Sumuka Agro Industries Ltd Management Discussions.

The Management of the Company is pleased to present its analysis on the Companys performance and its outlook, opportunities and challenges prepared in compliance with the Corporate Governance requirement as laid down in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

(a) Industry structure and developments

The nuts and dry fruits industry in India is a very old one. However, in terms of demand, consumption has taken off only in recent years. From being a ‘luxury product, it has shifted to a ‘necessity category over the last few years. At $2.5 billion, consumption in India is just 3 per cent of global demand, though India has 15 per cent of the worlds population. Currently, the Company is engaged in the business of Trading and Retailing of a wide array of Dry Fruits Products. In this year your Company has taken an ambitious leap and plans to expand its presence across the country.

(b) Opportunities and Threats

Opportunities

1. Indian consumer with constantly expanding wallet and higher aspiration constitutes the largest opportunity for your Company

2. Changing lifestyle and increasing expenditure on health and nutritional foods.

3. The demand of dry fruits is rising because of a combination of factors such as increasing awareness of health needs, increasing disposable income levels, better availability, right packaging, consistent quality, adequate product communication (labelling), newer products such as hazelnuts, pecan nuts, etc, are leading to a healthy growth of more than 10 per cent year on year for the nuts and dry fruits industry in volume terms.

4. The product is that its available all year. Consumers are becoming aware about the health benefits associated with dry fruit consumption.

Threats

1. Changes in Regulatory Policies.

2. Increase in raw material prices,

3. Change in weather conditions

4. Unexpected market factor (possible changes in customer preference)

5. Impact of currency fluctuation.

6. Competition from domestic as well as international front

One of the most important issue is taking into consideration the needs & requirement of the customer & developing the services according to them.

(c) Segment–wise or product-wise performance

The Company is operating in single primary business segment i.e. Trading & Retailing of Dry fruits Products.

(d) Outlook

The food sector in India is poised for immense growth and greater contribution in world foods trade every year. The Company is striving to improve the quality and productivity especially in the promising sectors and considering the current economic trends and also barring unforeseen circumstances is confident of achieving gross revenues and operating margins. We take great pride in importing quality products from virtually every corner of the world. Our essence lies in providing quality products at reasonable prices. The Company uses social media posts educate customers about health benefits of dried berries, exotic nuts and healthy seeds.

(e) Risks and concerns

Primary risk to the business will be on account of adverse changes to the economy. Volatility in commodity prices is the other risk. More demand of the products would be Seasonal / Festival demand. Possible changes in customer preference is also a Risk factor.

(f) Internal control systems and their adequacy

Internal Control Systems has been designed to provide reasonable assurance that assets are safeguarded, transactions are executed in accordances with managements authorization and properly recorded and accounting records are adequate for preparation of financial statements and other financial information. Internal check is conducted on a periodical basis to ascertain the adequacy and effectiveness of internal control systems.

(g) Discussion on financial performance with respect to operational performance

The Company earned total revenue of 1,43,18,033 as against 1,77,93,481 in the previous year. A loss of 31,55,164 (22.04% of Total Revenue) was reported during the financial year under review, as compared to a loss of 32,37,248 (18.19% of previous years Total Revenue) for the previous financial year.

(h) Material developments in Human Resources / Industrial Relations front, including number of people Employed

Human resource has the key role in the growth and development of our organization. The Company aims to develop the potential of every individual associated with the Company as a part of its business goal. Respecting the experienced and mentoring the young talent has been the bedrock for Sumukas successful growth.

We believe that our human capital is our greatest strength and is the driver of growth, efficiency and productivity. Constant efforts are made to create a working environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of employees. As on 31st March 2019, the total number of permanent employee in the Company was 3. The Companys performance on the Industrial Relations front continues to be quite satisfactory.