ANNEXURE F
Indias food processing sector, a shining pillar of the Indian economy, has been
booming in recent years. Holding a place among the largest food processing industries in
the world, it is responsible for a significant portion about 32 percent of Indias overall
food market. India, a bountiful land, has emerged as the second largest producer of
agricultural goods and an abundant source of fruits and vegetables. Its dairy, marine,
poultry, and meat industries are thriving and leading the world in production.
Additionally, the Indian gourmet food market is rapidly expanding at a rate of 20 per cent
annually.
INDUSTRY STRUCTURE AND DEVELOPMENTS:
The Food Processing sector in India has a quintessential role in linking Indian farmers
to consumers in the domestic and international markets. The Ministry of Food Processing
Industries (MoFPI) is making all efforts to encourage investments across the value chain.
The food processing industry has a share of 12.38% (at 3-digit of NIC classification) in
the employment generated in all Registered Factory sector engaging approximately 1.93 Mn
people. Unregistered food processing sector supports employment to 5.1 Mn workers as per
the NSSO 73rd Round report. Major sectors constituting the food processing industry in
India are grains, sugar, edible oils, beverages, and dairy products. Under PMKSY, 41 Mega
Food Parks, 376 Cold Chain projects, 79 Agro-Processing Clusters, 489 proposals under
Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC), 61 Creation
of Backward and Forward Linkages Projects, 52 Operation Green projects, 183 Food Testing
Laboratories projects have been approved across the country.
The food processing market in India was valued at INR 25,691.30 Bn in FY 2018 and is
expected to reach INR 53,435.52 Bn by FY 2024, expanding at a CAGR of ~12.09% during the
FY 2020-FY 2024 period. The industry experiences a conducive growth environment in terms
of availability of raw materials, which is evident from the fact that the Indian food and
beverage industry witnessed revenue growth of ~13.41% during the 2015-2019 period.
Further, increase in the per capita income and rise in the living standards of people are
propelling the growth of the food processing market in India. On the other hand, there is
a lack of storage infrastructure faced by the industry (hygienic cold chains,
well-established distribution system and transportation networks), which is impeding the
growth of the industry in India.
Cotton Seed Oil Market size is set to grow at a steady CAGR of 3.3% in the forecast
period of 2021-2026 and contribute revenue of 3.91 billion by the year 2026. Cotton Seed
Oil is edible oil, extracted from the seeds of the cotton plants, mainly Gossypium
Herbaceum and Gossypium hirsutum. The oil is obtained by breaking the cotton kernel and
then processing it forward. Cotton Seed Oil is used in different verticals; hence its
demand is cross-industrial in the oil market. Due to its quality of imbibing the taste of
the food, rather than adding its own, owing to which it is widely used by the food
processing industries. Apart from that, it is poised to offer various health and skin
benefits to the user making it a popular cosmetic ingredient in the cosmetic industry.
Increasing health awareness of the health benefits rendered by the cottonseed oil is set
to lead the cotton seed oil market demand during the forecast period of 2021-2026.
GOVERNMENT INITIATIVES
In order to boost the growth of the food processing sector, the government launched
production-linked incentive (PLI) schemes. With a total budget of INR 10,900 Crore, the
government has already invested INR 4,900 Crore in the sector through the PLI plan. The
scheme will run for seven years, from 2020-21 to 2026-27. To qualify for the incentive,
the entire manufacturing process, including the initial processing of food items, must
take place within India, which is expected to provide a much-needed boost to the local
industry. The scheme will also help to promote Indian brands globally. Additionally, with
2023 being declared as the International Year of Millets, the Ministry of Food Processing
Industries (MoFPI) is committed to promoting post-harvest value addition, increasing
domestic consumption, and branding millet products both nationally and internationally
through various PLI schemes. In 2022-23, MoFPI invested 800 Crores to expand the PLI
Scheme and added a new component specifically for millet- based products. A total of 30
projects for millet-based products have been approved. Furthermore, the government has
continued the umbrella Pradhan Mantri Kisan Sampada Yojna (PMKSY) scheme with an
allocation of INR 4600 crores till March 2026. The Ministry has also been implementing the
PM Formalization of Micro Food Processing Enterprises Scheme (PMFME) for providing
financial, technical, and business support for the upgradation of existing micro food
processing enterprises.
