Nimbus Foods Industries Ltd Management Discussions.

a. Industry Structure and Developments:

Your Company has terminated franchise agreement with Modern Food Enterprises Private Limited and entered into Packed Finished Goods Agreement with Kanak Foods Private Limited for manufacturing the Bread and other Bakery products under the brand name Mactos. Companys Bakery portfolio includes biscuit, bread, cake and rusk. Bread and Biscuits are the largest of these categories and has attracted a vast array of competitors ranging from large national local companies to smaller regional players. Cake, Rusk and bread Overall Bakery, despite the general economic sluggishness, is still growing at 11-12%, with specific segments within that, growing faster – at the top end, driven by differentiation and new tastes, experiences, and at the bottom end, through availability and affordability.

The food market itself has seen some interesting structural changes in the past few years with the emergence of a diversified palate of choices across functional and indulgent products. Additionally, with greater afluence and exposure, consumers are increasingly migrating from unbranded commodities, sold loose, to branded and packaged solutions that are hygienic and convenient. The Company, therefore expects the overall Bakery market to grow 12-15% in the coming year.

b. Business Strategy

Your Companys strategy is based on inspirational growth, in the context of the opportunities and challenges that the Indian market presents – an increasing consumer appetite to continually upgrade, irrespective of price points, demanding value for money propositions at all times and a more intense and vibrant competitive scenario.

The focus continues to be on profitable growth, driven through innovation and operational excellence right through the value chain. Revenue and cost management form an intrinsic part of operational excellence and will continue to be monitored closely for improvement. The role of innovation in your Company is about creating new sources of value. These include completely new or renovated products and packs that create greater consumer delight or the application of new technology that reduces cost and increases quality delivery, or a process innovation that reduces time to completion and increases efficiency. This comprehensive view of innovation enables your Company to experiment and pilot new initiatives and scale those that are successful. An in-depth understanding of consumers and what excites and motivates them forms the backbone of all our actions – from product design and benefit propositions, to their delivery. Building, improving and maintaining consumer preference and purchase form the basis of your Companys business and long-term success.

c. Segment wise Performance:

The Companys primary business is bakery and confectionery. The food related products of the Company incorporate product groups viz. Bakery and Bread which have similar risks and returns and are in one segment only.

d. Recent Trend and Future Outlook:

The domestic market for packaged, branded bakery product is expected to grow 14-15% in the near term. The challenge to profitable growth comes from the trend in commodity prices, the general economic sentiment and a macro environment that contributes to operational stability in the manufacturing units and markets. Simultaneously, the Indian market opportunity and food market growth will attract new local and international players with deep pockets and a differentiated capability in their domains of operation to enter and expand operations in India. Creating a leadership position in this environment will demand that your Companys brands and their propositions are relevant and exciting for consumers and differentiated enough to create a higher preference and purchase. Your Companys focus is on differentiating its products and continually renovating and innovating them to create unique and superior experiences for its consumers and customers. This, combined with effective cost management will generate profitable growth.

e. Internal Control Systems and their Adequacy:

The Company has adequate systems of internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business.

f. Financial Performance with respect to operational performance:

The Financial performance of the Company for the year 2016-17 is described in the Directors Report under the head operations.

g. Human Resources/ Industrial Relations:

Relation between management and the employees at all level remained healthy and cordial throughout the year. The management and the employees are dedicated to achieve the corporate objectives and the targets set before the company

h. Cautionary Statement:

Statement in this Management Discussion and Analysis Report, Describing the Companys objectives, estimates and expectations may constitute Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.

For and on behalf of the Board
Sanjay Mangal
Place : Ahmedabad Chairman & Director
Date : 12/08/2017 (DIN: 05355390)