ravalgaon sugar farm ltd share price Management discussions

MANAGEMENT DiSCUSSiON AND ANALYSiS REPORT

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

Indias proclivity for sweet foods is well known. A consumer looking for sweet foods can choose between hard-boiled sweets, toffees, chocolates, gums, jellies, mints, cakes, biscuits, traditional mithai and so on. The manufacturers of these products range from individual homes to small, unorganized establishments to large industrial units. Some of the distinguishing characteristics, regardless of size of the production unit, are the focus on good raw materials, hygiene, nutritional values and branding. In some ways strong branding is a signal that the product is consistently manufactured and distributed with the expected care. Innovation in product and packaging as well as consumer engagement through social and traditional media have allowed the category to grow considerably in the last few years. The products are still largely sold through the general trade channel. However, modern trade remains an exciting and growing avenue for driving volumes and brand engagement at the store level. E-commerce, especially for the impulse categories, is a niche channel that shows promise for even greater contribution in the future. The industry is highly price sensitive and therefore remains dependent on a stable pricing environment for raw materials and other industrial inputs. A growing focus on nutrition among consumers has driven recent innovations on substitution of sweetening agents and the government continues to take steps to ensure responsible consumption of these products. Overall, the industry is mature and growing with predictable demand characteristics and will be an important pillar of the fast-moving consumer goods industry in the future.

B. OUTLOOK AND OPPORTUNITIES:

Economic activity shows signs of having stabilized after the pandemic years and both urban and rural markets are seeing a steady improvement in commercial activity. Expectations of adequate rainfall may ensure robust economic activity in rural communities. The overall retail outlook looks supportive for improved consumer sentiment. Having completed its migration away from the lower margin 50-paise unit category, the Company has improved its unit economics over the last few years. A focus on building volumes across general trade, wholesale, modern trade and e-commerce channels will help take advantage of this shift to higher price points.

C. SEGMENT - WISE PERFORMANCE:

The Company is operating in a single segment viz. Manufacturing of Confectionery.

D. THREATS, RiSKS AND CONCERNS:

Inflationary pressures in the cost of raw materials, human resources and transport may put pressure on margins, while lack of timely availability of raw materials or suitable manpower may hamper our ability to meet demand. Unpredictable changes in laws and unexpected enforcement actions by governments or local authorities may make it difficult to operate and serve our customers.

E. iNTERNAL CONTROL systems AND THEiR Adequacy:

The Company maintains adequate internal control systems and makes need-based suitable changes therein to strengthen the same. The system provides, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Companys assets.

F. DiSCUSSiON ON FiNANCiAL PERFORMANCE WiTH RESPECT TO OPERATiONAL PERFORMANCE:

The Revenue from Operations (Net) (excluding Other Income) for the year ended March 31, 2023 was Rs. 966.54 Lakhs as against Rs. 745.39 Lakhs for the previous year. The Net Loss of Rs. 229.89 Lakhs for the year ended March 31, 2023 as against the Net Profit of Rs. 194.95 Lakhs for the previous year.

G. MATERiAL DEVELOPMENTS iN HUMAN RESOURCES / iNDUSTRiAL RELATiONS, iNCLUDiNG NUMBER OF PEOPLE EMPLOYED:

The Company believes that manpower is the most valuable resource for its growth. Industrial relations have been cordial. The Company has recruited competent managerial personnel at various levels and personnel policies aim to ensure the involvement of all in the development of the Company. The Company employed 112 personnel as on March 31, 2023.

H. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Sr. No.	Ratios	2022-23	2021-22	Diff. (in %)	Reasons if difference is more than 25%
1.	Debtors Turnover Ratio (in times)	105.63	212.36	-50.26	Trade Receivables has increased as compared to previous year
2.	Inventory Turnover Ratio (in times)	2.27	1.83	24.17	-
3.	Interest Coverage Ratio (in times)	-0.70	2.47	-128.55	Difference is due to loss incurred in current year and increase in Debt
4.	Current Ratio (in times)	0.27	0.30	-11.02	-
5.	Debt Equity Ratio (in times)	4.54	2.25	101.92	Difference is due to loss incurred during the current year, indirectly affecting the total equity
6.	Operating Profit Margin (in %)	-9.82	46.39	-121.17	Difference is due to loss incurred during the current year
7.	Net Profit Margin (in %)	-23.78	26.15	-190.94	There is decrease in ratio as there is loss for the year
8	Return on Net Worth	-87.11	39.48	-320.64	There is decrease in ratio as there is loss for the year

I. DISCLOSuRE OF ACCOuNTING TREATMENT:

During the year under review, there has been no changes in Accounting Policies and Practices. These Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) (Amendment) Rules, 2016 notified under Section 133 of the Act and other relevant provisions of the Act. The Financial Statements up to and for the year ended March 31, 2023 were prepared to comply in all material aspects with the Accounting Standards specified under Section 133 of the Act read with the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act. The previous year figures have been regrouped/ reclassified or restated, so as to make the figures comparable with the figures of current year.

J. cautionary STATEMENT:

The information, opinions and views expressed in this section of the Annual Report contain certain forward looking statements which involve risks and uncertainties. The Management has made its best efforts to present this discussion/analysis and believes these to be true to the best of its knowledge at the time of its preparation. The Management is not responsible to publicly update or revise any of these forward looking statements whether on the basis of new information, future events or otherwise. The Management shall not be liable for any loss which may arise as a result of any action taken on the basis of information, opinion or views contained herein. The reproduction, disclosure or use of the information contained herein without express prior written permission of the company is strictly prohibited.