jubilant foodworks ltd Management discussions

Economy Overview

The start of the third decade of this millennium has witnessed series of overlapping crises which has severely impacted the global economy over the past three years. It started with the COVID-19 pandemic. While the world was still recuperating from the aftermath of the pandemic, the Russia-Ukraine conflict led to global upheaval. Prices rose substantially, particularly on the energy and commodity markets. Supply chain bottlenecks and significantly higher energy prices contributed to rising inflation in the worlds major economies in 2022. In response to this development, many central banks tightened their monetary policies markedly over the course of the year. As a result, the global economic growth is estimated at 3.4%¹ in 2022 when compared to 6.2% in 2021.

India

After staging full recovery from the pandemic in FY22, the Indian economy grew by 7.2% in FY23. Remarkable feat achieved on the vaccination front by the Indian Government played a pivotal role as this being in addition to health response was also a buffer against economic disruptions caused by repeated waves of the pandemic. The economic expansion benefited from the growth in private consumption, exports and investments. On the supply side, services continue to be the key driver of growth for the economy. India has also faced the challenge of reining in inflation that the Ukraine conflict further accentuated. The headline inflation exceeded the upper tolerance band of RBI driven by food and energy price inflation. A series of timely measures by the Central Bank and the Government were aimed at controlling inflation. Despite the multiple and overlapping shocks to the global economy and synchronized monetary policy tightening by Central Banks across the world, the Indian economy remains resilient and is expected to be the fastest growing major economy in the world in FY24.

Sri Lanka

Sri Lankas growth potential had already fallen from 5% to 3% before the onset of the pandemic. Structural issues, especially in terms of fiscal imbalances, resulting in an acute foreign exchange shortage and staggering inflation surfaced in the aftermath of the Covid-19 pandemic. 2022 was a tough year as real GDP contracted sharply by 7.8%². The economic contraction is the biggest for the country since independence. The policy rates were hiked to rein in inflation, taxes were increased and public spending was cut to reduce the fiscal deficit.

Consequent to the monetary and fiscal corrections, that were warranted, the economic activity is now showing early signs of stabilization. Tourist arrivals are looking up and remittance inflows have picked up in 2023 and are expected to provide the growth impetus. The approval of IMF loan under the Extended Fund Facility aimed at restoring macroeconomic stability and ensuring debt sustainability will also augur well for the economy.

Bangladesh

Bangladesh economy witnessed impressive growth performances during FY21 and FY22 by growing at 6.9% and 7.2% respectively. While the economy showed strong resilience against the Covid-19 shocks, the recovery continues to face new challenges due to the ongoing Russia-Ukraine war. The heightened risk of losing export growth on one hand and surge in commodity and energy prices will continue to weigh on the growth prospect for the economy. The currency depreciation against the US dollar will further fuel inflationary concerns. The GDP growth in FY23 is expected at 6.5%³.

Industry Overview

The Global Foodservice Industry is estimated at $2.6 trillion. India is currently, the ninth largest food service market in the world estimated at $51 billion. Over the last decade, the Indian food services market(Industry) has grown at CAGR of c.9%, largely mirroring the nominal GDP growth of the country. Covid-19 emerged as a major disruptor to consumer foodservice in India, changing the industry as it was known. The structural changes in consumer behaviour led to a massive shift in the market structure, as the organized market grew more than the unorganized market and online ordering channels as envisaged grew at a much faster pace than offline channel propelling the growth in delivery channel. While on-premise consumption is returning, there is growing evidence of incremental occasions and habit-build in favour of off-premise which will sustain and endure even post-Covid. The last two years have also led to non-home food become lot more acceptable outside of special occasions, especially so in the smaller towns.

Organized chains account for ~9% of the food services market. Within organized chains, Quick Service Restaurants(QSRs) are the largest format with more than 50% share. The chained QSR industry in India has grown at a 24% revenue CAGR over FY10-20, which is c.2.7x the rate of the overall food services market in the country.

Growth Drivers

The food services industry in India is expected to grow at a CAGR of over 9% for the next few years owing to a number of secular trends. The chained QSR industry is expected to continue its faster growth trajectory. Indias chained QSR per capita consumption is also low compared to other emerging markets giving it large headroom for growth in coming decades.

Key Drivers of Growth

• Consistent rise in per capita income in consumption-led economic growth

• Demographic tailwinds

• Digital Democratization

• Growth in Online Ordering

Consistent rise in per capita income in consumption-led economic growth

Indias share of domestic consumption, measured as private final consumption expenditure, in its GDP was ~60% in FY23. India has been a consumption-led economy for multiple decades and this is unlikely to change over the next few decades. The continued strength in consumption can be attributed to a mix of socioeconomic factors. The high share of private consumption to GDP has the advantage of insulating India from volatility in the global economy. It also implies that sustainable economic growth directly translates into sustained consumer demand for goods and services. The per-capita income(at current prices) has grown at a CAGR of 9.6%. This rate of growth of per-capita income is expected to give a major boost to discretionary spending as the country crosses the $2,400 per-capita income.

Demographic tailwinds

India has the second-largest urban population in the world. The pace of Indias urbanization that is a key trend to note for its implication on Indias economic growth. As per UN estimates, around 416 million people will be added to Indias urban population between 2018 and 2050, translating to approximately 40% urbanization by 2030. This trend is expected to reflect greater purchasing power in the urban centres with stronger growth opportunity for industry.

India also has one of the youngest populations globally compared to other leading economies. The median age in India is estimated to be 28.1 years, and is expected to remain under 30 years until 2030. The younger population are likely to have a greater inclination towards branded food service players.

Illustration: A closer look at Indias digital transformation

Number of users

1.36 billion	Aadhar (biometric digital identification system)
1.25 billion	Telecom subscribers
692 million	Internet
644 million	E-commerce
493 million	Smartphones
300 million	UPI (digital payments)
268 million	Food delivery

Source: Indian Council for Research on International Economic Relations. Data as of Feb 23.

Digital Democratization

The improving broadband network penetration, device and services affordability has caused an increase in data usage across the country and enabled Indians to embrace digital applications.

Growth in Online Ordering

The share of online sales in food service industry has reached double digit in 2021.

Illustration: Sales in Consumer Foodservice by Online/ Offline Ordering: % Foodservice Value 2016-2021

% value	2016	2017	2018	2019	2020	2021
Offline	98.1	97.2	95.7	93.7	90.3	89.3
Online	1.9	2.8	4.3	6.3	9.7	10.7

Source: Euromonitor

Aided by digital democratization and huge headroom for growth for digital commerce transactors, the share of online sales is expected to increase at a faster clip further enabled by the following secular trends:

• Consumers are now accustomed to delivery across town classification helped with the ever-expanding reach of the delivery ecosystem in Tier II/III/IV

• With the option of food now being delivered at the touch of a button from the comfort of their home and at any time of the day, convenience is helping drive delivery growth and move users from occasion-based ordering to habitual ordering

Corporate Strategy

Illustration: Customers, technology, operations and organizations culture to drive sustained profitable growth

A. Customer and Market First

The first set of priorities relates to Customer and Market First. Unequivocally, this is the single biggest long term value creating pillar. The underlying objective here is to build a multi-brand and multi-cuisine food service organization. The endeavour is to serve multiple occasions, innovate on formats that drive engagement and customize menu for the local customers. This will allow Dominos to scale in India, Sri Lanka and Bangladesh where the playbook is tested, grow Popeyes, address new market opportunities in coffee through Dunkin, and capture large white spaces in the category like Chinese food, through Hongs Kitchen.

