Vimal Oil and Foods Ltd Management Discussions

ECONOMY OVERVIEW

In 2018, the global economy began its journey on a firm footing with estimated global economic growth of 3.6% (Source: World Economic Outlook by International Monetary Fund (IMF)). During the second half of 2018, this rate of development gradually declined, owing to impending US-China trade dispute and some slowdown across developed markets. Emerging and developing markets of Asia maintained their steady progress at 6.4% during 2018. However, its important to note that Indias economy expanded at 7.1% in 2018 vis-a-vis 6.7% in 2017, whereas Chinas growth deteriorated from 6.9% in 2017 to 6.6% in 2018 (Source: IMF). Sub-Saharan Africas economy also sustained a steady rise of 3% during the year.

India continues to be one of the fastest growing major economies in the world and is expected to be among the worlds top three economic powers in the next 10-15 years. The Indian economy is expected to improve and close the year 2019 with a GDP growth of 7.3% (Source: IMF).

SEGMENT ANALYSIS AND REVIEW

The sales including other income for the year under reviewed was Rs. 2024.30 Lakhs as against Rs. 42232.27 Lakhs for the previous financial year.

SUBSIDIARIES

At present, M/s. Brinda Exports Limited is Wholly-Owned Subsidiary of the Company.

The turnover of M/s. Brinda Exports Limited for the year under review was Rs. 59.49 Lakhs. The Profit before tax for the year under review is Rs. 1.09 Lakhs and the profit after tax for the year under review is Rs. 0.75 Lakhs.

During the financial year 2018-19, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129 of the Companies Act, 2013, the Company has prepared consolidated Financial Statement of the Company as on March 31,2019, which forms part of this Annual Report.

FUTURE OUTLOOK

The Government of India is taking various steps to boost the infrastructure development in the country. Looking at the huge potential for growth in the infrastructure sector, your company sees a good outlook for the coming years and the Company will benefit from the same.

STRENGTHS AND OPPORTUNITIES

In the light of the financial turmoil in the developed countries and subsequent impact in India and more specifically in the Commodity prices your Company has taken steps to strengthen its position and seek out opportunities in adversity. The approach has been on containing costs and growing brands. The Company has been taking measures to keep its brands relevant to the customers and also ensuring that they remain competitively priced. It is also exploring all possible avenues to reduce costs of inputs and raw materials without compromising on the quality of the product.

THREATS & CHALLENGES

For the edible oils industry, the biggest challenges being faced are now are policy related. As edible oils are not governed by the antidumping regulation and with consumption far superseding domestic production, imports are a necessity in this industry. As a result of which margins of edible oil manufacturers and refiners are quite low. Your company is taking necessary steps to address this issue.

Business segments like dairy products and snack foods are highly competitive with several larger multi-national companies now present in India with world renowned brands. Competing for a piece of the pie will be an uphill battle, but it is one your company is well geared to take on.

RENEWABLE ENERGY

Windmills have always been considered a clean and green means of generating power. So as their contribution towards environmental conservation, the company installed them in the coastal area of Gujarat, way back in 1996. As fuel generally accounts for a major chunk of Production costs, this also made sound business sense, by acting as a shield against ever spiraling fuel prices and helping an environment. The company has installed three Windmills.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

There are adequate Internal Control Systems for financial reporting and time bound compliance of applicable laws and regulations. An independent firm of Chartered Accountants is carrying out internal audit of the books of accounts of the Company on a quarterly basis. The Audit Committee also reviews from time to time, adequacy and effectiveness of these internal control systems.

TRANSPARENCY IN SHARING INFORMATION

Transparency refers to sharing information and acting in an open manner. Processes and information are directly accessible to those concerned with them, and enough information is provided to understand and monitor them. Your Company believes in total transparency in sharing information about the business operations with all its stakeholders. Your Company strives to provide maximum possible information about its business operations with all its stakeholders. Your Company strives to provide maximum possible information in this report to keep stakeholders updated about the business performance.

RISK & CONCERN

As ordered by the Honble National Company Law Tribunal, Ahmedabad Bench, the Company is under the Corporate Insolvency Resolution Process (CIRP).

The Company is exposed to external business risk, internal risk and financial risk. External business risks arise out of variations in prices of raw-material (crude oil) etc. Internal risks basically cover operational efficiency and ability to withstand competition. Financial risks are basically in the nature of interest rate variations.

FINANCIAL PERFORMANCE

An Overview of the financial performance is given in the Boards Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems.

HUMAN RESOURCES

At Vimal Oil & Foods Limited, equal importance is given to the development of the companys human resource. VOFL has always recruited the best talent available in the industry - people with years of expertise and experience behind them. Moreover, frequent inhouse training sessions are conducted in all departments - be it Production or Accounts or Sales & Marketing - to not just increase their knowledge base but also improve their skills. This self-reliance not only boosts morale and confidence, but also contributes towards a healthier bottom.

CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis Report detailing the Companys objective, projections about the future, estimates, expectations or predictions including, but not limited to, statements about the Companys strategy for growth, market position and expenditures may be "forward- looking statements" within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand / supply and price conditions in the domestic markets in which the Company operates, Changes in the Government regulations, tax laws and other statutes or other incidental factors.

Date: 31/08/2019	For, Vimal Oil & Foods Limited
Registered Office:	(Company under Corporate Insolvency Resolution Process)
At. Village - Hanumant Heduva,	Jayesh C. Patel
Nr. Palavasna Railway Crossing,	Chairman & Managing Director
Highway, Mehsana - 384 002
Gujarat-INDIA