Grill Splendour Services Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The following Management Discussion and Analysis Report has been prepared in accordance with the Regulations of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 with a view to provide an analysis of the business and financial statements of the Company for the F.Y. 2023-24, hence it should be read in conjunction with the respective financial statements and notes thereon. The Companys management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present the Companys state of affairs and profits for the year. Investors are cautioned that this discussion contains forward looking statements that involve risks and uncertainties. The Company undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Business Overview:

We are a chain of gourmet Bakery and Patisserie spread across Mumbai through 18 retail stores, a centralized production facility and multiple corporate clients. Out of these 18 retail stores, 4 stores are running under the franchisee model (franchisee owned, and company operated) and rest 14 stores are owned by us. We offer fresh food products from traditional to ‘made to order as required by the Customers. Both our Promoters individually have 30+ years of experience in Hospitality industry.

Grill Splendour Services Private Ltd. was incorporated in November 2019 as a hospitality company to acquire the bakery and confectionary business along with brand Birdys Bakery and Patisserie from WAH Restaurants Private Limited. The acquisition was done via a Business Transfer and Intellectual Property Assignment Agreement dated December 27, 2019 (Acquisition Agreement). After that the company proceeded to invest in the business and grow the brand and spread presence.

The brand Birdys was originally set up as "Birdys by Taj". Over a period, it was sold to WAH Restaurants Private Limited and from them the same was acquired by us vide above referred Acquisition Agreement. The primary focus of our Company was to bring back the quality and sheen of the brand. We did that over a period of last few years by a series of initiatives. We are engaged in the sale of following broad categories of products:

Cakes & Pastries Food Sale Beverages Desert Sales

Economic Outlook:

The Indian bakery market size reached US$ 12.6 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 29.4 Billion by 2032, exhibiting a growth rate (CAGR) of 9.6% during 2024-2032. The growing population and changing consumer preferences, driven by factors such as western food trends, increased consumption of cakes and RTE food, and expanding retail and e-commerce sectors, are fueling the Indian bakery market growth/demand. This, in turn, is prompting manufacturers to introduce healthier options and invest in R&D to meet the evolving consumer demand.

Business Outlook:

The Company earned total income of Rs. 1,34,652/- (in thousand) as compared to Rs. 1,52,935/- (in thousand) in the previous

financial years.

Internal control system and their adequacy:

The Company has adequate internal control procedures commensurate with its size and nature of business. The business control procedures ensure efficient use and protection of Companys resources and compliance with policies, procedures and statutory requirements. Further, auditors are appointed to carry audit assignments and to periodically review the transactions across the divisions and evaluate effectiveness of internal control systems.

Risk Management:

The Board of Directors of the Company has designed a Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Companys businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual / strategic business plans and in periodic management reviews.

Financial Performance:

The Companys financial performance is covered in Directors Report to the Members.

Opportunities for Bakery Business in 2024 in India

Growing Demand for Artisanal and Specialty Baked Goods: With the increasing popularity of gourmet and artisanal food, there is a growing demand for specialty baked goods such as croissants, sourdough bread, and artisanal pastries. This presents an opportunity for bakeries to diversify their product offerings and cater to the changing consumer preferences.

Increasing Demand for Healthy and Organic Baked Goods: With the growing health consciousness among Indians, there is a rising demand for healthy and organic baked goods. Bakeries can capitalize on this trend by introducing healthier options such as whole wheat bread, gluten-free products, and sugar-free desserts.

Rise of Online Food Delivery and E-commerce: The growth of online food delivery and e-commerce platforms has made it easier for bakeries to reach a wider customer base. Bakeries can partner with these platforms to increase their sales and expand their customer reach.

Growing Demand for Customized and Personalized Cakes: With the increasing popularity of social media, there is a growing demand for customized and personalized cakes for special occasions such as birthdays, weddings, and anniversaries. Bakeries can capitalize on this trend by offering customized cake designs and flavors.

Threats for Bakery Business in 2024 in India

Intense Competition: The bakery industry in India is highly competitive, with many established players and new entrants vying for market share. This competition can lead to pricing pressures and make it difficult for bakeries to maintain their market share.

Rising Raw Material Costs: The cost of raw materials such as flour, sugar, and butter is increasing, which can affect the profitability of bakeries. This can be a major threat to small and medium-sized bakeries that may not have the economies of scale to absorb these costs.

Changing Consumer Preferences: Consumer preferences are constantly changing, and bakeries need to adapt to these changes to remain relevant. Failure to adapt to changing consumer preferences can lead to a decline in sales and revenue.

Stringent Food Safety Regulations: The Indian government has introduced stringent food safety regulations, which can be a challenge for bakeries to comply with. Failure to comply with these regulations can lead to penalties and reputational damage.

Outlook:

The outlook for the bakery business in India in 2024 is highly promising and optimistic. The Indian bakery market has been experiencing significant growth driven by various factors such as the increasing population, changing consumer preferences, influence of western food trends, and the expansion of retail and e-commerce sectors. These factors are expected to continue fueling the demand for bakery products in the country.

Key Factors Driving Growth:

Growing Population: The increasing population in India is leading to a higher demand for bakery food products, creating a substantial market opportunity for manufacturers.

Changing Consumer Preferences: Consumers in India are increasingly adopting western food trends, which includes a higher consumption of bakery products like bread, biscuits, cakes, and pastries.

Expansion of Retail and E-commerce Sectors: The expanding retail and e-commerce landscape in India is providing easier access to bakery products for consumers, driving market growth.

Health Awareness: Rising health consciousness among individuals is prompting manufacturers to introduce healthier options like low trans-fat, multi-grain, and whole wheat bakery products.

Convenience and Affordability: Bakery products offer convenience and affordability to consumers, making them popular choices across various demographics.

For and on behalf of the Board
Vandana S. Rao	Srinidhi V Rao
Chairperson & Whole-Time Director	Managing Director
DIN: 06395396	DIN: 08626008
Date: June 24, 2024
Place: Mumbai