Dominos India

The Company continually evaluate all its offerings in an endeavour to always try and surpass consumer expectations of value. This is done by serving high- quality food at a affordable price, with easy ordering access and efficient service, enhanced by product innovation and technological intervention. This augurs well for the Companys established Value-for-Money credentials in the mind of consumers which in turn is driven by the triad of Product, Service and Promotion.

The Companys corporate strategy defines key focus areas, establishes the framework for decision-making and lays the foundation for the Company to maintain a consistent focus on driving sustained and profitable growth while creating long-term value for all stakeholders. It comprises of four key priorities: Customer and Market First, Data and Technology Forward, Operational Excellence, and Foundation of People and Culture. This strategic framework provides a fixed point of reference for all decisions of Company-wide significance and is being reviewed by the Management and Board of Directors yearly while factoring in the changes in the operating environment.

Product

1. Innovation across price point

The Company continually evaluate all its offerings in an endeavour to always try and surpass consumer expectations of value across price spectrum.

a. New Pizza Mania range

The unorganized proportion of Indias foodservice industry comprises of c.66% of the market. The Company introduced the Pizza Mania range for the first time in August 2008 and since then it has been a large source of category recruit from unorganized to organized segment. During the year, the Company introduced an all new Dominos Pizza Mania range comprising of four pizzas with two new sauces - Desi Makhani and Videshi(Hot and sweet). With the introduction of new range, Pizza Mania now offers a wide selection of 13 pizzas to consumers and the range starts at Rs. 49. The Company will continue to bolster its high value-for-money quotient with an intent to attract new with such unmatched value offering.

b. Dominos Viva Roma – new Gourmet pizza range

In metro cities, gourmet pizzas contribute to 8-14% of the overall pizza market. The Company addressed the whitespace in its product portfolio with the launch of Dominos Viva Roma range. The range features eight premium pizzas, topped with a mix of delectable, indulgent cheese like Bocconcini, Burrata and Parmesan, and a sauce made from the finest tomatoes of Italy. The succulent toppings sprinkled with flavourful garnishes on a crisp thin-crust base make for a great authentic Italian pizza experience. The new range is also strategically important to the brand as it is crafted to cater to the palates and taste buds of customers who desire a luxurious yet authentic Italian experience whilst adding a new taste profile to the portfolio.

2. Regionalization of menu

Over the last two and a half decade, the Company has successfully infused the globally-recognized taste of Dominos Pizza with Indian flavours in pizzas that were offered across all stores in India. This phase was marked by ensuring consistency of taste and offerings irrespective of the part of country from where the customer was relishing the delicacies.

After having achieved significant store density across regions in India, the Company started working on understanding regional flavours. The Companys chef team worked with local chefs to further enhance knowledge of local ingredients which bring out the richness and authenticity of flavours for different regions in India.

This year, the Company started with the journey of launching regional menu based innovation dedicated to the local taste preference of a particular region. First in the series was a dedicated East India range. For the first time, the team combined authentic local flavours like Kasundi, Kosha and Malai on pizza. Similar regional menu innovation in form of No Onion and No Garlic range was launched in Gujarat in West India. The Company believes that such innovations will go a long way in expanding the market for pizza which it has successfully done over so many years.

3. Building new product platform

During the year, the Company launched Paratha Pizza Range - an exciting fusion of Paratha and Pizza, crafted for discerning Indian taste buds. The range comprises of three flavours – Corn n Cheese, Paneer and Chicken Keema. The Paratha Pizza as a value offering also acts as a product platform like the established Pizza Mania, Garlic Breads etc.

Illustration: Menu Innovation and Platform Extension

	Core Menu	Sides/Beverages
FY17	• 4 Pizza Mania extremes: (Herby, Spicy, Cheesy and Loaded)	• Burger Pizza
	• Navratra Pizza combo
	• Quattro For Maggi Burst Pizza
	• Choco Pizza
FY18	• Paneer Makhani and Chicken Tikka Pizza	• Roasted Chicken Wings in Peri-Peri Seasoning and Classic Hot Sauce
		• Boneless Chicken Wings in Peri-Peri and Lemon Pepper Seasoning
		• Chicken Meatballs in Peri-Peri
		Seasoning and Sriracha Sauce)
FY19	• Introduced ‘Multigrain Crust	• Taco Mexicana
	• 5 new international flavours	• Crinkle Fries
		• Crunchy Strips
		• Potato Cheese Shots and
		• Brownie Fantasy
FY20	• 10 international flavours with ‘World Pizza League	• 3 value-added beverages (Cola Twist,
	• 6 new pizzas under the ‘All New Masala Pizzas range	Lime Twist and Jamun Twist flavours)
FY21	• Pasta Pizza Range	• New range of pastas
	• The Unthinkable Pizza(Indias first plant-based protein pizza)
FY22	• Overloaded Cheese Pizza Range	• Range of two new Stuffed Garlic
	• Overloaded Chicken Pizza Range	Breads, the Paneer Tikka Stuffed Garlic
		Bread and the Chicken Pepperoni
		Stuffed Garlic Bread
		• Lavalicious Red Velvet

FY23 • Paratha Pizza Range - an exciting fusion of Paratha and Pizza, crafted for discerning Indian taste buds

• Regional Menu Innovation: o Flavours of East: Range of six pizzas inspired from Eastern flavours o Range of four No onion and No garlic veg pizzas in Gujarat

• Dominos Viva Roma: Range of eight new gourmet pizzas

• Added four new variants in Pizza Mania range with two new sauces

Service

Strategically Expand Restaurant Network

During the year, the Company crossed an ambitious milestone by opening the 1,800^th Dominos store in India. It is a statement of trust and acceptance of Dominos as the most loved brand by customers across the country. Notably, India is the largest international market for Dominos since 2014. The Companys present assessment of the medium-term market potential in India is 3,000 stores. Accordingly, the Company has systematically strengthened its business development capabilities and as a result, has now significantly accelerated the pace of network expansion by adding 682 net stores and entering 127 new cities in the last five years.

