Chothani Foods Ltd Management Discussions

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

1. Industry Structure & Development:

India is the worlds largest spice producer. It is also the largest consumer and exporter of spices. The production of different spices has been growing rapidly over the last few years. As per Survey the Indian spices market size exhibiting a growth rate (CaGr) of 11.15% during 2022-2027. In Chothani, we have sustainable fresh produce to make the best quality products for our customers. Our products are always the best of the season and retain maximum freshness, natural flavor and taste. Chothani Foods Limited commits to supply premium quality products at most reasonable price to clients no matter how vast or small quantity they require. Understanding the needs of our customers, we take special care of the products while packaging to ensure their safety and purity until cargos are parked according to customers options. Also our strong selected forwarders assure us to dispatch goods at affordable prices, on time every time.

We are 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 increasing demand for innovative flavors, authentic cuisines, and ethnic tastes in foods and snacks is augmenting the market for spices in India. Significant growth in the food processing industry along with hectic work schedules and sedentary lifestyles of the consumers are also propelling the demand for convenient food options. As a result, the growing utilization of spices in processed and ready-to-eat food products is further driving the market growth in the country.

Threats

The threats to the segment in which the Company operates are based on the product, price, availability customer service, ease of interaction, brand loyalty and various other factors arising due to competition from other low cost suppliers, severe competition. The marginal increment in the prices of spices, like pepper, ginger, and cardamom, on account of seasonal variation affecting productions, had let manufacturers upscale the packaged price for end consumers. On the other hand, the manufacturers are catering to consumers having a taste for a combination of different spices to penetrate the market with novel products. The company is doing the rightful and needful exercise in these areas and is confident in retaining and expanding its consumer base in the days to come.

3. Future Outlook

Spices have a long and ancient history, especially in India, where they are a part of life and heritage. In every home & in every province across the country, different spices and blends are used to create different and distinctive tastes in dishes. Our outlook remains bullish with our unconditional focus on building customer trust and value. Our unique selling point includes our professional yet very experienced management team coupled with our unwavering focus on providing a quality product.

4. Segment Wise Performance

The Company is engaged in manufacturing of masala and spices. The turnover of the Company for the year ended 31^st March, 2024 is Rs. 800.36 Lakhs.

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.

Credit Risk: The Company has the capability of producing spices and spices products ware to suit the budget and tastes of customers and hence is optimistic of growth in domestic market. It also enjoys customer loyalty.

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 utilization 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 Rs. 801.56 Lakhs and net profit is at Rs. 13.51 Lakhs during the year ended 31^st March, 2024 as compared to Rs. 821.03 Lakhs and net profit Rs. 12.85 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. Key Financial Ratios:

Particulars	2023-24	2022-23	% Change	Explanation
A. Debtors Turnover Ratio	1.60	1.42	12.68	Reason is not required as movement is not more than 25%
B. Inventory Turnover	1.69	1.83	7.65	Reason is not required as movement is not more than 25%
C. Interest Coverage Ratio	2.17	1.99	9.05	Reason is not required as movement is not more than 25%
D. Current Ratio	6.66	2.16	208.33	Due to Increase in Current Assets
E. Debt Equity Ratio	0.05	0.24	79.17	Due to Increase in Shareholders Equity
F. Operating Profit Margin	5.49	5.07	8.28	Reason is not required as movement is not more than 25%
G. Net Profit Margin	1.69	1.57	7.64	Reason is not required as movement is not more than 25%
H. Return on Networth	0.01	0.02	50.00	Due to increase in Shareholder Equity

CAUTIONARY STATEMENT:

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.