naturite agro products ltd share price Management discussions

ANNEXURE-A

Naturite Agro products Limited is proud to be one of the few Indias select manufacturers of the manufacturer, suppliers and exporter of Capsicum Oleoresin, Pure Capsaicin Natural, Paprika Oleoresin, Turmeric Oleoresin & Curcumin Powder. The offered range has been availed to the customers in standard compositions. Its products are supplied to pharmaceutical, healthcare, food, and beverage industries.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The spices market in India has witnessed significant growth in recent past on account of rising demand for spices fueled by expansion of spice mixes. The surge in growth is majorly originated from growth in chilly and turmeric as a segment of spice market. The growth in this segment has largely been led by the domestic factors such as increase in the area under cultivation and increasing demand from international markets. Unorganized segment has been dominating the spices market in India for last many years. The dominance of the unorganized segment in spices market in India can be attributed to the presence of huge number of local players selling open and unbranded products in the market.

The market for spices and seasoning has witnessed steady growth in recent decades due to rising demand for functional foods across the globe, wherein some select spices meant to provide immunity, such as turmeric, ginger, and garlic, have received tremendous responses from consumers globally. Additionally, the demand from consumers for high-quality healthy food ingredients, along with the increased preference for trying out new flavors in the foodservice sector and processed food products, is supporting the overall spices and seasoning markets growth globally, leading to an upward trend during the forecast period.

The global oleoresin market size was decently valued in 2021 and is anticipated to witness a compound annual growth rate (CAGR) of 6.9% from 2022 to 2030. Growing demand from healthcare, pharmaceutical, food, and beverage industries are driving forces of the global oleoresin market. Oleoresins are made from varied ingredients and spices, which are found all around the world. It is usually found in semi-solid extract form. A variety of oleoresins has multiple characteristics based on the spice they are derived from. They exhibit numerous therapeutic as well as antioxidant properties as well and are utilized in the pharmaceutical, healthcare, food, and beverage industries. The data for this oleoresin market came primarily from interviews with top market industry experts, different sources and research.

OPPORTUNITIES AND THREATS:

Opportunities:

1. Venture into ready to eat food segment present a huge opportunity for company

2. Increasing consumption of processed meat, confectionary and baked food products is likely to boost the demand for oleoresins as a food flavoring agent.

3. Listing the company under a stock exchange will open up huge avenues of capital for the company to support its expansion plans and allows it to venture into new businesses

Threats:

1. The new introduced regulatory norms in the spices market also pose a significant challenge.

2. Intervention of Government viz-a-viz import & export of spices is causing upheavals in the market hence affecting both demand and price

3. Constant increase in costs in terms of raw material inputs, services, power and fuel. The huge surge in costs continues to be a point of concern for the Company

RISKS AND CONCERNS:

Employee, input and raw material costs have continued to increase unprecedentedly this year. Heavy rains and other climatic changes have made it hard to get agricultural inputs on time and threatened their timely availability this year and the war in Ukraine causes significant challenges for cost and supply chain.

INDUSTRY OUTLOOK:

Oleoresin is a natural extract from plants that is used as a flavoring and coloring agent in the food, pharmaceutical, and cosmetic industries. These days natural products are obtaining more awareness among the people across the globe as they are looking for safer, healthier and more sustainable alternatives to conventional products. The main factors driving the market growth are the increasing demand for natural and organic products, the rising popularity of ethnic cuisines, and the growing awareness of the health benefits of oleoresins. The natural products market is growing rapidly, this growth is driven by factors such as consumer preference, innovation, reduced environmental impact and enhanced social responsibility. The Chilli Oleoresin products are used in pharmaceutical applications due to their antioxidant, anti-cancer, and anti-inflammation features. They help in reducing the free radicals in the human body.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate systems of internal controls in order to ensure that all assets are safeguarded against loss from unauthorized use or disposition and that all transactions are authorized recorded and reported correctly.

The Board of Directors has been entrusted with the responsibility of reviewing the findings and to investigate and take necessary actions wherever required

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Financial Statements of the Company for the financial year ended 31^st March, 2023 have been prepared in accordance with the applicable Indian Accounting Standards (Ind AS) and the provisions of the Companies Act, 2013.

During the year under review the operating turnover of the company was decreased by 30 percent to Rs. 780.99 Lakhs as compared to Rs. 1119.40 Lakhs in the previous year.

The Company incurred a loss for the year amounting to Rs. 58.92 Lakhs as compared to a profit of Rs. 28.07 Lakhs in the previous year.

HUMAN RESOURCES/ INDUSTRIAL RELATIONS:

Human resources are the back bone of any organization. We strive to offer our employees a dynamic and rewarding environment based on strong organizational values and individual abilities. The Company maintains their human capital growth in line with the demand. The companys retention strategy for talented employees includes offering competitive salaries and benefits, creating a positive and inclusive work culture, and enabling flexibility, work life balance, recognition and growth opportunities.

By Order Of the Board of Directors

FOR NATURITE AGRO PRODUCTS LIMITED

Sd/-	Sd/-
G VALLABH REDDY	K. PRABHAKAR REDDY
Managing Director	Director
DIN:01006373	DIN:00966105

Place: Hyderabad

Date : 29.08.2023