The three key enablers in the process were:

Predictive modelling and data-driven site selection approach

• The site selection team meticulously evaluate potential catchment areas and micro-markets by analysing a range of internal – actionable insights from existing store data analysis - as well as external data sources. This helps in deriving predictive sales and return models around potential sites. Polygons and delivery radius are then carefully mapped to ensure drive times as per defined SOPs

Strong execution capabilities

• The proposed sites are then processed through a layered evaluation and approval process which ensures robust checks and helps minimize store attrition

• Through suitable interventions by cross-functional teams and efficient project management, the Company has been able to reduce the time required from store approval to eventual launch

Continuous performance monitoring

• Every new store is then evaluated against forecasted sales and the feedback from the entire process is fed back into the system for making further improvements

The Company has added 250 new stores during the year. The Company increases its reach primarily by adding new stores to serve a whitespace in the existing cities, fortressing its existing markets through store splitting and by entering new cities.

Fortressing

Whenever a mature store breaches a set threshold level of demand where the customer KPIs starts suffering, the Company deploys its fortressing strategy. The Company looks at splitting the mother store and open another store in the vicinity. The mother store and the new store in its area, the split store, together have significantly higher revenue and EBITDA, and significantly improved customer experience and delivery times. This has directly translated into a significant increase in NPS number. It helps the Company create a virtuous cycle as operating costs go down, the logistics cost and therefore the supply chain costs go down. In a nutshell, the Company through its fortressing strategy is able to serve unmet demand, generate stronger revenue growth, a stronger EBITDA growth, a stronger customer experience, and generate higher efficiencies and lower costs.

The number of split stores being opened during a year has increased significantly from 5 new split stores in FY18 to 84 new split stores in FY23. Hence, Like for Like(LFL) growth, which is the Same Store Sales Growth of non-split stores, is a more relevant comparator for the business as the Company intends to continue executing its fortressing strategy. Dominos India LFL stood at 8.9% for FY23.

	FY19	FY20	FY21	FY22	FY23
Total Store Count	1,227	1,335	1,360	1,567	1,816
SSSG	16.4%	3.2%	(17.7)%	23.0%	6.0%
LFL	16.8%	4.5%	(16.8)%	26.4%	8.9%

Format Innovation

The Company evaluate the demand potential of a given catchment and optimizes the size and layout of the store to serve consumers in the best possible manner while maintaining best in class store economics. While the dominant share of stores are regular format stores which in itself offers very superior store economics, over a period of time, we have also evolved various formats. These include mall stores, food-court stores, DELCO stores(optimized for delivery and carry out), tech park stores, airports, highways and theme park stores. Recently, the Company came up with specialized container stores to serve education campuses.

Alternate Channel – Dominos Train Ordering

The Company has tie-up with Indian Railway Catering and Tourism Corporation (IRCTC) wherein the customer can now order hot pizzas to be delivered on their seat in the train at the pre-selected station through the comfort of their Dominos App in addition to IRCTC app and website. The service is currently available in 143 railway stations.

Re-image older stores at periodic frequency

The Company periodically reimage older format stores and intend to continuously upgrade its facilities and store ambience. During the covid period, owing to operational disruptions, reimaging programs were interrupted. The Company has fast-tracked the reimaging of identified stores which and make the store experience more inviting and commensurate to the happy dining occasions.

Speed of Delivering Quality Service

The speed of delivering quality service to consumers is a key metric for the Company. All the business decisions are centered around how to further improve this key ask of all consumers. Being a quick-service restaurant player brings inherent advantages to the Company but continuous improvements are effected in all systems and processes.

During the year, the Company achieved a remarkable feat of launching 20-minute delivery across 20 zones spread over 13 cities. The announcement was culmination of years of preparation by cross functional teams to further elevate the service levels for consumers. Since inception of our delivery service, the Company has laid out clear principles to never transgress the boundary conditions ever while reducing delivery times. These boundary conditions remain inviolable and ensure that there will be no compromise with:

a. Food quality

b. Traffic rules compliance

c. Rider and pedestrian safety.

The reason why the Company is able to reduce delivery time is through:

a. Process re-engineering

b. Dominos training programs

c. Unparalleled culture of smart hustle with precision

d. Defining our delivery polygons sharply

e. Store densification

Guest-centricity

Guest-centric service culture is the most critical component of the Companys success. To continually reinforce this culture the Company has in place institutionalized training programs.

"Atithi Devo Bhava" is Companys customer service program that focuses on training the store employees on developing a customer-first attitude and service behaviour in various scenarios towards providing customer delight to all our customers.

Chart: Number of store employees trained under the

"Atithi Devo Bhava" programme

Product

Everyday Value

The Everyday Value(EDV) proposition for Dominos has helped consumers with affordable prices every day instead of a discount on selective days. During the year, the Company further democratized the EDV proposition by launching EDV 49 in select dine-in stores to further bolster value-for-money credentials for Dominos.

Targeted discounting

The Companys investments in building robust CRM tool is helping in significantly enhancing targeted discounts based on three broad vectors:

1) Discount affinity

2) Purchase propensity

3) Responsiveness to discounts

The focused discounts and promotions are helping the Company drive conversions without offering an across-the-board discount.

Dominos Sri Lanka

Against the backdrop of unprecedented economic and allied operational constraints, the Company navigated the business well and registered progress on all fronts. The system sales grew by 35.7% led by growth in dine-in and takeaway channel. Notwithstanding the on-ground challenges of fuel availability, power cuts and import restrictions, the team was driven by the zeal to serve consumers and ensured business continuity. The pace of store expansion was accelerated with the opening of 13 new stores, taking the total tally to 48 stores. Focused efforts through adequate digital ordering interventions resulted in the highest own app contribution to delivery

Dominos Bangladesh

The Company stepped up network expansion in Bangladesh and grew the network from 9 stores at end of FY22 to 17 stores by end of FY23. The system sales growth of 46.8% was on the back of Dine-in and Takeaway growth. A series of intervention on menu expansion, packaging innovation and live-streaming of pizza preparation helped enhance consumer engagement. The side menu was more than doubled to include 14 items thereby wider choices to consumers. The Company introduced ‘DBox - augmented-reality(AR) powered boxes which created lot of excitement for the brand. The Own App contribution to delivery sales was also the highest in FY23. sales in FY23.

Popeyes

During the year, the Company celebrated the successful first-year anniversary of Popeyes in India. The iconic US Fried Chicken brand - Popeyes - made its debut in India with the opening of its first restaurant in Bengaluru in January 2022, followed by rapid expansion to 12 restaurants in Bengaluru and entry into a second region with the opening of the largest Popeyes India restaurant in Chennai in a years time.

Popeyes is known for its bold and unique Louisiana style Cajun fried chicken and world famous chicken sandwiches. The use of bold Cajun spices - a proprietary blend of cayenne pepper, garlic, onion, black pepper, celery, and white pepper - and techniques developed by an in-house culinary team of chefs that makes its fried chicken a point of reference for Michelin Chefs and celebrities. The brands passion for its Louisiana heritage and flavourful authentic food has allowed Popeyes to become one of the worlds largest chicken quick service restaurants by nearly 4,100 restaurants in the U.S. and around the world.

Popeyes India has received enthralling response from Indian consumers. In last one year, nearly one million guests in Bengaluru and Chennai have tried the iconic Popeyes menu suitably adapted to cater to the diverse taste palates of Indian guests. The Companys food tech park ensures consistent quality and high fill rates to the store. This significantly improves the consistency of taste, visibly translating into higher repeat rates for the brand. The upcoming new state-of-the-art commissary in Bengaluru will further aid expansion of Popeyes restaurants.

