Sonalis Consumer Products Ltd Management Discussions

Global Economy

Projecting what the future holds is an important exercise for business and governments looking to plan ahead, we look ahead to the trends we expect to come to the fore in the global economy in the year to come. India is the fifth largest economy in the world and expected to be the fastest-growing economy among major G20 countries, with GDP growth estimated to be around 8% in FY24. The food processing sector has become a key contributor to Indias economy over the past few years, thanks to progressive policy measures by the Ministry of Food Processing Industries (MoFPI). The sector has performed exceptionally well with an impressive average annual growth rate of 7.3% from 2015 to 2022. It has significantly contributed to Gross Domestic Product (GDP), employment, and investment, accounting for 10.54% of gross value added (GVA) in Manufacturing and 11.57% in Agriculture sector in 2020-21.

Indias diverse agro-climatic conditions allow for abundant production of cereals, pulses, fruits, and vegetables, making it a leading producer of various foods. India was a global leader in milk production contributing 25% to global milk production, in 2022-23. The country ranked second in vegetables and fruits and egg production and fifth in meat production, respectively, in 2022-23.

(Disclaimer: The Information were taken from secondary source, there might be some mistakes were there)

Indian Economy

Additionally, India is the largest producer of spices in the world, with 11.26 million tonnes of major spices produced in 2022-23, as per the third advanced estimate by spices board of India. The food processing industry in India is still in its early stages, contributing less than 10% to the total food output. According to a Deloitte study on Level of Food Processing in India, processing levels were at 2.7% for vegetables, 4.5% for fruits, 15.4% for fishery, 21.1% for milk, and 34.2% for meat in 2020-21.

The market size of food processing sector in India is estimated to reach US$ 1,274 billion in 2027 from US$ 866 billion in 2022, backed by the rise in population, changing lifestyle and food habits due to rising disposable income and urbanization.

Food and grocery market in India is the sixth largest in the world. Food processing industry contributes 32% to this food market and is also one of the largest industries in the country, contributing 13% to total export and 6% of industrial investment. The food processing industry, within the registered factory sector, employs about 1.93 million people while the unregistered sector also employs approximately 5.1 million workers.

(Disclaimer: The Information were taken from secondary source, there might be some mistakes were there)

Industry Structure and Developments:

The Indian food processing sector offers a promising growth journey ahead and presents several opportunities with the sector being recognized as a key priority industry under the "Make in India" initiative. The MoFPI has undertaken several initiatives aimed at enhancing infrastructure and fostering food processing industries to stimulate investment in this domain. The Indian Government has sought to involve multiple stakeholders to improve interactions between farmers, processors, distributors, and retailers to establish strong supply chains linking farmers to processing and marketing to empower them with nearby grading and storage facilities which will enhance the value of their products.

There are substantial investment prospects totaling US$ 2.36 billion across 31 projects under Common Infrastructure for Industrial Parks which includes facilities such as specialized processing units, effluent treatment plants, testing laboratories, common warehouses, and logistics support. Foreign investment opportunities in Indias food processing sector are also promising due to favorable policies, a vast consumer market, and government initiatives focused on improving the sectors competitiveness and sustainability.

(Disclaimer: The Information were taken from secondary source, there might be some mistakes were there)

COMPANY OVERVIEW

Sonalis Consumer Products Limited welcome to a world of Innovative Gourmet Quality & Healthy all-day food options. Our offering include superfood infused healthy laddus whole grain pop – ups, granola bars, baked snacks, healthy diet munchies and more.

Sonalis Consumer Products Limited engaged in the business of Appetite Food, we have over the years leveraged their understanding of our target markets and consumer segments, product innovation capabilities, distribution network, strategically located manufacturing facilities and have focused our marketing and promotional activities to strengthen our product brands and establish our brands across India.

FUTURE OUTLOOK:

Indias snack consumption patterns have not only changed but still changing. The roles played by main course meals vs snacks are reaching the point of intersection. For sure, the consumers relationship with their snacks has got deeper and become more meaningful.

We are increasing our reach in the industry by expanding our client base across sectors / verticals. Development of products aiming at various sectors to improve the depth of our engagement with the industry.

OUR PRODUCT RANGE:

Granola Bar: These products are made out of 100% fruits and nuts cooked in honey in bar form. The products under this category include C-Bars, IMU-Bars, O-Bars, Pro-Bars and Ragi Bars. We sell these products under our brand "Appetite Food".

