NFP Sampoorna Foods Ltd Management Discussions

You should read the following discussion in conjunction with our restated financial statements attached in the chapter titled "Financial Information of the Company" beginning on page 157. You should also read the section titled "Risk Factors" on page 25 and the section titled "Forward Looking Statements" on page 18 of this Prospectus, which discusses a number of factors and contingencies that could affect our financial condition and results of operations. The following discussion relates to us, and, unless otherwise stated or the context requires otherwise, is based on our Restated financial Statements.

Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditor 31st March ,2024 which is included in this Prospectus under "Financial Statements". The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelve-month period ended March 31 of that year.

OVERVIEW.

Our company, NFP Sampoorna Foods Limited, was incorporated under the Companies Act, 2013, and received its Certificate of Incorporation on December 13, 2023, bearing Corporate Identification Number U10793HR2023PLC117207 from the Central Registration Center. Previously, our business was operated as a partnership firm named M/s Nut and Food Processor, registered under the Partnership Act, 1932. Following a resolution passed by our partners on October 28, 2023, our partnership was converted into a public limited company, and our name was subsequently changed to NFP Sampoorna Foods Limited.

M/s Nut and Food Processor, a partnership firm, was established on October 30, 2019, by Deepak Gupta and Nitish Gupta. The firm was subsequently acquired, as a going concern by the present promoters Mr. Yashvardhan Goel and Mr. Praveen Goyal, who further expanded the business. and the firm continues to operate successfully with its conversion into a public limited company, NFP Sampoorna Foods Limited, on December 13, 2023 under the supervision of Management of the company.

NFP Sampoorna Foods Limited is engaged in processing raw cashew nuts into finished cashew kernels in various grades with a presence in various state. We mainly procure raw cashew material by way of import from Africa. We focus on quality of our products to increase our presence across the country. The Company is primarily engaged in the processing and trading of cashew nuts.

The company adheres to stringent quality control measures and has obtained certifications such as ISO 9001:2015 and ISO 22000:2018, underscoring their dedication to quality management and food safety, These Certifications validate NFP Sampoorna Nuts commitment to delivering superior cashew products that meet international standards and meet customer expectations.

For the financial year 2020-21, the partnership firm, M/s Nut and Foods Processor, achieved a turnover of ?309.19 lakhs, with a profit before partner remuneration of ?8.67 lakhs. After Acquisition by the current Promoters of the Company in the subsequent financial year 2022, the firm showed remarkable growth, achieving a turnover of ?748.68 lakhs, representing a significant increase of over 140% compared to the previous financial year 2021.

The partners of M/s Nut Foods Processors decided to transition the business to a corporate structure and consequently converted the firm into a company, namely NFP Sampoorna Foods Limited. As a result, all assets and liabilities of the partnership firm were transferred to the company effective December 20, 2023. The consideration for this conversion was discharged through the issuance of 51,41,152 equity shares of the company, valued at

?10 per share, totaling ?5,14,11,520.

The Company is in the business of trading of cashew in to B2B and B2C Market. The Company is selling the Cashew to the wholesalers and Consumers.

The Company has been importing the RCN (Raw Cashew Nut) directly from farm of Africa. The Company is procuring the best quality raw cashew nuts at the best competitive rates to provide crispiest and crunchiest cashew to every household in the country.

Key Performance Indicators of the Company

(? in Lakhs, otherwise mentioned)

Key Financial Performance		21st Dec 2023-31 Marc 2024	01st April 2023-20th Dec 2023	01 April 2022- 31stMarch 2023	01 April 2021- 31st March 2022
Revenue from Operations (1)		599.66	1700.70	1674.68	748.69
EBITDA (2)		57.31	190.59	77.80	4.26
EBITDA Margin (%) (3)		9.56%	11.21%	4.65	0.57
PAT		17.10	86.64	41.59	-6.39
PAT Margin (%) (4)		2.85%	5.09%	2.48%	-0.85%
Return on equity (%) (5)		2.97%	12.66%	5.57%	-1.48%
	Return on capital employed (%)(6)	4.78%	16.18%	7.59%	-0.68%

Notes:

(1) Revenue from operation means revenue from sale of the products

(2) EBITDA is calculated as Profit before tax + Depreciation + Finance Costs

(3) EBITDA Margin is calculated as EBITDA divided by Revenue from Operations

(4) PAT Margin is calculated as PAT for the period/year divided by revenue from operations

(5) Return on Equity is ratio of Profit after Tax and Average Shareholder Equity

(6) Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as Share holders Fund + Long term borrowing + Short term borrowing+ Deferred Tax Liability.