The recent launch of specialty items unique to India such as the Hot & Messy Range, which is its signature fried chicken coated in flavourful sauces with Smoky Pepper and Sweet Chilli flavours, is aimed to continually delight Indian guests. The brand in India also offers a full range of vegetarian offerings including burgers, rice bowls, and wraps.

The early experience suggests that consumers love the strong Cajun flavours that have made Popeyes an iconic brand in the US. Popeyes has built its own in-house Delivery fleet with 100% use of E-Bikes, enabling a zero-emission Delivery experience. During the year, the Company also signed one of the major aggregators to further enhance delivery share of sales.

Dunkin

During the year, the brand unveiled a new restaurant design in India at a key moment in the brands global coffee-forward evolution post the acquisition of Dunkin by Inspire Brands in 2020. The Company transitioned to the new design in eight restaurants. The new Dunkin restaurants feature a modern caf?-like experience with comfortable in-store seating for enjoying a cup of coffee any time of day, as well as convenient takeaway, and delivery options, allowing guests to enjoy their favourite Dunkin on-the-go. 8 out of 21 Dunkin stores are now as per the brands new Coffee-first identity.

The fresh modern design is also complemented with a new menu, which brings international coffee and bakery range to India at affordable prices. All eight restaurants offer a wide range of hot and iced coffees, espresso-based beverages, donuts, frappes, muffins, and savoury baked goods, served in a convenient format and at a great value.

Hongs Kitchen

Hongs Kitchen is the Chinese QSR brand of the Company. During the year, the Company made significant intervention across workstreams to strengthen the brand for future growth. These included efforts in product innovation, improvement in existing offerings, higher reliance on central kitchen set up in Greater Noida commissary, ramping up training efforts and upgrading the consumer experience through technological intervention. All these have led to marked improvement in repeat rates, orders and record high NPS. As of March 31, 2023, there were 13 restaurants of Hongs Kitchen across three cities.

B. Data and Technology Forward

The second set of priorities relates to Data and Technology Forward. Technology and data sciences takes customer offerings to beyond immediate physical boundaries of the store. Under this we are working on four workstreams which are Elevate Consumer Experience, Next-level Platform Capabilities, Advanced Analytics and Data Science and Digitalizing Value Chain. When seen in unison, all four work-streams help us lead the industry and thrive in the era of digitalization.

It also helps the Company understand its customers and deepen the relationship through loyalty programs like Dominos Cheesy Rewards and make it easier to order a pizza on a moving train. Equally, the Company is moving forward by embedding automation in our kitchens, commissaries, and allied logistics with enterprise-grade processes. Finally, it is about building a future ready digital and technology ecosystem by combining captive capabilities, winning partnerships and thoughtful investments.

Elevate Consumer Experience

During the year, the Company has worked on focused work streams to significantly improve user pre-order, in-order and post-order experience while advancing own-app adoption. In this endeavour, the product team relooked at old onboarding journey on Dominos app and made a resolve to make onboarding even more seamless, faster and intuitive. In the new onboarding journey, the team reduced the number of steps for a new user to reach the home page from five to one. Sim number detection, OTP auto-read and background location detection were the means to achieve 1-step onboarding, but to a new customer, it is all about getting to experience their favourite brand and ordering quickly from the delectable range of menu offering.

Another significant improvement was brought in by working on location tooltip enhancement. This helped users input the desired address with high precision while reducing effort on customers part. This has also resulted in reducing instances of bad orders due to incorrect order location.

During the year, the Company introduced a new, redesigned User Experience(UX) for Dominos App by effecting Home revamp. The major objectives behind this customer-centric intervention were to collapse the ordering funnel by bringing the menu options upfront, replace existing product images with immersive and luscious food cards, reduce number of hops by enabling exploration of options by scrolling and lastly enable easier checkout through relevant options on the bottom sheet.

Dominos India app continue to be the highest rated App on both iOS and Play store thanks to series of improvements being done at the backend by the digital team to make the customer experience seamless and intuitive. The engagement levels on the digital platform were also at an elevated level. The quarterly MAU trends were very robust and app downloads continued to scale new peaks. Another key metric to track the Companys progress in its digital journey is the trend for online ordering which remains steadfast and has sustained a strong momentum.

During the year, the Company launched its loyalty program – Dominos Cheesy Rewards – and addressed a key whitespace in the brands offering. Its a very simple milestone-based construct which owns the customer a free pizza after every 6^th eligible order. All customers can earn points toward free pizza no matter how they choose to order, whether its online or offline, whether they order on our assets or via an aggregator. The redemption will however, be on Companys assets. The loyalty program is expected to become a significant driver of growth, new customer acquisition and retention for Dominos while growing customer lifetime value over time.

Chart: Cumulative Enrollment to Dominos Cheesy Rewards (Loyalty Program) in million

Next Level Platform Capabilities

The Company realizes that consumer expectations in the digital world are evolving rapidly. Accordingly, the focus remains on continuously strengthening the backend technology stack so as to have an agile, modular and scalable architecture that is well structured to help drive future growth. During the last two years, the Company has integrated multiple building blocks which will help build an intelligent, personalized, engaging food-experience platform at scale with the following measures:

• API services to enable for greater collaboration on a digital platform

• Seamless data integration with numerous platforms and services

• Data extraction in real time for order auditing and speedier order fulfillment

• Data distribution services centralized

• Multi-country, multi-currency, multi-tenant platforms that are centralized

The salient features of microservices based architecture is as under:

• Architecture Based on Requests - This method allows the platform to concentrate only on platform features and tools, rather than on how the caller service formulates requests.

• Architecture based on Events - The Company has chosen event-driven design with modularization which helps establish:

o Flexibility: The event queue serves as an indirect link between the business domain and the Companys ordering platforms, hence an event-driven design with modularization was chosen

o Fault Tolerance: Queue infrastructure provides for automatic retrying in the event of intermittent problems

o Consistency across services: Make use of the business event streams that are currently available through the services

o Scalability: An event queue allows systems to scale autonomously, accounting for uneven load patterns and providing security against rogue producers

The building blocks of the platform are as under:

• Authorization and Login Service: The Companys Authorization and Login Service is a stand-alone micro-service that allows you to generate and validate tokens, refresh tokens, and interface with web applications, mobile apps, kiosks, and bots, among other things.

• Location Services: The Companys stores are located throughout the country, and each store caters to a specific area, i.e. a polygon within that city, in order to ensure timely delivery to our customers. In an event if the clients location is not shared, the location service can solve the problem by determining the closest outlet based on the customers coordinates or the address given by the user. In the event of Takeaway or Dine-In, the Location service also offers a list of outlets closest to the customer, as well as the distance from his location, so that consumers may select the outlet of their choice.

