Manbro Industries Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian FMCG sector has experienced remarkable growth, driven by robust consumer demand and rising prices of essential goods. As the fourth-largest sector in the Indian economy, it has reached a market size of $121.8 billion as of 2023. With a projected CAGR of 14.9%, the sector is poised to expand to $220 billion by 2025.

Notably, your company has strategically entered the FMCG market to tap into this growth potential. By adopting global trends and best practices, the company aims to enhance its operational scale, boost global competitiveness, and improve financial flexibility. These efforts are aligned with the companys objectives to drive revenue growth, increase production volumes, expand market share, and maximize shareholder returns.

SEGMENT WISE OR PRODUCT- WISE PERFORMANCE

Your company mainly operates in unique product segments, within domestic and global market. The management of your Company has continuously reviewed the performance and they found it quite satisfactory. The business is expected to grow in the coming years. However, highlights of the financial performance of the company are given below.

OUTLOOK& THREATS, RISK & CONCERNS:

The areas of operations of the Company are largely challenged by High competition from established players. Volatility in raw material prices affects production costs and profit margins. However, with the strong team in place of the Professionals, the Company is poised to meet all the challenges and the Board is confident to meet all the challenges to which the Company may be exposed. The Company is exposed to specific risks that are particular to its business, including interest rate volatility, economic cycle, market risk and credit risk. The management continuously assesses the risks and monitors the business and risk management policies to minimize the risk.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY

The Company has a well-established and comprehensive internal control system. Documents, policies and authorization guidelines comply with the level of responsibility and standard operating procedures specific to the respective businesses. Observation made in internal audit reports on business processes, systems, procedures and internal control and implementation status of recommended remedial measures by Internal Auditors are regularly presented to and reviewed by the Audit Committee of the Board. The system of internal control is being improved to ensure that all assets are safe and protected against loss from unauthorized use or disposition, and that all transactions are authorized, recorded and reported correctly. The Company regularly conducts internal check, using external and internal resources to monitor the effectiveness of internal control in the organization. It strictly adheres to corporate policy with respect to financial reporting and budgeting functions. The Audit Committee of the Board of Directors deals with significant control issues and instructs further areas to be covered.

FINANCIAL PERFORMANCE

The table below gives an overview of the financial results for2023-24and 2022-23:

(INR in ‘000)

HUMAN RESOURCE DEVELOPMENT

Human resource remains a cornerstone of your company. The Company also recognizes the importance of providing training and development opportunities to its people to enhance their skills and experiences, which in turn enables the Company to achieve its business objectives. Personnel developmental initiatives including training, both technical and managerial, are regularly conducted to enhance human potential. The Company recognizes that its employees are its principal assets and that its continued growth is dependent upon the ability to attract and retain quality people.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which would be different from what the Directors envisage in terms of the future performance and outlook. Investors are cautioned that this discussion contains forward looking statement that involve risks and uncertainties including, but not limited to, risks inherent in the Companys growth strategy, dependence on certain businesses, dependence on availability of qualified and trained manpower and other factors discussed. The discussion and analysis should be read in conjunction with the Companys financial statements and notes on accounts.