In the recent Union Budget 2023-24, the Finance Minister, Nirmala Sitharaman, announced
an increased grant of roughly INR 1.15 Crore for the Ministry of Agriculture and Farmers
Welfare, which is a 4.6% increase compared to last years grant of nearly INR 1.10 lakh
Crore. This grant aims to create a strong foundation for agriculture-based production and
processing.
SUMMARY OF OUR BUSINESS
We are engaged in the business of de-linting and de-hulling of cotton seeds by
mechanical process, oil extraction from cotton seeds and solvent extraction from cotton
seeds oil cake and ground nuts. Our manufacturing process is in three stages (I) De-
linting and de-hulling of Cotton seeds, this process result inmanufacture of shot fiber
(linter), and De-linted cotton Seeds (II) Cotton seeds oil extraction process result in
pre refine cotton seeds oil and cotton seeds oil cake and (III) Solvent extraction
process, result in pre refine wash oil and de-oil cotton seeds cake. Cotton linter can be
used in manufacturing of papers and as raw materials for manufacture of cellulose, this
can be further process for medical and cosmetic purpose, linter can be broadly classified
as an industrial raw materials. Cotton seeds oil cake, cotton seeds de oil cake and cotton
hull are used as animal feeds.
Cotton seed pre refine oil further process by refinery to convert in to edible oil.
FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations and financial conditions are affected by numerous factors
including the following:
• Change in price of raw material
• Working Capital arrangements.
• Competition and price cutting from existing and new entrants
• General Economics and business conditions
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has a proper and adequate system of internal financial controls,
commensurate with its size and business operation. It ensures timely and accurate
financial reporting in accordance with applicable accounting standards, safeguarding of
assets against unauthorised use or disposition and compliance with all applicable
regulatory laws and Company policies. Internal Auditors of the Company review the internal
financial control systems on a regular basis for its effectiveness, and necessary changes
and suggestions are duly incorporated into the system. Internal audit reports are also
reviewed by the Audit Committee of the Board.
Discussion on Financial Performance with respect to Operational Performance:
The key strategy will be focused around:
1. Financial strength & liquidity
2. Professional Management
3. Timely completion of Orders
4. Customer care
5. Brand Equity
Financial Performance and Review of Operations:
(Rs. in Lakhs)
| Particulars |
F.Y. 2022-23 |
F.Y. 2021-22 |
| Revenue from operations |
16268.37 |
28,779.70 |
| Other Income |
5.11 |
75.97 |
| Total Income |
16273.47 |
28,855.67 |
| Operating expenditure before Finance cost, depreciation and amortization |
15217.75 |
27494.42 |
| Earnings before Finance cost, depreciation and amortization (EBITDA) |
1055.73 |
1361.25 |
| Less: Finance costs |
428.32 |
447.80 |
| Less: Depreciation and amortization expense |
98.95 |
89.63 |
| Profit/(Loss) before tax |
528.46 |
823.82 |
| Less: Tax expense |
143.93 |
209.75 |
| Profit/(Loss) for the year (PAT) |
384.53 |
614.07 |
OUTLOOK
We believe, the Company has a great deal of opportunities for future growth. There is
enormous untapped potential across our established brand equity, target geographies and
diversified product portfolio and we continue to take several steps towards capitalizing
on these growth drivers. Our vision is being directed towards the innovation of products,
further complimented by improved packaging.
The Company also continues to converge on improving business capabilities and enhancing
growth levers. Improved R&D capabilities, enhanced retail format expansion, design
abilities and better inventory management amongst others will help reinforce our
competitive advantages.
