Euro India Fresh Management Discussions


Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosures Requirements), Regulations, 2015, the Listed Companies are required to furnish Management Discussion and Analysis Report (MDAR) as a part of Directors Report to the Shareholders.

This section of Annual Report has been included in adherence to the spirit enunciated in the code of Corporate Governance approved by the Securities and Exchange Board of India. Though, utmost care has been taken to ensure that the opinions expressed by the Management herein contain its perceptions on most of the important trends having a material impact on the Companys operations, no representation is made that the following presents an exhaustive coverage on and of all issues related to the same. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinions expressed here are subject to change without notice. The Company undertakes no obligation to publicly update or revise any of the opinions or statements expressed in this report, consequent to new information, future event, or otherwise. This report should be read in conjunction with the financial statements included and the notes attached.

As per Schedule V of SEBI (Listing Obligations and Disclosures Requirements), Regulations, 2015, Annual Report shall contain the below points in the Management Discussion and Analysis Report (MDAR):

? Industry Structure and developments.

? Opportunities and Threats.

? Segment- Wise or Product- wise performance.

? Outlook.

? Risk and Concern.

? Internal Control System and their adequacy.

? Discussion on Financial performance with respect to operational performance.

? Material developments in Human Resources/ Industrial Relations front, including number of people employed.

1. INDUSTRY STRUCTURE AND DEVELOPMENTS:

Incorporated in 2009, we are a known brand of Gujarat supplying wide range of packaged snacks and fruit beverages products under our flagship brand "Euro - Fresh Khao Healthy Raho". Your Company is engaged in manufacturing of chips, extruder snacks, namkeen, farali, extruder snacks, Chikki, fruit beverages and packaged drinking water, of which, chips, getmore (a variety of extruder snacks) and packaged drinking water is manufactured directly by us and farali, extruder snacks and fruit beverages is manufactured by group entities on our behalf. In case of namkeen, it is manufactured by your company as well as its group entities on its behalf.

The products manufactured by the company are tailor made to suit Indian palate. Your company‘s product ranges from a wide variety of flavoured chips to beverages. Some of well known products are Euro Chips, Euro Getmore, Euro Farali Wafers, Euro Namkeen such as moong dal, peanuts, khatta meetha, mixtures, mamra, farali chiwda, extruder snacks such as Euro Funfill, Ringoli, Bubbles, Puffs, Euro Wheels. In beverages, the company supply fruit juices by the name of Euro Fresho and Euro Lemoni. Its packaged drinking water is marketed under the name of Euro Aquaspa. Its products come in different flavours as per market demand, and are available in different type of packaging such as tetra packs (brick pack) and pet bottles, etc. Being engaged in FMCG industry, supplying qualitative products is of utmost importance in our industry and we ensure that we adhere to high quality standards at all times. Products comply with requisite food safety standards, including ISO and FSSAI norms.

The registered office and manufacturing facility is situated at Plot No. A 22/1, G.I.D.C. Ichchhapore, Surat - 394510, Gujarat. Spread over 7,528.40 sq. metres, manufacturing facility is a well-planned facility with requisite machineries and state of art infrastructure. The company have fully integrated facility for manufacturing different varieties of snacks food items. This facility is also equipped with necessary equipment for manufacturing of beverages, manufacturing of which is undertaken by its Group entity on behalf of the company. The company also have QA/QC laboratories, in house research and development facilities, sample control room, canteen and storage facilities under one roof. Such integration of operations has helped achieve better efficiency and economies of scale.

Distribution and marketing plays a key role in our business operations and at present, company have 5 consignee depots, 93 super stockist and over 280 distributors. With this, we have covered more than 10 states in India and further are in process of setting up our distribution networks at Goa and Chattisgarh. Company also have a dedicated sales and marketing team situated at Mumbai and Delhi respectively. Currently we have covered most of the western and northern regions and are focused towards customers based in urban and semi urban markets. Customer satisfaction has been one of the key strengths of our Company and has enabled us built a position in FMCG sector.

It is our aim to make our brand "EURO" a household brand name and make appetising products for all class of buyers. We shall continue to focus to penetrate Indian markets by supplying delectable products at competitive prices.

The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year. In India, the food sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition, particularly within the food processing industry. The Government of India has been instrumental in the growth and development of the food processing industry. The government through the Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments in the business. It has approved proposals for joint ventures (JV), foreign collaborations, industrial licenses, and 100 per cent export-oriented units.

2. OPPORTUNITIES AND THREATS:

2.1 Opportunities:

• Indian and multinational FMCG players can leverage India as a strategic sourcing hub for cost- competitive product development and manufacturing to cater to international markets.

• Indian consumers are highly adaptable to new and innovative products.

• Creating strong distribution networks and skills to deliver to the last mile.

• Low penetration levels offer room for growth across consumption categories.

• Increasing demand for healthier foods.

• Major players are focusing on rural markets to increase their penetration in those areas.

2.2 Threats:

• Spending on advertisements is aggressive.

• Huge investments in setting up distribution network and promoting brands.

• Saturated fast-food markets in the developed economies.

3. SEGMENT WISE OR PRODUCT WISE PERFORMANCE:

The Company is engaged in the business of manufacturing and selling of processed food and beverages which is considered to be the only reportable business segment on Segment Reporting. The Company mainly operates in India and there is no other significant geographical segment.