Explanation for KPI metrics

KPI	Explanations
Revenue from Operations	Revenue from Operations is used by our management to track the revenue profile of the business and in turn helps to assess the overall financial performance of our Company and volume of our business
EBITDA	EBITDA provides information regarding the operational efficiency of the business
EBITDA Margin(%)	EBITDA Margin (%) is an indicator of the operational profitability and financial performance of our business
PAT	Profit after tax provides information regarding the overall profitability of the business.
PAT Margin(%)	PAT Margin (%) is an indicator of the overall profitability and financial performance of our business.
RoE(%)	RoE provides how efficiently our Company generates profits from shareholders funds.
RoCE (%)	RoCE provides how efficiently our Company generates earnings from the capital employed in the business.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to "Annexure IV of Restated Financial Statements" beginning on page 165 of this Prospectus.

Factors Affecting our Results of Operations

Our Business is subjected to various risks and uncertainties, including those discussed in the section "Risk Factors" beginning on page 25 of this Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

1. General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies;

2. occurrence of Environmental Problems & Uninsured Losses;

3. Changes in consumer demand;

4. Failure to successfully upgrade our product portfolio, from time to time;

5. Any change in government policies resulting in increases in taxes payable by us;

6. Our ability to retain our key managements persons and other employees;

7. Changes in laws and regulations that apply to the industries in which we operate.

8. Our failure to keep pace with rapid changes in technology;

9. Our ability to grow our business;

10. Our ability to make interest and principal payments on our existing debt obligations and satisfy the other covenants contained in our existing debt agreements;

11. general economic, political and other risks that are out of our control;

12. Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

13. Companys ability to successfully implement its growth strategy and expansion plans;

14. failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate;

15. inability to successfully obtain registrations in a timely manner or at all;

16. conflicts of interest with affiliated companies, the promoter group and other related parties;

17. The performance of the financial markets in India and globally;

18. Global distress due to pandemic, war or by any other reason.

19. Foreign Currency Exchange rate fluctuation risks

20. Our product is perishable goods and we have to take lot of care & precautions in storing these goods.

Discussion on Result of Operation

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements for the financial years ended on March 31, 2024, March 31, 2023 and March 31, 2022.

(Rs. in lakhs)

Particulars	21 Dec 2023- 31Marc 2024	% of Total Income	pril 2023-20th Dec 2023	% of Total Income	Mar 31, 2023	% of Total Income	Mar 31, 2022	% of Total Income
Revenue from operations	599.66	100%	1700.70	98.23%	1674.68	99.99%	748.69	100%
Other income	-		30.55	1.76%	0.01	0.01%	-

 

Total Income	599.66	100%	1731.25	100%	1674.69	100%	748.69	100%
Expenses
Raw Material consumption	124.65	20.78%	2004.51		1531.88	91.47%	673.80	89.99%
Change in inventories of finished goods , work in progress and stock in trade	304.92	50.84%	(716.44)	41.38%	(129.36)	7.72%	(11.07)	0.14%
Employee Benefit Expenses	74.80	12.47%	174.35	10.07%	137.09	8.18%	40.76	0.054%
Finance Costs	25.15	4.19%	48.18	2.78%	4.81	0.28%	2.03	0.27%
Depreciation and Amortisation Expenses	6.55	1.09%	9.23	0.53%	12.88	0.76%	8.63	1.15%
Other Expenses	37.98	6.33%	78.24	4.51%	57.28	3.42%	40.94	5.46%
Total expenses	574.05	95.72%	1598.07	92.30%	1614.58	96.41%	755.08	-
Profit/(Loss)Before Exceptional & extraordinary items & Tax	25.61	4.27%	133.18	7.69%	60.11	3.58%	(6.39)	-
Exceptional and Extraordinary items	-		-		-		-	-
Profit/(Loss)Before Tax	25.61	4.27%	133.18	7.69%	60.11	3.58%	(6.39)	-
Tax Expense:								-
Tax Expense for Current Year	7.92	1.32%	46.54	2.68%	18.52	1.10%	-	-
Deferred Tax	(0.58)	0.096%						-
Net Current Tax Expenses	8.50	1.41%	46.54	2.68%	18.52	1.10%	-	-
Profit/(Loss)for the Year	17.10	2.85%	86.64	5.00%	41.59	2.48%	(6.39)	-

The Restated Profit after tax for the financial year 2023-24 was Rs. 103.74 Lakhs as compared to Restated Profit after Tax of Rs. 41.59 lakhs during the financial year 2022-23, representing a significant increase of 62.15%

Revenue from operations mainly consists of sale of Cashew Nuts.

Other Income:

Our other income primarily comprises of discount income, Export Incentives, interest income and other miscellaneous income.

Expenses:

Companys expenses consist of raw material consumption, change in inventories of finished goods, work in progress and Scrapped Goods, Employee benefits expense, Finance costs, Depreciation and amortization and other expenses.

Raw material consumption:

Our Raw Material consumption comprises primarily of Raw Cashew Nuts.

