DIAMONDYD

RefNo.: PSL/2019-20/CS/SE/45 Date: 24" September, 2019 To, To, ListingDepartment CorporateRelationshipDepartment National StockExchange ofIndia Limited BSE Limited ExchangePlaza, 5"Floor P.J. Towers, PlotNo. C/1, GBlock Dalal Street BandraKurlaComplex Mumbai-400 001 Bandra( E),Mumbai -400 051 Symbol: DIAMONDYD SecurityCode: 540724 SecurityID : DIAMONDYD Sub.: Corporate Presentation oftheCompany madein Investorand AnalystMeet2019 Dear Sir/Madam, With referenceto ourletterRefNo.: PSL/2019-20/CS/SE/44 dated 19" September, 2019, wherein we have intimated regarding hosting ofan Investor & AnalystMeet onTuesday, 24'" September, 2019in Mumbai. Pursuant to Regulation 30 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find attached herewith Corporate Presentation of the Company made in aforesaidmeet. Theaforesaidpresentation is also availableontheCompany’s websitewww.yellowdiamond.in This is foryourkind information andrecord. Thankingyou, Yoursfaithfully, ForPrataap Snacks Limited Niele Om PrakashPandey Company Secretary & Compliance Officer Encl: As above Prataap Snacks Limited (Formerlyknownas PrataapSnacksPvt. Ltd.) Office : Khasra No. 378/2, 378/1/4, NemawarRoad, NearMakrand House,Gram Palda,Dist. : Indore(M.P.) India Phone: ++91-731-2437600,2437602-10 E-mail : info@yellowdiamond.in CIN No. L15311MP2009PLC021746 Disclaimer Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements. Prataap Snacks Limited (PSL) will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward looking statements to reflect subsequent events or circumstances. 2 1 2 3 4 5 6 7 8 Agenda Industry Company Financial Governance Acquisition Sweet Creating Key Overview Overview Overview of Avadh Snacks Value for Takeaways Snacks Shareholders 4 7 15 19 25 29 35 42 3 Favourable demographics supporting Industry growth POPULATION TREND (BILLIONS) INDIA’S ANNUAL CONSUMER EXPENDITURE (RS. TRILLION) 1.411 1.397 1.366 1.380 110 1.352 101 1.338 90 1.324 84 1.310 75 80 1.293 71 1.278 1.263 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2015 2016 2017 2018 Source: World Population Review Source: World Bank, IMF, OECD, CIA World Factbook, BCG Group GDP PER CAPITA AT CURRENT PRICES RISING AFFLUENCE AND (US$) DISPOSABLE INCOME 2,578 18% 46% 20% 11% 5% 2,379 2,014 2,036 2,104 2,199 2025 1,762 1,610 1,640 1,482 1,486 31% 45% 15% 6% 2% 2016 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Strugglers Next billion Aspirers Affluent Elite Source: World Economic Forum Report: Future of Consumption 5 Source: IBEF – May 2019 in Fast-Growth Consumer Markets – India Salty Snacks – poised for strong growth ORGANISED MARKET TO GROW AT A CAGR OF 14.3% OVER 5 YEARS 43,000 ORGANISED SNACK MARKET BY TYPE OF CATEGORIES 22,000 8,700 Others 2% 2010 2016 2021 Namkeen & Chips Traditional Source: PSL Annual Report, 2018-19 30% 36% EXTRUDED SNACKS TO POST THE HIGHEST GROWTH* Extruded 19% 18% Snacks 10% 32% Source: PSL Annual Report, 2018-19 CHIPS EXTRUDED NAMKEEN SEGMENT Source: PSL Annual Report, 2018-19 6 *CAGR FY16-FY21 Prataap Snacks at a Glance Over More than SKUs Manufacturing packets sold 5 year revenue Facilities* per day CAGR Over Reach of over Retail In Rings Super Stockists Distributors Touchpoints 8 *(5 Inhouse plants and 9 contract manufacturing units) Key Milestones Entered into 3P Contract Manufacturing Sequoia’s initial Doubled the Guwahati new plant in Karjat & investment of Rs. Installed capacity of Potato commissioned Kashipur Prakash Snacks 620 mn Chulbule Chips plant at incorporated. Prataap Snacks Introduction of plant at Indore from Conversion of company Acquired Avadh Commenced Yoodles and Prakash 6,000MT per from Private to Public Snacks Private trading Prataap Snacks Creamy Sticks Snacks in annum to Limited in Cheese Balls took over the Indore 12,000MT per Faering Capital business of annum acquired 2.9% stake Prakash Snacks 2003 2005 2007 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Successful IPO – Successfully oversubscribed 47x; launched Cup Cake listed on NSE & BSE on Commissioned Commissioned Oct 5, 2017 Concluded the Rings and Guwahati plant Set up a plant Prataap Snacks Increased the merger of Pure N Sure Namkeen plant in for Rings, to incorporated and capacity of Launch of Kurves, Nachos Indore Chulbule and manufacture set up a Potato Chulbule and in Salty Snacks and Yum- Commenced a 3P