Chambal Breweries & Distilleries Ltd Management Discussions

As the management of the Company, we present this narrative overview and analysis of the financial and operational activities for the financial year ended 31^si March, 2025. This should be read in conjunction with the financial statements and accompanying notes..

Industry structure and developments

The Company operates in the trading and retailing sectors of Indian Made Foreign Liquor (IMFL] and beer. 1MFL is the largest segment within Indias alcoholic beverage industry and includes whisky, rum, brandy, vodka, and gin. Despite steady growth driven by rising disposable income and social acceptance, the industry is highly regulated. High taxation, production and retail restrictions, and state-controlled distribution systems continue to challenge growth and scalability.

Opportunities

• Growing Population & Rising income: With ~13 million people reaching drinking age each year, the premium segment continues to expand

• Urbanization & Lifestyle Changes: Shifting lifestyles and urban growth are expanding Lhe consumer base for branded alcoholic beverages.

• Product Diversification: Rising demand for flavored liquors and craft spirits offers scope for portfolio expansion.

• Online Liquor Platforms: The emergence of e-commerce in alcohol safes post-pandemic presents new distribution opportunities.

• Foreign Investment & Innovation: Enhanced capital inflow and modern production techniques contribute to product and operational efficiency.

Threats

• Regulatory Restrictions: Stringent licensing, taxation, and state monopolies create operational inflexibility.

• Health Awareness: Growing focus on health may shift demand away From alcohol.

• Economic Instability: Declines in disposable income may affect discretionary spending,

• Cultural and Regional Differences: Acceptance and regulation vary across states, impacting consistent expansion.

• Environmental & Counterfeit Challenges: Rising sustainability costs and illicit alcohol distribution affect brand trust and margins.

Segment-wise or product-wise performance

Due to continued unfavorable government policies, no business operations in IMFL and beer retail were carried out during FYs 2015-16 to 2024-25, However, the management remains committed to pursuing new business opportunities in the sector.

Outlook

The Company aims to optimize cost structures, identify growth channels, and capitalize on emerging market opportunities. Barring unforeseen circumstances, it remains cautiously optimistic about enhancing profitability and stakeholder value in the coming years.

Risks & concerns

The Indian alcoholic beverages industry, white promising, remains exposed to policy risk, high taxation, and licensing complexity. These factors, along with competitive pressure and social trends, require constant adaptability, Nevertheless, India remains a high-potential market due to its demographic and economic profile.

Internal control systems and their adequacy

The Company maintains a robust internal control system that aligns with the provisions of the Companies Act, 2013, Controls are in place to safeguard assets, ensure transaction accuracy, and

support operational efficiency. The Audit Committee periodically reviews internal audit findings and ensures timely corrective actions.

Discussion on financial performance with respect to operational performance:

The financial performance of the Company with respect to operational performance of the company as compared to last year is shown as under:

Operational performance

Financial Performance

The Company continued to earn interest income from financial assets. However, due to increased expenses and no operational revenue, the net loss widened marginally in FY 2024-25.

Human Resource Management

The Company considers human capital as one of its most valuable resources. Performance is monitored regularly and cordial employee relations are maintained. During FY 2024-25, 3 employees were on roll, -md no new employees were hired .

Cautionary Statement

Statements in this report that describe the Companys objectives, projections, estimates, expectations, or predictions may be forward-looking in nature. Actual results may differ materially due to economic comiiti ms, government policies, and other releva nt factors.

Details of Significant Changes In Financial Ratios:

Return on Net Worth