Chothani Foods Ltd Management Discussions.

Management Discussion and Analysis is given in a separate section forming part of the Directors Report in this Annual Report.

1. Industry Structure & Development:

India, known as the home of spices, boasts a long history of trading with the ancient civilisations of Rome and China. Today, Indian spices are the most sought-after globally, given their exquisite aroma, texture, taste and medicinal value. India has the largest domestic market for spices in the world. Traditionally, spices in India have been grown in small land holdings, with organic farming gaining prominence in recent times.

Our Company "Chothani Foods Limited" ("Ashok Masala Mart Limited") is growing Indian Food processing Company i.e. manufacturer of whole and blended spices, incorporated in 2014 with an aim to process, produce, manufacture all types of masala and spices, food products in and outside India.

We have started our progressive journey in 1975, when Mr. Shivji Chothani laid the foundation of our company in the year 1975 as a sole proprietary concern namely "M/ s. Ashok Masala Mart" in Mumbai. He began with himself sourcing of raw material and grinding and blending of spices and selling them in retail market. After completion of successful journey of 38 years, we have been established as a limited company to increase the spectrum and volume of operations.

We are presently engaged into manufacturing and supplying of blended spices, whole spices and grinded spices. We have been supplying the traditional and delectable range of spices. We are committed to manufacture and supply different types of spices, meeting highest quality standards in line with customer requirements.

We have two brands "APPU MASALA" & "GAYATRI MASALA" with more than 30 types of Spices and Masalas including instant mix range such as Pav Bhaji Masala, Chaat Masala, Tea Masala, Garam Masala, Sambhar Masala, Punjabi Chole Masala, Biryani / Pulav Masala, Kitchen King Masala and various Powders like Red Chilli Powder, Jeera Powder, White Pepper Powder, Turmeric Powder. We are positioned as professional and built a reliable reputation within Maharashtras spices arena.

2. Opportunities and Threats Opportunities

The Indian spices market is worth INR 40,000 crore annually. Main spices created in the nation incorporate pepper, cardamom, bean stew, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, Ajwain, dill seed, garlic, tamarind, clove, and nutmeg among others. Over the last 6 years, Indian spices industry or market has shown tremendous growth. The nation is the real maker of ginger, turmeric, Chilies and tree types of spices. India has the biggest household showcase for spices on the planet. Generally, spices in India have been developed in little land property, with organic farming gaining quality in recent times. India is the worlds largest producer, consumer and exporter of spices; the country produces about 75 of the 109 varieties listed by the International Organization for Standardization (ISO) and accounts for half of the global trading in spices.

As growing acceptance by consumers, rise in the demand for Spices worldwide, we are constantly striving to expand our line of products and we are always on the lookout for complementary products that will add to our solution bouquet. We would seek product lines, which have better scope for value addition and therefore offer us higher than average margins.


Spices Industry is prone to changes in government policies. Any material changes in the duty and fluctuations in raw material prices may adversely impact our financials. There are no entry barriers in our industry, which puts us to the threat of competition from new entrants. Other factors which may have impact on the performance are intense competitive pressure, rising labour wages and perishable items. It is difficult to estimate the revival period of the Company.

3. Future Outlook

We are focused on establishing and increasing our spices processing facilities as this will allow us to exercise control over costs and the quality of the finished products. We believe that an increase in manufacturing capacity will help us reap the benefits of economies of scale. Higher volumes would enable us to also make competitive raw material purchases and this would eventually lead to an improvement in the price competitiveness of our products.

At present we are getting blended spices from other suppliers but soon we intend to start blending process of spices by acquiring our own blending machines which will be supported by a team of dedicated and experienced professionals who will make sure that all the business activities are accomplished properly in the given time frame.

We are looking forward to enter into global markets and we plan to target countries where we can leverage our track record and experience in India to compete effectively and expand our revenue base.

4. Segment Wise Performance

The Company is engaged in manufacturing of masala and spices. The turnover of the Company for the year ended 31st March, 2020 is Rs. 4,30,93,341.81/ -

5. Risk & Concern

The Company continuously works towards de-risking its business by adopting preventive measures. However, there are certain potential risks being more industry oriented and the management strongly feels the same could be mitigated by having systematic decisions and measures. These Industry Oriented risks are as listed below:

Procurement Risk: Adequate availability of key raw materials at the right prices is crucial for the Company. The major raw material being agro based, availability of same depends on the vagaries of nature. Therefore, any disruption in the supply due to a natural or other calamity or violent changes in the cost structure could adversely affect the Companys ability to reach its consumers with the right value proposition. However, the Company is adopting best possible measures to ensure constant supply at right prices.

Intense competition from unorganized sector: One of the characteristics of this industry is the presence of unorganized sector offering products in loose unbranded form which intensifies competition. The Company has invested significantly in building strong brands which helps differentiate its products.

6. Internal Control System and their Adequacy

The Companys well defined organization structure, documented policy guidelines, predefined authority levels, and an extensive system of internal controls ensure optimal utilisation and protection of resources, accurate reporting of financial transactions and compliance with applicable laws and regulations. The Companys internal auditors review business processes and controls. The Audit Committee of the Board then discusses significant findings and corrective measures initiated.

7. Financial performance and Operational Performance

The company has achieved a total income of 436.90 Lakhs and net profit is at 16.16 Lakhs during the year ended 31st March, 2020 as compared to 490.78 Lakhs and net profit 12.87 Lakhs respectively for the last financial year.

8. Human Resources/ Industrial Relations:

Your Company considers its intellectual capital as its most valuable asset. Personnel policies of the Company are designated to ensure fairness to and growth of all individuals in the organization and aim to provide a challenging work environment. The Industrial Relations was harmonious cordial during the year under review.

9. There were no significant changes (i.e. 25% % or more as compared to the immediately previous financial year) in key financial ratios.

9. Return on Net worth was 2.02% in the previous year while return on net worth in current year is 2.50%


In light of the unprecedented situation owing to the spread of COVID-19, the Company is facing slowdown in the production which is likely to continue for a couple of months. Though there is no significant reduction in demand, the capacity to fulfill the orders has been reduced mainly on account of limited manpower and logistics challenges caused by lockdown restrictions.

The Company is taking necessary steps to ensure smooth functioning. The Work from home facility has been extended to most of the employees. The Government directives regarding health and safety of the workforce at the factories are strictly followed. Adequate stock of important ingredients is maintained. Purchases from alternate local suppliers have been facilitated and efforts are being made to ensure timely dispatches of the finished goods.


Statement made in this report in describing the companys objectives, estimates and expectations are "Forward looking Statement" within the meaning of applicable laws and regulations. They are based on certain assumptions and expectations of future events but the company, however, cannot guarantee that these assumptions are accurate or will be materialized by the company. Actual results may vary from those expressed or implied, depending upon the economic conditions, Government policies and/ or other related factors.