in Pellets Potato Chips in Chips plant in Rings plant at Pie in Sweet Snacks Hisar, Haryana Introduction of Indore Indore Indore Rings, Namkeen Introduction of Entered into 3P Contract and Wheels Scoops Manufacturing at Ahmedabad, Kolkata - 2 and Bengaluru-2 9 Note: As per Financial Year Comprehensive Presence Across Key Product Categories CHIPS EXTRUDED SNACKS (SHAPED) Sweet Snacks, 2% EXTRUDED SNACKS (RANDOM) NAMKEEN Potato Namkeen & Chips, 28% Pallets, 23% Percentage of Consolidated FY19 Sales PELLET SWEET SNACKS Extruded Snacks (S + R), 47% 10 Diverse Product Portfolio YUM CAKE, RINGS, KURVES PELLET NAMKEEN & POTATO CHIPS CHULBULE NAMKEEN CUP CAKE, & PUFF SNACKS FRYUMS COOKIE CAKE Potato based Rice grit & Corn grit Gram based Wheat based Cake Namkeen snack Corn grit based snack variations and Fryums SKUs: 22 SKUs: 4 based snack with catering to SKUs: 7 Market varieties flavours Chocolate local tastes flavors SKUs: 8 leader in Target Target fillings flavours Rings SKUs: 55 Target group: All group: SKUs: 4 varieties group: Youth Target SKUs: 8 Children flavour & Children group: Youth flavours Target & Children Target group: All Target group: group: Children and Children Youth Diverse product portfolio at strategic price points and pack sizes 11 Track Record of Innovation Launched Launched Nachos, and Launched Cup Cake in Kurves Yum Cake, Introduction Launched chocolate Cookie and vanilla of Seven Yum-Pie, a Cake and flavor in variety of Wonders Choco Q1FY20 sweet snacks, Vanilla range of Introduction under Rich Cake healthier of Yoodles Feast Introduction and Creamy snacks 2020 2019 Introduction of Rings, Sticks 2018 of Scoops 2017 Namkeen and Kurves 2016 Wheels 2015 • Cheese and 2014 Ring masala 2013 Namkeen • Mango variants 2012 2010/11 Namkeen • Chana Choor Chutney 2009/10 Namkeen • Garlic Sev • MRP 15/- Potato Chips • Banana Wafer Mamra pack with Potato Chips • Black Pepper Potato Chips • Tasty Punch Black Pepper • Masala Matar bigger toys • Cream & • Banana Wafer • Gatiya Onion Salted Masala Chulbule • Nimbu • Achari • Cornflake Chulbule Masala Mixture • Cream & • Mitha Falahar Onion Potato Chips Chulbule • Mast Masala¹ • Bhel • Taza Tomato • Sev Murmura Potato Chips • Yummy Masala 12 • Chatpata Pan India Presence – Source of supply closer to market Strategically located Manufacturing facilities to cater the regional demand No. of Facilities Products 1 Hissar 1 – Contract Facility Extruded Snacks, Pellets, Chulbule No. of Facilities Products Kashipur 1 - Contract Facility Chips, Namkeen, Pellet 10 1 5 Indore No. of Facilities Products Headquartered in 6 8 Chips, Extruded 1 Indore Snacks, Sweet 2 - Owned Snacks, Pellets, Namkeen 19 29 7 4 3 6 No. of Facilities Products 2 Guwahati 2 - Owned Extruded Snacks, Pellets Rajkot No. of Facilities Products 1 1 21 1 4 87 1 – Owned Pellets, Namkeen 1 1 Kolkata Ahmedabad No. of Facilities Products No. of Facilities Products 2 – Contract Facilities Chips & Nachos 7 2 - Contract Facilities Chips, Namkeen 2 Karjat No. of Facilities Products 1 2 Region No. of States / UT No. of Super Stockists 1 - Contract Facility Pellets 6 North 7 53 East 12 39 South 5 18 Bengaluru No. of Facilities Products 7 1 West 5 135 & Tumkur 1 - Contract Facility Pellets, Extruded Snacks *Includes one Union Territory, Map not to scale 13 1 – Contract Facility Chips Track Record of Robust Growth REVENUE CAGR: 21.9% EBITDA CAGR: 33.0% 11,815 869 832 10,264 8,981 7,571 565 5,591 422 343 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 PAT CAGR: 52.7% CASH PROFIT CAGR: 37.0% 442 446 823 746 274 448 460 206 255 99 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 15 Figures for Sales, EBITDA, PAT & cash profit are in Rs. millions Strong Financial Position DEBT EQUITY RATIO NET TANGIBLE ASSET 0.28 TURNOVER (X) 0.24 0.18 3.8 3.6 3.9 4.0 3.0 0.03 0.01 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Working capital CASH CONVERSION RATIO 332% 9 10 9 6 8 Average: 137.8% 53 52 48 46 48 10 Payable days 190% 16 18 3 25 158% 152% Receivable days -45 -39 -42 -38 Inventories days -53 24% Net days FY 15 FY 16 FY 17 FY 18 FY 19 FY15 FY16 FY17 FY18 FY19 Note - FY 19 is abnormal as to take price advantage on Packing Material, we made the early payment to creditors and increase level of inventory, which resulted in 16 Higher working capital cycle and lower cash conversion. Impact