Rating Advisory

May 10, 2019 | Mumbai A dar sh Bi r m echaO r i gi nal Tem pl at e123

Naturo Food and Fruit Products Private Limited

Advisory as on May 10, 2019

This rating advisory is provided in relation to the rating of Naturo Food and Fruit Products Private
Limited

The key rating sensitivity factors for the rating include:

 Scale of operations and profitability

 Working Capital Management
 Future capex plans and funding thereof

CRISIL Ratings has a policy of keeping its accepted ratings under constant and ongoing
monitoring and review. Accordingly, it seeks regular updates from companies on business and
financial performance. CRISIL is yet to receive adequate information from Naturo Food and Fruit
Products Private Limited (Naturo) to enable it to undertake a rating review. CRISIL is taking all
possible efforts to get the rated entity to cooperate with its rating process for enabling it to carry
out the rating review.

CRISIL views information availability risk as a key factor in its assessment of credit risk. (Please
refer to CRISIL Ratings publication dated April 30, 2012 - 'Information Availability - a key risk
factor in credit ratings')

If Naturo continues to delay the provisioning of information required by CRISIL to undertake a

rating review then, in accordance with circular SEBI/HO/MIRSD/MIRSD4/CIR/P/2016/119 dt Nov
1, 2016 and SEBI/HO/MIRSD/ MIRSD4/ CIR/ P/ 2017/ 71 dt June 30, 2017 issued by Securities
and Exchange Board of India, CRISIL will carry out the review based on best available
information and issue a press release.

About the Company

Incorporated in 1987 and based in Bangalore, Naturo is promoted by Mr Vikram Reddy and family.
The company is engaged in manufacture and sale of fruit bars and fruit bites under its ‘Naturo’ brand.

Please note: This advisory should not be construed as a rating reaffirmation.

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 Rating Rationale
February 19, 2018 | Mumbai

Naturo Food and Fruit Products Private Limited

Rating Reaffirmed

Rating Action
Total Bank Loan Facilities Rated Rs.8.3 Crore
Long Term Rating CRISIL B/Stable (Reaffirmed)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities

Detailed Rationale
CRISIL has reaffirmed its rating on the long term bank loan facilities of Naturo Food and Fruit Products Private
Limited (Naturo) at 'CRISIL B/Stable'.

The rating continues to reflect Naturo's modest scale of operations in a competitive confectionery industry and its
weak financial risk profile marked by negative net worth and weak debt protection metrics. These rating weaknesses
are partially offset by the extensive experience of the promoters in the confectionery industry and the strong brand
recall of 'Naturo'.

Key Rating Drivers & Detailed Description

Weaknesses
* Small scale of operations in the competitive confectionery industry
The company's scale of operations has been small with top line of Rs.17.1 crores for the year ended March 31, 2017.

* Weak financial risk profile

Naturo has weak financial risk profile marked by weak gearing and debt protection metrics and a negative net worth.
The company generated negative operating profit and accruals in the three years ended March, 2017. This has
resulted in negative net worth of Rs.24 crores as on March 31, 2017. Consequently the adjusted gearing and interest
coverage were negative in the last three years ended March, 2017.

Strengths:
* Extensive experience of promoters in confectionery industry and their established customer and supplier
relationships
Naturo is promoted by Mr Vikram Reddy and family. It belongs to the erstwhile Nutrine group which was promoted by
Mr.BV Reddy in 1952.

* Working capital intensive operations

The company has large working capital requirements with gross current assets (GCA) to the tune of 120 to 210 days
for the past three years ended March 31, 2017. The working capital requirements have remained high on account of
moderate debtors and high inventory holding period.
Outlook: Stable
CRISIL believes Naturo will maintain its business risk profile over the medium term from the extensive experience of
its promoters in the confectionery industry. The outlook may be revised to 'Positive' if Naturo improves its scale of
operations along with improvement in profitability leading to improved cash accruals coupled with an improvement in
its financial risk profile, particularly gearing. Conversely, the outlook may be revised to 'Negative', if the company's
financial risk profile, particularly liquidity deteriorated further owing to more than expected debt-funded capex or
stretch in working capital requirements or due to delays in fund support from promoters to service debt.

1
About the Company
Incorporated in 1987 and based in Bangalore, Naturo is promoted by Mr Vikram Reddy and family. The company is
engaged in manufacture and sale of fruit bars and fruit bites under its 'Naturo' brand.

Key Financial Indicators

Particulars Unit 2017 2016
Revenue Rs. Cr. 17.1 19.6
Profit After Tax (PAT) Rs. Cr. -5.9 -4
PAT Margins % -34.5 -20.2
Adjusted Debt/Adjusted Net worth Times -0.4 -0.5
Interest coverage Times -3.9 -2.7

Any other information: Not applicable

Note on complexity levels of the rated instrument:

CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are
available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that
they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific
instruments.

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Annexure - Details of Instrument(s)
Issue Rating
Name of Date of Coupon Rate
ISIN Maturity Date Size Assigned
Instrument Allotment (%)
(Rs. Crs) with Outlook
CRISIL
NA Cash credit NA NA NA 6
B/Stable
CRISIL
NA Long term loan NA 10.75 Mar-2023 1.35
B/Stable
Proposed long
CRISIL
NA term bank loan NA NA NA 0.95
B/Stable
facility

Annexure - Rating History for last 3 Years

Start of
Current 2018 (History) 2017 2016 2015
2015

Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund-based Bank LT/S CRISIL No Rating No Rating CRISIL
8.3 23-11-16 -- --
Facilities T B/Stable Change Change B/Stable
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.

Annexure - Details of various bank facilities

Current facilities Previous facilities
Amount Amount
Facility Rating Facility Rating
(Rs.Crore) (Rs.Crore)
CRISIL CRISIL
Cash Credit 6 Cash Credit 6
B/Stable B/Stable
CRISIL CRISIL
Long Term Loan 1.35 Long Term Loan 1.56
B/Stable B/Stable
Proposed Long Term CRISIL Proposed Long Term CRISIL
.95 .74
Bank Loan Facility B/Stable Bank Loan Facility B/Stable
Total 8.3 -- Total 8.3 --

Links to related criteria

CRISILs Bank Loan Ratings - process, scale and default recognition
Rating Criteria for Fast Moving Consumer Goods Industry
CRISILs Bank Loan Ratings

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This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale that we provide (each a “Report”). For the avoidance of doubt, the term
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Report does not create a client relationship between CRISIL and the user.

We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken into
consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute an investment
advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind or
otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for any investment decision
within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any
securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as
of the stated date of their issue. CRISIL assumes no obligation to update its opinions following publication in any form or format although CRISIL may disseminate its
opinions and analysis. CRISIL rating contained in the Report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors
and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and take their own professional
advice before acting on the Report in any way.

5
Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guarantee the
accuracy, completeness or adequacy of the Report, and no CRISIL Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the
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legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Report even if advised of
the possibility of such damages.

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or from obligors. CRISIL’s public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of India (and other
applicable regulations, if any) are made available on its web sites, www.crisil.com (free of charge). Reports with more detail and additional information may be available
for subscription at a fee – more details about CRISIL ratings are available here: www.crisilratings.com.

CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL does not perform an audit and
undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL keeps certain activities of its business
units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISIL may have
information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certain non-public
information received in connection with each analytical process. CRISIL has in place a ratings code of conduct and policies for analytical firewalls and for managing
conflict of interest. For details please refer to: http://www.crisil.com/ratings/highlightedpolicy.html

CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on any instrument
of any company rated by CRISIL you may contact CRISIL RATING DESK at [email protected], or at (0091) 1800 267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL.

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