Laddu: A product made out of grains, pulses, nuts, dry fruits and healthy oils in to spherical form. The products under this category include Mithi Laddu, Multigrain Laddu, Mung Laddu, Oats Laddu, Ragi Laddu and Spirulina Laddu. These laddus are made from various whole-grain flours, Ghee, Jaggery, Dry fruits, Nuts etc. without adding any preservatives or Flavors and colours.

Chakli: Chakli is a deep-fried snack made from rice flour, gram flour, wheat flour or a mixture of lentil flours.

Chivda: Under this category our product Chivda is a delicious Savory snack made with flattened rice (rice flakes/poha), peanuts, daliya dal, cashew nuts, raisins and spices. It is a healthy alternative to high cholesterol and sugar concentrated products.

Sev: Sev is a noodle type crispy snack made from gram flour

OPPORTUNITIES

With consumption and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with several international players increased penetration of organized retail, favorable demographics and rising income levels to drive food products demand. Changing taste and preferences in the India, it works as demand driver to the industry. It has been complemented by a young population which growing and at the same time is exposed to changing tastes. India enjoys a comparative advantage in terms of skilled manpower and in cost of production.

THREATS

Shortage or Artificial Shortage of Raw material for food products which is mostly source from domestic market. Raw material for processing of food products is an agriculture product and its supply and quality are subject to force of nature. Any material shortage or interruption in the domestic supply or deterioration in the quality of raw material due to natural causes or other factors could results in increased production costs. The volatility in price of raw materials in market and shortage of manpower are the major threaten to the company

RISK AND CONCERNS

The nature and the magnitude of the risks associated with the Company are reviewed and placed before the Board periodically. Various measures for modernization have been introduced to reduce the dependency of labor, which also ensures optimum capacity utilization & quality outputs. Quality of our product is key aspect to sustain in the Market. Any failure to maintain the quality of the product may affect adversely to our business.

FINANCIAL REVIEW

Particular	2023-2024	2022-2023
Total Revenue	408.12	653.21
Profit/loss before finance cost, depreciation	5.32	14.67
Less: Financial Costs	0.47	0.95
Less: Depreciation and amortization	2.29	10.83
Profit before tax	2.56	2.89
Less: Tax Expenses	0.43	2.59
Profit after tax for the year	2.13	0.30
Earnings Per Share	0.01	0.00

SEGMENT–WISE PERFORMANCE:

The Company has identified its business segment as Primary Reportable Segment. There are no other Primary Reportable Segment and the Companys Operations fall under a single segment " Packaged Foods". Hence, Segment reporting is not applicable as per Accounting Standard (AS) - 17 - Segment Reporting.

DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed all the treatments in the Financial Statements as per the prescribed Accounting Standards.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has implemented proper system for safeguarding the operations/ business of the Company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements. The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

The Company gets internal audit and verification done at regular intervals. The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of Company.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT

The Company believes that employee plays a pivotal role in achieving a competitive advantage. The Company provides them an environment, where each employee is motivated to contribute his best to achieve the Companies objective. The focus of all aspects of Human Resource Development is on developing a superior workforce so that the organization and individual employee can achieve their work goals. The Company has a progressive HR policy for helping employees to develop their organization skills, knowledge and abilities to achieve greater efficiency. The Industrial Relations of the Company with its personnel has continued to be cordial and friendly during the year.

CAUTIONARY STATEMENT

Statement in the "Management Discussion and Analysis" describing the Companys objectives, estimates, expectations or projections may be "forward looking statements" within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectation of future events. Actual results could, however, differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include demand/supply conditions, finished goods, prices, raw material costs, changes in government regulations, tax laws and other statues and other incidental factors. The Company assumes no responsibility in respect of the forward-looking statements herein, which may undergo changes in future on the basis of subsequent developments, information or events.

For and on Behalf of Board of Directors
SONALIS CONSUMER PRODUCTS LIMITED
Sd/-	Sd/-
SONALI NILESH KOCHAREKAR	SMITA SHASHIKANT SHAH
Managing Director	Whole Time Director
DIN: 09536461	DIN: 09536462
Date: 05.09.2024
Place: Mumbai