soni soya products ltd Management discussions

ANNEXURE -G

OVERVIEW

Your Company is engaged in the business of processing of Organic Soyabean seeds, of processing and trading of organic and Non- genetically modified organisms (non-GMO) agricultural products such as Soya, Maize (Corn), Wheat, Flax seeds and Mustard, Oil, Rice, Pulses, Herbs, Spices, and other grains. The soya products are used as nutritive supplement in various food products across the world. Indian Soyabean is a non GMO crop and has an advantage over other competing origins. The demand of non GMO protein rich soya is continuously growing and we are well placed to harness this opportunity.

MARKET REVIEW

As per Soybean Processors Association of India (SOPA), Indias soybean output for soya season 2018-19 was 110 Lakh ton as Compare to 2017-18 (September- October) was 83.5 lakh ton. overall availability of soybean was very good during the year In Madhya Pradesh Indore and Ujjain was among the top district producing the Soyabean as compare to other district this ensure the proper supply of raw material thorough out the year.

An increase of 5.3% over last year. With growing public awareness about the organic products and preference branded organic products sales are growing .People are switching from tradition of purchasing local mixed products to the organic products. It is anticipated that this will give additional growth of 10% to this segment. Foreign Market is a growing place for the consumption of the products of the company whether in the form of powder, granules or any other form and your Company has got its significant presence in US, Canada, South Africa.

India has been losing competitive advantage in its traditional markets of South East Asia as landed prices of its Soyameal are higher as compared to supplies from other destinations. However Europe who prefers non GMO Soyameal is offering good opportunity. Indian meal is getting premium in these markets. To support farmers and to maintain remunerative oils seed prices for them, from time to time government has been increasing import duty on oil imports. Presently they are at highest level in last one decade. IMD monsoon forecast is encouraging for the ensuing season. With normal rains spread across soybean production areas business activity is expected to be good during coming season.

FINANCIAL PERFORMANCE

Your Company has achieved a total turnover of Rs. 18665.40775 Lakhs (Previous year Rs. 7073.39823 Lakhs) including exports of Rs. 4927.62194 Lakhs (Previous year Rs. 4787.1444 Lakhs) and Profit before Tax of Rs. 254.481052 Lakhs (Previous year Rs. 194.14904 Lakhs) and Profit after TaxofRs. 185.23005 Lakhs (Previous year Rs. 134.03265 Lakhs).

BUSINESS STRATEGY ANALYSIS AND OUTLOOK

Your company enjoys a strong consumer loyalty for its brand Soni Soya and strong institutional relationships for its value added soya products and organic products. In both product categories the company has enhanced its market share in the year gone by. The company intends to continue its focus on these markets and products.

Having created a niche market segment for itself through its high quality soya products and strong distribution network. “SONI SOYA” brand is positioned strongly in minds of customers and it caters to the premium segment of the market.

Your companys philosophy is to serve its customers the best quality of products in line with global standard. The recent commissioning of the advanced state of the art manufacturing facility is in tune with company philosophy of “fuelled by growth & driven by technology.’The all products from our Company in the industry is organic which stands the test of the highest stringent quality norms across the globe. Thus, it intends to expand its geographical reach by developing strong distribution network outside the existing markets. This financial year, your company has initiated a business transformation exercise for the sales and marketing functions of Soya and other products. This initiative is aimed at facilitating Soni Soya to significantly improve its market share - to achieve quantum leap in the next few years.

Your company plans to invest purposefully on focused marketing activities in existing as well as new markets to further strengthen the brand positioning and recall. To support this activity your company has invested in development of new product packaging.

Your company is focused on maximizing the profits in the entire value chain from sourcing of Soyabean seed to marketing and distribution of soya meal.

It is further looking to increase its competitiveness by making investment in modernizing the operations to achieve greater operational efficiency, flexibility in producing various products in a cost-efficient manner.

Your company differentiates itself from the competition by having developed the capabilities to meet the stringent global quality norms. It has got the distinction of being able to produce high quality value added soya products that go into the critical food and pharmaceutical applications. In order to further improve the overall business margin, your company is focusing on innovation, R&D and investment in new technology and is confident of developing diversified products that will help us to cater to the needs of our customers and delivering the high return to shareholders.

THREAT

The availability of Soyabean seed depends on monsoon. The price parity and supply position of Soyabean determines the plant utilization and profitability.

Prices depend on real impact of monsoon rains and acreage data in the second half of 2019. Any weather disturbances during sowing and growing periods or in the US, could triggers sharp recovery in the domestic market.

Global demand and fluctuation in foreign exchange rates may affect export business.

INFORMATION & TECHNOLOGY

Your Company has implemented such technologies successfully and helping in business analytics and efficiency. Your Company views these investments as a strategic tool to enhance its operational efficiencies.

In line with overall growth objective and strengthening of infrastructure base, the company continues to invest in Information Technology (IT). Through implementation of these softwares the company has improved its efficiencies.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has a well established framework of internal controls in all areas of its operations, including suitable monitoring procedures and competent personnel. In addition to statutory audit, the financial controls of the Company are reviewed by the Internal Auditors, who report their findings to the Audit Committee of the Board. The Audit Committee is headed by an Independent Director and this ensures independence of functions and transparency of the process of supervision. The Committee meets to review the progress of the internal audit initiatives, significant audit observations and planning and implementation of follow-up action required.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human Resources is considered as key to the future growth strategy of the company and looked upon to focus its efforts to further align human resources policies, processes and initiative to meet its business needs. The Management of your Company put utmost efforts to strengthen the existing work force and retaining them to enhance the human resource capability in the Company.

In order to focus on keeping employees abreast of technological and technical developments, the company provides opportunity for training and learning. Thus, your company is creating a collaborative and innovation-driven work culture to attract, retain and develop the best talent in the industry.

There are 41 permanent employees on the rolls of Company at March 31,2019.

The Directors of your Company deeply appreciate the spirit and commitment of its dedicated team of employees.

CAUTIONARY STATEMENT

Estimates and expectations stated in this Management Discussion and Analysis Report may be “forward-looking statements” within the meaning of applicable securities, laws and regulations. Actual results could differ materially from those expressed or implied.

Important factors that could make a difference to your Companys operations include economic conditions affecting demand/ supply and price conditions in the domestic and international markets, changes in the Government regulations, tax laws, and otherstatutes and incidental factors.