4. OUTLOOK:

FMCG is the fourth largest sector in the Indian economy. FMCG Market is very much expand day by day in the country like India. The Food sector depends on its taste and Quality, the FMCG known for

the Fastest Moving consumer goods. The company is drastically improving their performance day by day for achieving the sales goals. The Company has its own outlet in majority of the cities such as Surat, Ahmedabad, Bhavnagar, Mumbai and many mores. The Company export in various counties.

5. RISK AND CONCERN:

Risk is in itself sound as a huge responsibility for the organization to identify, evaluate, access, formulate and reduce it. It is the internal as well as external part of the Organization, Risk factor works in the day- to-day operations of the Company. There are different kinds of Risk to evaluate and reduce i.e., Market risk, Liquidity Risk, Operation Risk, Management Risk, Interest rate risk etc. The Company has taken necessary steps to overcome the Risk factor and helps the organization to run smoothly.

6. INTERNAL CONTROL SYSTEM:

The Company has in place an adequate system of internal control commensurate with its size and nature of its business. These have been designed to provide reasonable assurance that all assets are safeguarded and protected against loss from unauthorized use or disposition and that all transactions are authorized, recorded and reported correctly and the business operations are conducted as per the prescribed policies and procedures of the Company. The Audit committee and the management have reviewed the adequacy of the internal control systems and suitable steps are taken to improve the same.

7. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year under preview, the Company has earned sales income Rs. 14,297/- (Previous Year Rs. 11,643/-) and other income Rs. 12 (Previous year Rs. 24). The Total revenue Rs. 14,309 (Previous year Rs. 11,667).

Profit before Tax (PBT) was review Rs. 171 and Profit after Tax (PAT) was review Rs. 121 (Previous year Rs. 139).

Particulars For the year Ended March 31, 2023. For the year Ended March 31,2022.
Revenue from operations 14,297 11,643
Other income 12 24
Total revenue 14,309 11,667
Profit before exceptional items and tax 171 217
Less: Exceptional items and tax - -
Profit before tax 171 217
Less: Tax expenses
Current tax 45 41
MAT Credit Availed - -
Deferred Tax 5 37
Net Profit/(loss) after tax 121 139
Earnings per share (basic) 0.49 0.56

8. HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS:

Your Company firmly believes that its human resources are the key enablers for the growth of the Company and important asset. Hence, the success of the Company is closely aligned to the goals of the human resources of the Company. Taking into this account, your Company continued to Invest in developing its human capita and establishing its brand on the market to attract and retain the best talent. Employee relations during the period under review continued to be healthy, cordial and harmonious at all levels and your Company is committed to maintain good relations with the employees.

9. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Interest Coverage Ratio

The companys Interest Coverage ratio of 2.35% during the current financial year (FY2023) which indicates that the Company has more than enough earnings to cover interest payments. This further indicates a sound financial health of the company.

Current Ratio

The company is well able to maintain its Current Ratio above 1 which it intended to in order to make sure it has enough resources to meet its short-term obligations.

Year Current Assets (Rs. In Lakhs) Current Liabilities (Rs. In Lakhs) Current Ratio
FY 2021 7459 4167 1.79
FY 2022 8025 3451 2.33
FY 2023 8750 3961 2.21

Debtors and Inventory Turnover Ratio

Debtors Turnover Ratio measures how many times a business can turn its accounts receivable into cash during a period. The company has been able to maintain a ratio of more than 3 in the past couple of years, indicating good liquidity.

The inventory turnover ratio is an important measure as well which measures how well a company generates sales from its inventory.

Year Debtor Turnover Ratio (Sales/ Inventory Turnover Ratio (Sales/
Receivable) Inventory)
FY 2022 7.44 1.96
FY 2023 7.56 2.29

Debt to Equity

The Debt Equity Ratio for the current financial year (FY 2023) is 0.60. The FY2023 Debt- to Equity ratio of the company is indicating that it is gradually moving to a stable capital structure, and is able to maintain its ratio well below the industry average.

Operating Profit Margin (%)

The companys FY2023 operating Profit decreased by 9.68% as compared to the previous year; after witnessing a couple of years of fluctuating margins.

Year EBIT (Rs. In Lakhs) Revenue from Operations (Rs. In Lakhs) EBIT Margin
FY 2022 777 11,643 6.16
FY 2023 793 14,297 5.55

Net Profit Margin (%)

The companys FY2023 Net Profit decreased by 29% as compared to the previous year, due to Continuous Operational Efficiencies is improving.

Year Net Profit (Rs. In Lakhs) Revenue from Operations (Rs. In Lakhs) Net Profit Margin
FY 2022 139 11,643 1.20
FY 2023 121 14297 0.85

Return on Net Worth

The company has maintained Return on Equity since long years. During the year company has attained return on equity of 1.88% which shows that the company is efficient to utilize the capital and investments so as to maximize the shareholders wealth. This variation in return on Equity is due to Reduction in costs and backward integration of different processes.

Year PAT (Rs. In Lakhs) Net Worth (Rs. In Lakhs) Return on Net Worth
FY 2022 139 6329 2.20
FY 2023 121 6449 1.88
By order of the Board of Directors For Euro India Fresh Foods Limited
Sd/-
MANHAR J. SANSPARA
Date : 31st August, 2023 Managing Director
Place : Surat DIN: 02623366