• Customer Service: This service assists in identifying the client, as well as his stored addresses, phone numbers, and other information, so that an order may be placed using the information already in hand. In order to give a seamless order flow to the consumer, there is no need to enter the current superfluous data. This information is also utilized to advise customers about their purchase progress and delivery confirmation.

• Menu and Catalogue Service: All of the categories and subcategories of the stores available products are shown in the brand menus. Customers can swiftly browse through the goods and find what theyre looking for. To give the greatest client experience, our menu/catalog service loads quickly. Also, because the menus for various businesses in different cities might differ, all of the menus for different stores are cached on both the storefront and the aerospike in order to reduce loading times.

• Cart Service: Our cart service is an essential component of the online purchasing experience. Its what makes things go smoothly from the time a buyer finds a product they want and the time they complete their purchase. Customers may choose, reserve, and buy a product or service using it. They have complete control over adding and removing objects, exactly like they would in the real world. Customers can also use a promo code to see the final view of the things as well as the final price that must be paid for the items chosen.

• Payment Service: The Payment Service enables customers to make online payments. The Company accepts all payment methods, including UPI, Wallet, CC, DC, NB, COD, and Gift Cards. Payment service is connected with several payment gateways and selects the optimal gateway for our customers based on country, success rate, user choice, and other factors, ensuring a seamless payment procedure. In the event of non-delivery of service, the team also support rapid refunds.

• Order Service: Order service is in charge of our customers whole order journey. After all of the products in the cart have been paid for, an order is formed, which is then sent to the nearest shop for fulfillment. The software can follow all aspects of the order, including chef preparation, handing over to the rider, and rider tracking, and it can even send an SMS to the consumer for order tracking. Customers may also use the app to view their order history and reorder the same things.

Advanced Analytics and Data Science

The Analytics and Insights function helps the Company analyse data streams almost on a real-time basis and get very sharp and actionable insights. There are four teams under A&I which develop state of the art data assets, data science capabilities, dashboards and analytics tools and help decision-makers anticipate and respond faster to emerging trends.

• The data engineering team has built a real-time data platform that consolidates, standardizes and enriches data from internal operations and applications, consumer-facing assets and relevant external data that provides fresh insights and differentiation. The data platform enables leaders with real-time decision making and allied recommendations.

• The Data Science team is building scalable AI/ ML solutions that help the Company understand every customer uniquely, predict customers future actions and prescribe Next Best Action that helps in personalizing customer experience across every touchpoint. The team will also build forecasting and scenario planning capabilities that help in loss prevention, resource planning and optimization that helps provide best in class service levels to customers and optimize cost for business.

• The Business intelligence teams develop dashboards to understand the health of the business and internal functions. The team builds diagnostic and analytics tools that help scale analytics across the organization.

• The strategy and Insights team distil data to find opportunities and emerging trends. This helps the business prioritize efforts, influence strategy and translate insights into actionable recommendations. The customer science engine tracks all customer interactions (orders, browsing behaviour, CRM engagement, NPS scores and feedback etc.) and is then able to derive rich customer intelligence that helps understand what matters to the customers, how the customer engages, what are customers latent behaviours and purchase driver and what are likely future actions. The customer intelligence is then used to provide a meaningful experience to the customer on application and send personalized communications and offers. Today in Dominos app, the customer is shown a personalized menu based on the predicted preferences which greatly helps reduce order time.

Digitalizing Value Chain

The Company continually improve not only customer experience across all digital assets but is also working closely to help permeate technology and digital strength across the entire organization. During the year, a number of transformation projects across all functions were rolled out.

Auto-indenting Tool

The Company has deployed an auto-indenting tool, to forecast daily ingredient requirements at a store level and work out the optimum requirement of each ingredient to ensure maximum availability while minimizing sales loss and wastage.

Transportation Management System

The company uses Transportation Management System (TMS) to optimize the outbound logistics process, including route optimization, delivery scheduling, real-time tracking via a Digital Control Tower, reports, and dashboards on key KPIs, freight cost allocation, etc. IoT sensors are used to monitor chamber temperature, truck speed, door status, truck geolocation, and other factors that can affect the quality of the food. The Company is installing dashcams on each of the trucks, which will enable driver behaviour monitoring, provide real-time visibility into the delivery process, and generate alerts and analytics on the captured video feed. By optimizing the logistics process, the Company has reduced the time and cost of delivery while also improving the overall customer experience.

Warehouse Management System

Warehouse Management System (WMS) is deployed for managing warehouse activities supported by hand-held terminals (HHTs). HHTs guide the operators to the right location and also suggest the optimized route for picking for dispatch.

Resource Planning and Optimization

The team use a tech-based resource planning tool that takes in inputs like sales forecast and delivery schedule and projects day-wise manpower requirements, production schedules, dispatch cases, trucks and docks requirements, etc.

Resource optimization has also played a significant role in smoothening volatility in sales forecasts, levelling the manpower requirement, and production schedules at the commissaries.

The Company uses face biometric-based access control to capture accurate area-wise productivity at commissaries, digital energy meters and Energy Management System (EMS) for energy driving efficiency, and advanced cameras for reading vehicle number plates to monitor the truck movement.

Embedding Digital Experience in Physical Stores to improve Customer Experience

While there are many big wins achieved by the Company on the digital front, there is a deep recognition of investments required to constantly improve all digital offerings and integrate digital assets even in offline channels.

C. Operational Excellence

The third priority is to continue driving operational excellence. The Company places inordinate focus on continuous improvement when it comes to executing with excellence. From procurement to food tech park operations to managing the logistics to kitchen operations to last mile operations, across brands and countries, the Company is developing a unique way of execution – ‘The JFL Way. Notably, with the Companys vast expanse of operations, the continuous endeavour is to manage complexity at lower cost, generate leverage while bringing in improvements in the backward integrated sourcing supply chain with state-of-the-art commissaries. One critical outcome of this priority will be marked improvement across cost lines and productivity.

Integrated Supply Chain

The Company has built a robust integrated supply chain which oversees four broad functions:

1. Sourcing and Supplier Management

The Company places considerable emphasis on ensuring that it procures high-quality raw materials, fresh ingredients, packaging material, engineering products, capital goods and equipment, enabling it to provide quality products and experience to its customers. Also, the centralized procurement through commissaries allows the Company to maximize leverage and negotiate better prices with suppliers.

JFL Supplier Code of Conduct: The Company carefully selects suppliers based on fulfillment of specifications, quality, price, availability, and the suppliers understanding of and adherence to the JFL Supplier Code of Conduct(SCoC). The SCoC conveys its expectations from all our Suppliers with regards to compliance with laws, ethical business practices and fair treatment of people and surroundings. The Company also implements a strict supplier qualification process that includes supplier compliance checks and on-site audits and quality assurance to ensure the supplier continuously meets the food safety and quality control standards.

Eat Right, Nutrition and Choice: The Company believes in the importance of transparency and acting responsibly. Our dedicated team ensures that the fresh and delicious pizzas that we serve you, are prepared with great care. The Company publicly shares the nutritional parameters of all its food offerings across brands. Dominos uses fresh centrally produced dough using the standard global Dominos recipe. The pizza dough is also differentiated with added nutrients like iron, folic acid and vitamin B12. Moreover, the thin crust base is made of 100% wheat flour. The Company uses only 100% real mozzarella cheese prepared from pure milk.