of Avadh Acquisition & AS 116 Rs. mn Cash PAT 4% 10% 48.8 Avadh 495.3 446.4 Acquisition – 441.8 823 746 Amortization of Goodwill FY19 FY19 FY18 FY19 FY18 24% 8.4 38% 24.43 AS 116 Impact 129.3 Avadh 103.9 96.5 Acquisition – 249 180 Amortization of Goodwill Q1 FY20 Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 17 Reported PAT Adjusted PAT Governance is an Area of Deep Focus Independent Board comprising reputed professionals and investors representative Professional management with number of years of relevant experience Robust internal controls and processes No related party transactions, except dividend and remuneration Global best practices in compliance and regulatory protocols 19 Guided by an Accomplished Board Arvind Mehta Chairman & Executive Director Over 30 years of experience in real estate business along with over 16 years in the snacks Vineet Kumar Kapila food industry and in the financing business Independent Director Ex-COO (RPC North of United Spirits) & earlier Mr. V.T. Bharadwaj Amit Kumat MD (Spencer’s Retail) Independent Director Managing Director & CEO General Partner at A91 Partners Managing Director and Chief Executive Officer Over 18 years in management consultancy Over 23 years in the snacks food industry Haresh Ram Chawla & PE investments. Previously worked with Sequoia Capital and McKinsey & Company Independent Director Apoorva Kumat Partner (India Value Fund) & earlier CEO (TV18) Executive Director (Operations) Anisha Motwani Independent Director Over 23 years of experience in the snacks food industry Partner (Storm the Norm Ventures) Chetan Kumar Mathur Earlier with General Motors India & Max Life Independent Director Insurance Company G.V. Ravishankar Ex-CFO PepsiCo India (Snacks) Non-Executive / Non-Independent 30 years of experience in F&B industry, worked Director MD (Sequoia Capital) with PepsiCo India for 23 years Over 18 years in management consultancy & PE investments. Previously worked at McKinsey & Company and Wipro Technologies PSL has high standards of Corporate Governance and sound internal control policies 20 Helmed by a Professional Management Team Mr. Arvind Mehta Over 30 years of experience in real estate business along with over 16 years in the Chairman & Executive snacks food industry and in the financing business Director s n Mr. Amit Kumat o i t Managing Director and Chief Over 23 years in the snacks food industry c n Executive Officer u f e t a r o Mr. Apoorva Kumat Over 23 years of experience in the snacks food industry p r Executive Director o C Member of Institute of Chartered Accountants of India. He has over 17 years of Mr. Sumit Sharma experience in accounting, finance, banking and taxation and worked with Crompton Chief Financial Officer Greaves, L&T and New Holland Group 21 Helmed by a Professional Management Team He holds bachelor degree in Science (Economics). He has over 27 years of Mr. Subhashis Basu experience in the FMCG industry and worked with Parle, PepsiCo India and Mother Chief Operating Officer Dairy s n o Mr. Subhash Bhatt He holds bachelor degree in Technology. He has over 23 years of experience in the i t c snacks food industry and worked with Prakash Snacks, Hello Agro and Haldiram Vice President - Production n u Foods f e t a r Mr. Deepak Brahme He holds bachelor degree in Science. He has over 23 years of experience in the o p r Vice President - Production snacks food industry and worked with Prakash Snacks, Hello Agro and Shivdeep o C Industries (Bikaji) Mr. Raj Kumar Kalra He holds bachelor degree in Arts. He has around 31 years of experience in the General Manager Sales - FMCG industry and worked with Moon Beverages, Aqua Minerals, Super Cassettes North and Paras Aqua 22 Helmed by a Professional Management Team Mr. Awadh B. Singh He holds bachelor degree in Science. He has over 31 years of experience in the General Manager Sales - FMCG industry and worked with Prakash Snacks and Hello Agro East s n Mr. Mahesh Purohit o He holds bachelor degree in Commerce. He has over 22 years of experience in the i t General Manager Sales - c FMCG industry and worked with Parke-Davis, BPL Synergy and Candico n West u f e t a Mr. D.V. Praveen Kumar He holds bachelor degree in Commerce. He has over 31 years of experience in the r o p General Manager Sales – field of beverages & food, FMCG, dairy, confectionaries, cosmetics