major strength. The Company has strong focus on systems and processes. We continue to invest in our front and backend processes and systems and believe that continuous investment in process, systems and technology results in substantial growth. Our investments in systems and processes give us the vital edge to be able to predict consumer trends and requirement to hold inventory at optimum levels and to control the financial performance of the Company.

Business Strategy

Over the last few months, we have put a lot of effort in getting our systems and processes sorted and today we are amongst the best on that front. Now our next challenge is to become the preferred shopping destination. In this area, the Company plans to focus on following:

1. Expanding our product and format range - We intend to cater to various segments of consumer in Bihar by providing extensive product range through various lines of the business and formats of retail trading.

2. Customer Satisfaction - The Company imparts special training to its employees and sales executives to ensure that quality service is provided to customers.

3. Improving the store level profitability - To devise innovative Revenue Share formats for controlled operational expenses e.g., low rental cost.

4. Maximum utilization of I.T. for low operational overheads and better supply chain benefits.

5. Streamlining the backend operations.

6. Increasing presence in cities where the Company already has commercially viable operations & the cities which reflect high potential and commercial viability.

7. Focusing on high margin/high volume products.

Risks and concerns

Execution: Although the Industry growth potentially appears to be immense, we believe the key risk to our growth is execution risk. The Company has a strong management team and we believe it would be capable enough to execute varied retail trading formats.

Employee retention: With the entry of new players and Indian economy back on growth path, we believe that employee retention has become very important.

Low margins due to increase in competition: With the entry of large number of new players, the competition in the retail industry has become intense, resulting in pressure on the margins and introduction of new promotions/discount schemes to attract and retain the customers.

Internal Controls and their Adequacy

The Company maintains adequate internal control systems, which provide among other things reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Companys assets.

The Internal Auditors have introduced several objective tools to assess strengths of our internal controls as also, identify areas where it needs to be further strengthened. The scope and authority of the Internal Audit are well defined in the internal audit charter, approved by the Audit Committee. Internal audit plays a key role in providing an assurance to the Board of Directors of adequate internal control system. The audit committee at its meetings reviewed the reports of the internal auditors as well as the Risk Management process of the Company.

The Company has also ensured:

> Effective and productive use of human resources;

> All transactions are approved and properly reported;

> Reliability and consistency of accounting data.

Material Developments in Human Resources/lndustrial Relations Front, Including Number of People Employed:

The Company has continued to give special attention to Human Resources/lndustrial Relations development. Industrial relations remained cordial throughout the year and there was no incidence of strike, lock-out etc. Functional training and employee engagement were given adequate weight age during the year to enhance employee productivity and morale. Re-training on occupational, health, safety and environment were carried out in both the manufacturing facilities to improve awareness.

The Company would like to sincerely appreciate the valuable contribution and support of employees towards the performance and growth of the Company. The management team comprises of professionals with a proven track record.

Disclosure of Accounting Treatment:

The financial statements for the year ended 31^st March, 2024 have been prepared as prescribed in accounting standards and there is no change in treatment of the said accounting standards. Therefore, no explanation by the management is required for the same.

Details of Significant Changes in Key Financial Ratios & Return on Net Worth