Responsible Sourcing: The Company serves only antibiotic free chicken across all its brands and also pioneered 100% adherence to the phase-wise planned implementation of policy on the usage of antibiotics in poultry birds health management. The phase-wise implementation was as under:

• Phase 1: Antibiotics not to be used as Growth Promoters and group level Disease Prophylaxis; only permitted antibiotics to be used for disease treatment.

• Phase 2: Move further to eliminate the usage of Highest Priority Critically Important Antimicrobials ("HPCIA") as defined by WHO, and continuously improve the vaccination programme to prevent disease.

• Phase 3: Limiting the usage of CIA to the second line of treatment, working continuously to reduce/ eliminate the usage of antibiotics for disease management and digitally integrating farm-level data to enable surveillance and data analytics – toward continuous improvement in the bird health care programme.

The Company has a panel of veterinarians to oversee the implementation of antibiotics policy and maintain the quality of raw chicken.

The Company also ensures 100% traceability for Chilli Flakes and Chicken.

The Company is continuously striving to procure the majority of its raw materials from sustainable sources. The Company has been procuring palm oil from RSPO certified sources and is a member of I-SPOC (Sustainable Palm Oil Coalition of India), as a committed stakeholder in the palm oil supply chain in India.

During the year, the Company witnessed significant increase in price of several of its key ingredients. The ongoing efforts to mitigate price risk through forward buying, strong partnerships with key suppliers, careful planning has helped us offset the pricing pressure to some extent.

Food Safety and Quality Control

High hygiene standards, food that is uncompromised on quality and taste, and consumer safety are the Companys top priorities. The Company has developed sustainable systems and processes for ensuring the highest standards of food safety and hygiene. It also adheres to all the applicable rules and regulations regarding the manufacture, storage, distribution of products and labelling information – under Food Safety and Standards – for all its food products, including legal metrology.

The Company works with its partners and employees to ensure that there is no compromise on the taste, quality and safety of the products its consumers have come to love over the years.

2. Commissaries and Distribution Centres

The Company has eight commissaries and four distribution centres across India. These commissaries primarily manufacture food intermediaries, house central kitchen and act as fulfilment centres/warehouses for majority of the ingredients. This also helps in ensuring consistent quality, adherence to strict food safety protocols and timely delivery of raw materials to stores.

The primary raw materials used in the preparation of our pizzas, such as cheese, flour, vegetables and chicken, are sourced, processed in the commissaries.

Dominos uses fresh centrally produced dough using the standard global Dominos recipe manufactured in the dough facility. During the year, in the Greater Noida commissary, the Company commissioned a dedicated dough lab to test and continuously monitor inputs from different varieties. Basis the test results, suitable modifications are made in quantity of other inputs to ensure consistency of taste and adherence to quality.

Similarly, the Company has dedicated facilities for desserts meant for Dominos, donuts for Dunkin and recently introduced central kitchen. Central kitchen is an example of backward integration where the Company is able to quickly standardize the menu, deliver consistent quality through enhanced supervision and usage of equipment with high level of automation and precision while being cost efficient. Hongs Kitchen operations registered remarkable progress with further enhancement in taste, improvement in repeat rates, increase in orders and record high NPS with the introduction of central kitchen. It is also leading to simplification of in-store kitchen processes while reducing food wastage.

To support the Companys store expansion plans, commensurate investments are being planned for new commissaries and capacity expansion in existing ones. The new state-of-the-art commissary in Bengaluru is expected to be commissioned by August 2023. This facility will be one of the largest for the Company and is being built with an estimated CAPEX of Rs. 2,700 mn. The multi-brand facility would be able to serve over 750 stores.

3. Research and Development

The Company has an internal product development team (comprising a team of chefs, food technology expert and a kitchen in-charge) which interacts constantly with consumers, the marketing team and the market research teams to get their feedback on our food products and new product ideas. The Company also have a dedicated internal product development kitchen located at commissary in Greater Noida and in our Head Office in Noida. It also relies on franchisors expertise along with close collaboration among other franchisees for new product development ideas as well as food technology. The internal product

development team works independently and also in close collaboration with the vendors to develop the ingredients for our food products to meet ongoing requirements for menu innovation.

During the year, the Company pivoted from ingredient innovation to establishing a full-fledged R&D function for new product development and new categories. The famous Brioche bun in Popeyes India is developed in-house with recipes validated by RBI team. In Dominos, the R&D team ensured that the menu is 100% free from usage of artificial preservatives, colours and flavour under the Baking Goodness initiative of the brand. The team also continuously strive to reduce fat and salt content in all its products while maintaining the same loved taste.

4. Logistics

The Companys store operations are dependent on frequent and consistent deliveries of raw material, intermediaries and finished food items as per the specifications and hence maintaining consistent high fill-rate is very important. Dominos has an industry leading fill-rate of over 99.5%. This is achieved through rigorous materials and resource planning in advance, load levelling, infallible engagement with suppliers and building optimized inventory levels while managing cost efficiency.

The Company has a dedicated cold-chain fleet that helps in ensuring timely delivery of raw materials to stores. These trucks are refrigerated to ensure that the ingredients are supplied in a temperature-controlled environment, which is monitored during transit to ensure quality and minimize wastage.

Sustainable Mobility: The Company has started to introduce electric bikes in its fleet starting FY19 with an intent to reduce its carbon footprint.

Chart: Electric Vehicles in the Companys delivery fleet

(i) Engaged and inclusive front-line teams

(ii) Be the employer of choice

(iii) Be guided by a unique JFL culture embedded with values that last beyond us

Culture and allied HR strategy

Smart hustle, guest-centric, collaborative, flexible and tech-driven are the five basic tenets which define the Companys culture. Accordingly, the objectives of the Companys Human Resources strategy have been defined with a view to attracting talent, optimizing their deployment and providing them with opportunities to develop their potential, thereby ensuring that all their skills and expertise are available to meet the current and future needs of the Company. The success of this approach is borne out by the results of employee engagement and satisfaction surveys, conducted every year.

During the year, the Company was also regarded as Great Place to Work as a reflection of high trust, high performance culture, another marker of being an employer of choice.

The number of people employed as on March 31, 2023 were 32,752.

Engaged and inclusive front-line teams

The emphasis is to build a culture of continuous learning and capability development to cater to the organization-wide requirement across three key pillars:

1. Deeper capability for functional and role-based skills

To enable an equal emphasis on learning role-based skills, the team worked with senior management and function heads to design customized digital learning journeys on top 3 themes for each department and select sub-functions. These customized digital learning journey was launched through Percipio – in partnership with Skillsoft - with learning content across 3,500+ topics to enable learning on-demand for employees.

2. Frontline capability development

Enabling our frontline and operations leaders to develop their capability and skillset to better serve guests and also progress to higher roles within the organization.