Change in inventories of finished goods, work in progress and Scrapped Goods:

Our changes in the inventory comprises of changes in the finished goods, work in progress.

Employee benefits expense:

Our employee benefits expense primarily comprises of Salary & Wages, Managerial Remuneration and Labour & Staff Welfare Expenses.

Finance Costs:

Our finance cost includes Interest expense and Other Borrowing cost.

Depreciation and Amortization Expenses:

Depreciation includes depreciation on Property, Plant & Equipments etc.

Other Expenses:

Our other expenses includes Manufacturing Expenses such as Electricity expenses, Repair and Maintenance charges, inspection charges, drawing & knotting charges, job work expenses, packing expenses, housekeeping expenses, canteen expenses, printing & stationery, security charges, Transportation charges etc.

FINANCIAL PERFORMANCE HIGHLIGHTS FOR THE PERIOD ENDED March 31, 2024

Total Income:

Total income for the period ended March 31, 2024 stood at Rs. 2330.91 Lakhs. The total income consists of revenue from operations and other income.

Revenue from Operations:

During the period ended March 31, 2024 the net revenue from operation of our Company was Rs. 2300.36 Lakhs. Revenue from operations mainly consists of sale of Cashew Nuts.

Other Income:

During the period ended March 31, 2024 the other income of our Company stood at Rs. 30.55.

Total Expensese

Companys expenses consist of raw material consumption, change in inventories of finished goods, work in progress and Scrapped goods, Employee benefits expense, Finance costs, Depreciation and amortization and other expenses. During the period ended March 31, 2024 the total expenses of our Company stood at Rs. 2172.12 Lakhs.

Raw material consumption:

During the period ended March 31. 2024 the Raw material consumption expenses of our Company stood at Rs. 2129.16 Lakhs. Our Raw Material consumption comprises primarily of Raw Cashew Nuts for manufacturing of Cashew Nuts.

Change in inventories of finished goods, work in progress and stock in trade:

Our changes in the inventory comprises of changes in the finished goods, work in progress and Scrapped Goods. During the period ended March 31. 2024 Change in inventories of finished goods, work in progress and scrapped goods of our Company stood at Rs. (411.53) Lakhs.

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Employee benefits expense:

During the period ended March 31, 2024 the employee benefit expenses of our Company stood at Rs. 249.16 Lakhs. The main components of the employee benefit expenses are Salaries and wages, Managerial Remuneration and Labour & Staff welfare expenses.

Finance Costs:

During the period ended March 31, 2024 the Finance cost of our Company stood at Rs. 73.33 Lakhs. The main components of the finance costs consist of Interest expense and other borrowing cost.

Depreciation and Amortization Expenses:

During the period ended March 31, 2024 the Depreciation and amortization charges of our Company stood at Rs. 15.78 Lakhs.

Other Expenses:

During the period ended March 31, 2024 the Other Expenses of our Company stood at Rs. 125.21 Lakhs. Our other expenses include Manufacturing Expenses such as Electricity expenses, Repair and Maintenance charges, inspection charges, job work expenses, packing expenses, housekeeping expenses, canteen expenses, printing & stationery, security charges, Transportation charges etc.

Restated Profit before tax:

The Company reported Restated profit before tax for period ending March 31, 2024 of Rs. 158.79 Lakhs.

Restated profit after tax:

The Company reported Restated profit after tax for period ending March 31, 2024 of Rs. 103.74 Lakhs.

Comparison of Financial Year 2024 with Financial Year 2023 (Based on Restated Financial Statements)

Total Income

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Total income for the financial year 23-24 stood at Rs. 2300.91 Lakhs whereas in Financial Year 22-23 the same stood at Rs. 1674.69 Lakhs

Revenue from Operations:

Revenue from Operations for the F.Y. 2023-24 stood at Rs. 2300.36 Lakhs whereas in F.Y. 2022-23 the same stood at Rs. 1674.68 Lakhs representing an increase of 37.36 %. The main reason for increase in revenue from operations were: Increase in demand of our product because of good quality of raw material and final produced goods, competitive prices, marketing strategies etc.

Other Income:

For F.Y. 2023-24, other income has been increased to Rs. 30.55 Lakhs as against Rs.10.43 Lakhs in the Financial Year 2022-23 representing an increase of which is mainly due to increase Rebate & discount received, foreign currency exchange rate fluctuation income, Insurance claim receipt.

Total Expenses:

For F.Y. 2023-24, total expenses has significantly increased to Rs. 2172.12 Lakhs from Rs.1614.58 Lakhs in the financial year 2022-23 representing an increase of 34.53%. Such increase was due to increase in the volume of business operations of the Company.

Raw material consumption:

For F.Y. 2023-24, raw material consumption was increased to Rs. 2120.16 lakhs from Rs. 1531.88 lakhs in the F.Y. 2022-23 representing an increase of 38.43.%.