MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Indian Sugar Confectionery Industry is benefiting from the Country’s economic boom and growth in consumer spending. The strong economic growth of the last few years and increasing brand consciousness among the new wealthy Indian middle class combined with a greater exposure to western lifestyle has created hunger for branded sugar confectionery products in the Country.

This higher consumer spend is also driven by the new sound shopping mall culture.

Over the past five years the Indian Sugar Confectionery has been growing at a rapid place and is expected to sustain its growth in the coming years.

Chocolate Industry in 2015 at a Glance

The chocolate industry offers a wide variety of opportunities for the small business owner, weathers economic recession well and is growing despite increased health-consciousness and calorie counting. Growth will be driven by population growth as well as expansion into new markets, product innovation and rising disposable income levels leading to greater purchasing of brmium offerings.

Chocolate is widely popular for individual consumption, gift giving and cooking. Due to the dominance of large-scale production dynasties, franchises and small businesses tend to focus on unique or specialty items or services. Unique chocolates may be from a region famous for a particular technique, baked on-site or offer a different take on tradition, while specialty services tend to focus on giftpackaging or delivery.

India’s Confectionery market is expected to grow by almost three-quarters in 4 years as the burgeoning middle class consumes more gums and jellies, and choclate still dominates.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS:

Economic growth and development has resulted in rising disposable incomes, especially among the middle-class.

Chocolate Industry Franchise Opportunities:

With the boom in the software industry and other economic activities of the brsent day, the earning levels of the people in general at both urban and rural levels have recorded a discernible improvement in India. This has resulted in ever growing demand for the confectionery products entailing immense potential for the chocolate industry. This apart, there are multinational companies operating in the market are outsourcing their production needs to a few selected processing companies. Our company has been successfully catering to such requirements of some of the multi-national companies.

The chocolate industry is characterized by a high level of consolidation and fierce competition between the companies on all levels of the value chain. This competition has resulted in erosion of prices and margins. Further, availability of major raw material suffers from seasonal fluctuation. By adopting effective cost control measures and also advance planning methods in procurement of the material, the company can overcome these threats.

PERFORMANCE:

During the year under review your company has reached a turnover of 1024 Lakhs. This contributes major income from contract manufacturing.

We are glad to share with you that, Sambr Nutritions has been awarded “Best in Class” among the manufacturing facilities with Mondeleze International, in the Asia Pacific Region. Also, Sambr has successfully upgraded facilities in Plant by installing additional equipments for reduction of cost.

Material Developments in Human Resources and Industrial Relations Front:

Your Company has undertaken certain employees’ Development initiatives which have very positive impact on the moral and team spirit of the employees. The Company has continued to give special attention to Human Resources/ Industrial Relations development. Industrial relations remained cordial throughout the year and there was no incidence of strike, lock-out etc.

Your Company’s human resource management systems and processes are designed to enhance employee engagement, organizational capability and vitality so as to ensure that competitive superiority and capable of achieving your Company’s ambitious plans for growth.

INTERNAL CONTROL SYSTEM 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. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely brparation of reliable financial information.

An Internal Auditor carries out the internal audit of the Company operations and reports its findings to the Audit Committee on a regular basis. Internal Audit also evaluates the functioning and quality of internal controls, and provides assurance of its adequacy and effectiveness through periodic reporting.