LEAP 2.0 Program: During the year, the Company completed all modules of LEAP 2.0 – JFLs organization-wide operation capability development program. LEAP 2.0 was designed to enable the operations team to enhance their capabilities and skillsets while transforming themselves with the evolving organizational context. Participants were taken through a dedicated 5-6 month-long journey encompassing individual development, needs identification, specific personalized feedback and a detailed learning journey. The targeted intervention intended to not only improve the knowledge of participants but also bring about targeted behavioural change. The learning journey themes laid emphasis on leading self and team, enabling an ecosystem for customer delight and execution of business strategies.

This structured investment in our frontline operations teams has helped enable the required shits in leadership behaviours/ways of working to power positive business outcomes. We are also enabling required talent movements within and out or operations teams, role expansions, and assigning special projects as per business requirements while matching talent aspirations. The program covered over 1,300 participants.

While the program has concluded the learning will continue through reinforcement sessions, applying learning from the workshop to the workplace and blending real time scenarios and situations with leadership and behavioural concepts to make the real impact on the ground.

The Company has a strong operational talent pool across its stores. Through a concerted effort of capability development across roles and through continuous engagement, the Company is able to spot and groom talent from stores. Riders who intend to build a longer career get groomed by the operations team. They are brought inside the stores, get trained on store processes, on the make line, and eventually, they grow to become shift managers and store managers and further on.

3. Building leaders for tomorrow

The Company continually invests in enhancing capabilities with the objective of building exceptional people leaders who can build high-performing teams. This is being achieved through group and individual coaching for leaders, organizing focused workshops and offering advanced management program opportunities to an identified cohort of employees.

Diversity and Inclusion

The Company firmly believes that focusing on diversity, equity and inclusion isnt just the right thing to do, it is critical for long-term sustainable success. All the stakeholders benefit when the Company amplify diversity, create a platform to celebrate uniqueness and create an environment where everyone can contribute, thrive and prosper. It brings diversity of thought, greater innovation, better understanding of customer mind-sets, better employee engagement and sets the Company on a path to excellence.

During the year, the Company took concerted efforts to build a more diverse workforce and nurture an equitable and inclusive culture. The Company is committed to create an ecosystem - that attracts and grows talent from all genders, backgrounds and generations.

In the first phase, the focus will be on increasing gender diversity while nurturing and developing talent throughout the organization. The Company now has 57 all-women stores and 166 women-led stores of Dominos in India as of March 31, 2023.

Financial Review

For the financial year 2022-23, Revenue from Operations of Rs. 50,960 million increased 17.7% versus the prior year. In Dominos, the Delivery and Dine-in channel registered 8.4% and 35.6% growth, respectively. The LFL and SSG growth came in at 8.9% and 6.0% respectively. EBITDA came in at Rs. 11,592 million, and EBITDA margin was 22.7%. The Operating Profit came in at Rs. 6,839 million, and Operating Profit margin was 13.4%. Profit after tax(bei*) came in at Rs. 4,029 million and PAT margin(bei*) was 7.9%. The Board of Directors of the Company has recommended a dividend of Rs. 1.2 per equity share of face value of Rs. 2 each for the financial year ended March 31, 2023(amounting to Rs. 792 million), subject to approval of shareholders at the Annual General Meeting.

Please refer to Note 52 on Page 223 for detailed explanation on financial ratio and reason for change. The interest coverage ratio is not applicable as the Company doesnt have any Debt in its standalone financial statements.

*bei: before exceptional items

Risk Management

Risk Management Framework

Effective risk management is integral to JFL operations and is embedded in its day-to-day business transactions and activities. The framework in place seeks to identify, prioritize, mitigate, monitor and appropriately report any significant threat to the organisations strategic objectives, its reputation, operational continuity, environment, compliance, and the health and safety of its employees.

A Disciplined Approach to Managing Risks

The approach is based on assessment of several factors and associated risks through proper analysis and understanding before undertaking any business activities and implementing changes to processes and systems.