and edible and r South o worked with PepsiCo for more than 21 years C Mr. Om Prakash Pandey Fellow Member of the Institute of Company Secretaries of India. He has over 12 Company Secretary and years of experience in corporate laws and secretarial matters and worked with NSE, Compliance Officer Great Offshore, Aavantika Gas and Universal Cables 23 Robust Controls and Protocols Sound Internal Controls Robust Practices & Protocols SAP (S4 Hana) as ERP Global best practices in Strong Management reporting and compliance and regulatory tracking system protocols No related party transactions, except dividend and Remuneration 24 About Avadh Product Portfolio Fastest growing and Namkeen Fryums fourth largest snacks player in Gujarat ~6% market share in Gujarat, one of the largest market 25.1% CAGR over the past 3 years Key Products: Bhavnagri Gathiya, Sada Key Products: Tomato Cup, Salted reffil, Mamra, Papdi Gathiya, Chavanu, Masala cup, Chiji Noodles, Salli, White Avadh Snacks delivered Lasaniya Mamra crunchy papad a robust topline Price Point: Rs. 5, 10, 30, 50 Price Point: Rs. 5, 10, performance for FY19 SKUs: 34 varieties SKUs: 21 varieties 26 Target group: Adults Target group: Children Rationale behind Avadh Acquisition Prataap Snacks acquired 80% equity stake in Avadh Snacks for Rs.148 Crore in October, 2018 with a ‘call’ option to buy remaining stake Existing Yellow Diamond product portfolio complements Avadh’s regional product portfolio of Namkeen and Fryums The acquisition enables Prataap Snacks to deepen its presence in the key market of Gujarat which is the second largest market in India for salty snacks None of the national players could make a dent in the Gujarat Market Avadh will aid in distribution synergies across Gujarat and neighboring markets Plan to launch Avadh products across India using Prataap’s robust distribution channels 27 Unique Business model & Expansion plans Expansion plans Business Model Avadh has a Unique Business model •Super Value Player offering higher Expected to be Increasing capacity of value for Money to consumers. commissioned by Rajkot facility by 50%. Oct 2019 Pan India Direct Distribution model expansion To expand Avadh’s using products in neighboring •Manufacturing facility at Rajkot Prataap’s and a well-oiled distribution markets initially existing network in Gujarat distribution •Established facility in close proximity to markets to reduce distribution costs •Direct supplies to distributors without any C&F / super stockist 28 Sweet Snacks Industry – Size, Growth, Key Players Market Share by Region Organized Sweet Snacks West is (Cakes & pies): 20% Rs.2,200-2,500 growing fast crore now N Limited Highly under vegetarian penetrated options in category Cake 15% W Market E 50% S Very few Growing at national fast pace 15% players 30 Sweet Snacks Portfolio Coming soon… Center Filled Choco Vanilla Cookie-Cake Yum Cake Tiffin Cake Layer Cake Cup Cake Cake SKU's - 3 SKU's - 2 SKU's - 1 SKU's - 1 Chunk Cake Layer of with fruit Sponge Target Target Target Target cuts cake with group - group - group - group - filling Youth and Youth and Youth and Youth and Children Children Children Children Diverse product portfolio at strategic price points and pack sizes 31 Sweet Snacks – Synergies in the Portfolio Salty Snacks Sweet Snacks Price Points Rs.5,10,20,40,80 Rs.5 Gross Margin 28-32% 33-38% Volatility in RM prices Medium – High Low Freight Cost % of Revenue 7-8% 4-5% ENHANCED ROI IN THE DISTRIBUTION NETWORK Salty Snacks Sweet Snacks MRP Value on Vehicle 16,000 - 20,000 30,000 – 35,000 Distributor margin ~7.5% 1,200 – 1,500 2,250 – 2,625 Variable Costs Same Same  Attractive gross margin profile  Lower freight costs, less volatile raw material, product diversity Key  Ability to enhance ROI in the distribution network advantages  Entry barrier as sweet snacks requires much higher expertise  Great Go to Market (GTM) synergy with our salty snacks 32 Growth Pillar 1: Continued Growth in Salty Snacks Deeper penetration in existing markets & territories Addressing regional tastes and preference Entering new to enhance markets and recall and territories repeat purchases Wider Addressing penetration of white spaces in retail touch pan-India points presence 34 Growth Pillar 2: Growth in Avadh Portfolio Improving penetration and Avadh plant capacity to touch points in Gujarat and be increased by 100% in neighboring markets • Phase I of 50% capacity expansion expected to be completed by Oct 2019 Increasing market share in Gujarat. 