THREATS, RISK AND CONCERNS
The industry is highly fragmented in the hands of several organized and unorganized
players. Due to the attractiveness of the opportunity and large potential, competition
across the industry in India is rising significantly. The Company is concerned about
prevailing exposure norms, financial position, entry of new players in the market, rising
competition from banks & multilateral agencies, uncertain business environment,
fluctuation in rupee, likely increase in cost of capital due to volatile market
conditions. Further, the state of business and policy environment in the country also has
a cascading effect on the interest-rate regime, cost and availability of raw materials and
gestation period & capital outlays required for raw material. General economic
conditions may also affect the capacity and production of the manufacturing of the
products.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
The Companys relations with the employees continued to be cordial and harmonious with
its employees. It considers manpower as its assets and that people had been driving force
for growth and expansion of the Company. The Company acknowledge that its principal assets
is it employees. The Company has continued its efforts in building a diverse and inclusive
workforce.
The total number of employees on roll in the Company as on 31st March, 2023,
including factory workmen, was 24. The Company will continue to create opportunity and
ensure recruitment of diverse candidates without compromising on meritocracy.
KEY FINANCIAL RATIOS:
| Ratio |
Figures As At 31.03.2023 |
Figures As At 31.03.2022 |
% Change From Last Year |
Explanation for Change in Ratio (for more than 25% in comparison with last year) |
| Current Ratio |
2.35 |
2.06 |
14.29 |
- |
| Debt-Equity Ratio |
0.66 |
0.81 |
-19.05 |
- |
| Debt Service Coverage Ratio |
1.88 |
2.75 |
-31.82 |
Debt Service Coverage ratio has decreased on account of decrease in net profit of the
company. |
| Return on Equity Ratio |
7 |
12.49 |
-43.16 |
Return on equity has decreased on account of decrease in profit of current year as
compared to that of previous year. |
| Inventory turnover ratio |
2.92 |
4.92 |
-40.67 |
Inventory turnover ratio has decreased during the year, due to decrease in companys
operation during the year. |
| Trade Receivables turnover ratio |
9.08 |
11.19 |
-18.85 |
- |
| Trade payables turnover ratio |
9.28 |
20.62 |
-54.98 |
Trade payables turnover ratio has decreased on account of non-payment to creditors by
the Company. |
| Net capital turnover ratio |
1.01 |
5.39 |
-81.32 |
Net Capital Turnover ratio has decreased on account of decrease in turnover of current
year as compared to that of previous year |
| Net profit ratio |
2.36 |
2.13 |
10.78 |
- |
| Return on Capital employed |
15.07 |
20.95 |
-28.10 |
- |
| Return on investment |
0 |
0 |
0 |
- |
CAUTIONARY STATEMENT
Statement in this report describing the Companys objectives projections estimates and
expectation may constitute “forward looking statement” within the meaning of
applicable laws and regulations. Forward looking statements are based on certain
assumption and expectations of future events. These Statements are subject to certain risk
and uncertainties. The Company cannot guarantee that these assumption and expectations are
accurate or will be realized. The actual results may different from those expressed or
implied since the Companys operations are affected by many external and internal factors
which are beyond the control of the management. Hence the Company assumes no
responsibility in respect of forward-looking statements that may be amended or modified in
future on the basis of subsequent developments information or events.
Registered office:
Imperial Heights Tower-B,
Second Floor, Office No. B-206, 150 Ft Ring Road, Opp. Big Bazar Rajkot-360005
Date: July 17, 2023 Place: Rajkot
For and on behalf of Board of Directors Shree Ram Proteins Limited
CIN: L01405GJ2008PLC054913
Sd/- Sd/-
Lalitkumar Chandulal Vasoya Piyush Chandubhai Vasoya Chairman and Managing Director
Non-Executive Director DIN: 02296254 DIN: 06889294
+91-9892691696