S. No. Principle Risk	Risk Description	Potential Impact	Allied Opportunities	Key Mitigation Actions
1 Cyber Security	• Cyber security threats have emerged as an important risk to consider across industries as organisations are moving to newer touchpoints such as social, mobile computing and cloud computing	• Leakage of company or consumer or employee information	• Increased availability of ordering platforms	• Robust information systems and processes to protect business information, including personal information of customers, employees and business partners, while it is collected, processed, consumed and stored in various internal and external systems
	• Hacking, ransomware, social engineering and other cyber-attacks are some of the ever- present threats to data security and system availability	• Business disruption	• Increased consumer confidence	• As mandated by RBI Guidelines on Regulation of Payment Aggregators and Payment Gateways, the company does not store any Customer Card details like Card Number, CVV Number, Card Expiry Date etc. on systems
		• Financial losses		• Alignment with well-known Cyber Security practices and frameworks including NIST and ISO 27001. Migration to the latest ISMS Standard ISO
		• Reputational damage		27001:2022 to keep up to date with global standards for information security. Companys PCI-DSS v3.2.1 is certified and renewed as per annual process with Certifications attested by the Payment Card Industry accredited Auditors, in-line with Industry Standards.
				• Regular assessment of existing framework against the Global Cyber Security Maturity Index to constantly improve companys cyber security posture and strengthen the digital assets of the Organisation
				• Constant improvement of cyber security processes and technologies, raising employee awareness and embedding security in day-to-day functions
				• Agile, prompt and scalable cyber security team which monitors digital infrastructure and business information 24x7 to respond to cyber threats. Working with the Industry Cyber Security Consulting Partners, OEMs and Leading Cyber-security technologies available.
				• Recovery drills to ensure preparedness and speedy recovery in case of any disaster
2 Food Quality	Inability to meet prescribed food-health and quality standards / perceived or actual adulteration or contamination due to:	• Adverse actions by regulators resulting in financial losses	• Increased customer satisfaction resulting in increased demand	• Define and implement Quality process, standards, parameters along with product specifications in compliance with FSSAI norms
	• Absence of defined quality standards and guidelines in line with FSSAI requirements	• Loss of confidence among consumers		• Regular training and awareness sessions for restaurants and commissary staff on adherence to quality norms
	• Lack of employee awareness around quality standards to be followed	• Reputational damage		• Periodic testing (in house / COA / third party) of critical parameters for all materials as per defined sampling methodology
	• Absence of monitoring mechanism for reviewing food safety compliance and implementing required corrections			• Periodic quality audits at supply chain centres, distribution centres, restaurants and business partner premises
				• Review of customer complaints on food quality, defining Corrective and Preventive Actions (CAPA) on basis of root cause analysis and ensuring implementation
3 Business Disruption	Business disruption during any crisis situation	• Adverse impact on company operations	• Improved preparedness for disruptive events thereby minimizing business impact and losses	• Creation of a comprehensive Disaster Recovery (DR) and Business Continuity Plan (BCP) on basis of Business Impact Analysis (BIA)
		• Financial losses		• Periodic training and communication to employees (including testing exercises through mock drills) for increasing awareness
4 Employee Safety	Risk of employee/ business partner safety (injuries / loss of life) arising from	• Adverse impact on employee productivity	• Reduced downtime and lower employee absence resulting in increased productivity	• Identification of potential hazards at workplace (restaurants / commissaries / other offices) and ensuring adequate safety measures are in place
	• Lack of clarity on Hazards involved at workplace and safety measures to be followed	• Legal repercussions		• Periodic training and communication to employees (including safety mock drills) for increasing awareness
	• Non-review of safety compliance for implementing required corrections	• Reputational damage		• Safety review process to ensure compliance with safety measures by employees
	• Absence of an incident management process			• Reporting and review of safety incidents and near miss cases at all company locations for corrective and preventive action
	• Lack of timely reinforcements			• Maintaining and periodically updating first response plan and details of nearby medical facilities at each commissaries / Restaurant / other company locations for emergency cases
	• Lack of support for medical treatment			• Group Mediclaim Insurance policy covering all employees
5 Absence of an effective ESG	Absence of an effective ESG mechanism due to:	• Adverse action by regulators	• Reduction in ecological damage	a) ESG mechanism:
Mechanism	• Lack of clarity / visibility on material focus areas, targets and actual status	• Reputational damage	• Creation of a responsible brand image attracting environmental conscious customers	• Create and implement Sustainability policy
		• Adverse impact on current and potential investor relationships		• Review of business processes to identify material focus areas and to establish objectives and targets
				• Periodic tracking and review of actual achievement against targets
				• Define reporting format, content and matter in line with statutory requirements and industry best practices
				b) Waste Management:
			• Cost reduction opportunities through waste minimization and efficient use of resources	• Tie-up with certified vendor for waste pick-up and disposal
				• Streamline the process for waste disposal / recycle / reuse in phased manner ensuring compliance with statutory requirements and sustainable practice
				• Periodic review to identify waste recycle / reuse / reduction opportunities, defining action plan and ensuring implementation
				c) Human Rights:
			• Increased investor confidence	• Create and implement a Policy specifying the human right standards and principles supported by the organization.
				• Ensure that these Human Right principles are applicable on vendors through a Supplier Code of Conduct
				• Establish formal channels for reporting of concerns by employees (POSH, Whistle Blower etc.)
				• Carry out frequent employee communication around Human Rights policy and channels available for reporting concerns
				d) Environment:
				• Create and implement Environment Policy specifying companys commitment and initiatives undertaken towards reducing:
				• Carbon footprint
				• Water wastage
				• Impact of companys operations on environment
				• Ensure Energy Management System (‘EMS) is installed at commissaries and restaurants for real time remote monitoring of Electricity consumption and providing actionable information for optimizing energy usage
6 Inflation and Ineffective Cost Management	Increasing cost due to inflation / ineffective cost management on account of:	• Adverse impact on profitability	• Minimized costs and increased profitability	• Collect primary and secondary data and use analytical base for fact based price negotiations and for increasing forecast accuracy to time the purchase
	• Lack of a matured data collection and analytics system	• Unavoidable price increases due to market dynamics and inflation		• Identify opportunities for procurement led savings through:
		• Non-review of cost to identify opportunities for optimization		• Upstream sourcing of the commodities
				• Cost plus contracting for high spend items
				• In-house production vs. external procurement through cost benefit analysis
				• Value engineering - optimizing existing material specifications or using alternate materials / ingredients
				• Develop new vendors for increasing competition
				• Identify opportunities to drive productivity and reduce cost (including manpower cost, Restaurant operating cost, digital and IT cost etc.) through:
				• Process re-engineering
				• Usage of data and technology
				• Review of cost trends and variances
				• Carry out other specific initiatives to review and optimize individual cost items across the company
7 Non- performance of New Businesses / inappropriate capital allocation	Non-performance of new businesses in India or International markets / inappropriate capital allocation due to:	• Financial losses	• Increase in return on capital employed	• Having a well-defined capital allocation and strategic framework, Board governance and strategic fitment testing before making any Investment
	• Political disruptions / volatile economic conditions adversely affecting investments including international expansions in respective countries	• Lower return on capital employed	• Increased investor confidence	• Before investing in a foreign country - examine the credit ratings, GDP, inflation, consumer price index, structure of the countrys financial markets, availability of attractive investment alternatives, recent performance of local stock and bond markets etc.

Internal Controls and their Adequacy

The Companys current systems of Internal Financial Controls (IFC) are aligned with the requirement of Section 134(5)(e) of the Companies Act, 2013 (Act). As stipulated under the said provisions, the IFC framework established by the Company encompasses the following elements:

• Orderly and efficient conduct of business

• Safeguarding of its assets

• Adherence to Companys policies

• Prevention and detection of frauds and errors

• Accuracy and completeness of the accounting records and timely preparation of reliable financial information

The Companys internal controls are commensurate with its size and the nature of its operations. They have been designed to provide reasonable assurance with regard to all the above stated IFC elements. To make the IFC framework robust, the Company worked on three lines of defence strategy:

First Line of Defence: Build internal controls into operating processes, which primarily include controls operated by the process owners under the overarching guidance of the Code of Conduct, Whistle-blower mechanism, budgetary controls, financial delegation of authority, accounting policies and manuals, period-end closing checklist, basis of accounting estimates and various other Company policies and procedures. For better governance, these operational controls have been implemented through robust digital, Enterprise Resource Planning (ERP) and other IT systems.

Second Line of Defence: Create an efficient review mechanism, comprising monthly business performance reviews under which each business unit and function is reviewed on its performance. Additionally, a robust Control Self-assessment (CSA) process enables process owners to perform self-assessment against the Risk and Control Matrices (RCMs). The

CSA process enables the Company to monitor the adequacy and effectiveness of the internal control environment.

Third Line of Defence: Independent assurance through internal audits performed by audit firms of international and national repute. The internal audit scope covers the entire gamut of the Companys operations based on a rolling audit plan approved by the Audit Committee. The Audit Committee reviews reports submitted by the internal auditors and suggestions for improvement are considered. Additionally, the statutory auditors audited Companys financial statements included in this Integrated Report and have also confirmed the adequacy and operational effectiveness of the Companys internal control over financial reporting (as defined in Section 143 of the Act).

Outlook

In the near term, the impact of inflation will continue to weigh on demand environment. However, in the medium-term, the Company believes that the food service category is entering an exciting period of sustained growth and market making. Secular trends of young population, rising urbanization, growing affluence, accelerated shifts towards digitalization and shift in favour of the organized sector, and within that for big, established, credible brands will help aid growth of Foodservice industry. The Company through its Portfolio of Brands and strengthened enablers is well placed to leverage the opportunity and deliver sustained profitable growth.

Cautionary Statement

Certain statements in the ‘Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations 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 influence the Companys operations include economic developments within the Country, demand and supply conditions in the industry, input prices, changes in Government regulations, tax laws and other factors, such as litigation and industrial relations.