35 Growth Pillar 3: Synergy for Yellow Diamond & Avadh Avadh Snacks expertise in Gujarat enables Prataap Snacks to accelerate growth and deepen its presence in Gujarat, where it is keen to build a strong presence • Best selling and popular Yellow Diamond products to leverage Avadh network to cover Gujarat market Product portfolio of both companies are complementary, with a blend of regional and national flavours and variants across categories Combined offering reverberates strongly with customers as well as trade partners Avadh’s extensive range of pellet based snacks to leverage Yellow Diamond manufacturing and distribution infra and be introduced pan-India 36 Growth Pillar 4: Increase in products & Capacity for Sweet Snacks Initial product line for sweet snacks has been well accepted in present territories Sweet Snacks strategy focusing on our strengths Sweet Snacks product range to be taken across entire distribution network Recently commissioned two additional lines for Cup Cakes and Layer Cakes Cup Cakes launched in test markets have received positive feedback Launching Tiffin Cakes and Layer Cakes in H2FY20 Attractive gross margin profile Significant Lower freight costs advantages increasing Less volatile raw material Sweet Snacks Product diversity portfolio Enhanced ROI to the distribution network 37 Levers for Margin Improvement Raw material Leveraging Cost Rationalising Changing cost benefits of management trade margins product mix management scale initiatives  Raw material and  Decentralized 3P  Growth in the  Increasing  Continuous efforts on Packing material facilities enables to Prataap’s portfolio contribution from Business process re- costs > 60% of total supply directly to and expansion in high margin sweet engineering revenues distributors Sweet Snacks and snack portfolio  Decentralized Avadh will enable  Using enhanced  Constantly look to  New product manufacturing economies of scale, facilities for potato rationalize trade offerings tend to be facilities will help to rationalisation of storage reducing the margins margin accretive optimize logistic cost operational and risk of volatile prices with source of supply distribution costs closer to market  Long term contracts for palm oil and packaging laminates to mitigate uncertainties 38 Transforming into Asset Light Model 4% 6% 13% 21% 24% Mar Mar Mar Mar Sep 2015 2017 2018 2019 2019 76% 79% 87% 96% 94% • Reduced capital cost Ensuring Tight Control • Improved asset turn & efficiency • Located close to key markets Benefits • Enables faster ramp up of capacity • Tie-ups post detailed background of 3P • Reduced transportation costs checks Facilities • Faster replenishments in markets • Prataap sources the raw materials • Prataap QC teams on site • Similar margins • Prataap Snacks manages logistics • De-risking from concentrated manufacturing and logistics risk % Of total available capacity 39 Rs 5 Price Point is and will be most important  Rs.5 price point is the largest market o It consists more than 50% market share of organized snack industry o The conversion from unorganized to organized happens mostly through Rs.5 o Even Rs.2 still as a relevant price point in the hinterland  Prataap snacks is one of the largest players in this category  Target audience consist of the SEC C & D category o For SEC C/D Kids, the money in bag will remain Rs.5 for impulse purchases  Margin profile is similar to other price points o They enjoy a similar cushion against raw material volatility as other product price points 40 Key Takeaways  Packaged snacks is one of the few segments in FMCG showing strong growth tailwinds with significant potential for unorganised to organised shift  Prataap has been amongst the fastest growing players in the packaged snacks industry over the last decade  In addition to growth in core portfolio, expect growth to accelerate due to expansion in Avadh and Sweets Snacks  Margins are structurally improving due to multiple levers with reduced volatility due to broadening product portfolio  Improving asset turns with higher share of sales from outsourced facilities  Independent and professional Board and stable management team 42