kriti industries india ltd Management discussions

Global economy

Overview: The global economic growth was estimated at a slower 3.2 per cent in 2022, compared to 6 per cent in 2021 (which was on a smaller base of 2020 on account of the pandemic effect). The relatively slow global growth of 2022 was marked by the Russian invasion of Ukraine, unprecedented inflation, pandemic-induced slowdown in China, higher interest rates, global liquidity squeeze and quantitative tightening by the US Federal Reserve.

The challenges of 2022 translated into moderated spending, disrupted trade and increased energy costs. Global inflation was 8.7 per cent in 2022, among the highest in decades. US consumer prices decreased about 6.5 per cent in 2022, the highest in four decades. The Federal Reserve raised its benchmark interest rate to its highest in 15 years. The result is that the world ended in 2022 concerned that the following year would be slower.

The global equities, bonds, and crypto assets reported an aggregated value drawdown of USD26 trillion from peak, equivalent to 26 per cent of the global gross domestic product (GDP).

In 2022, there was a concurrently unique decline in bond and equity markets; 2022 was the only year when the S&P 500 and 10-year US treasuries delivered negative returns of more than 10 per cent.

Gross FDI inflows – equity, reinvested earnings and other capital – declined 8.4 per cent to $55.3 Billion in April-December. The decline was even sharper in the case of FDI inflows as equity: these fell 15 per cent to $36.75 Billion between April and December 2022. Global trade expanded by 2.7 per cent in 2022 (expected to slow to 1.7 per cent in 2023).

The S&P GSCI TR(Global benchmark for commodity performance) fell from a peak of 4,319.55 in June 2022 to 3495.76 in December 2022. There was a decline in crude oil, natural gas, coal, lithium, lumber, cobalt, nickel and urea realisations. Brent crude oil dropped from a peak of around USD 120 per barrel in June 2022 to USD 80 per barrel at the end of the calendar year following the enhanced availability of low-cost Russian oil.

Regional growth (per cent)	2022	2021
World output	3.2	6.1
Advanced economies	2.5	5
Emerging and developing economies	3.8	6.3

Performance of major economies

United States	China	United Kingdom	Japan	Germany
Reported GDP	GDP growth was	GDP grew by 4.1	GDP grew 1.7	GDP grew
growth of 2.1 per	3 per cent in	per cent in 2022	per cent in 2022	1.8 per cent
cent compared	2022 compared	compared to 7.6	compared to 1.6	compared to 2.6
to 5.9 per cent in 2021	to 8.1 per cent in 2021	per cent in 2021	per cent in 2021	per cent in 2021

Outlook

The global economy is expected to grow 2.8 per cent in 2023, influenced by the ongoing Russia-Ukraine conflict. Concurrently, global inflation is projected to fall marginally to 7 per cent. Despite these challenges, there are positive elements within the global economic landscape. The largest economies like China, the US, the European Union, India, Japan, the UK, and South Korea are not in a recession. Approximately 70 per cent of the global economy demonstrates resilience, with no major financial distress observed in large emerging economies. The energy shock in Europe did not result in a recession, and significant developments, including Chinas progressive departure from its strict zero-Covid policy and the resolution of the European energy crisis, fostered optimism for an improved global trade performance.

Despite high inflation,the US economy demonstrated robust consumer demand in 2022. Driven by these positive factors, global inflation is likely to be still relatively high at 4.9 per cent in 2024. Interestingly, even as the global economy is projected to grow less than 3 per cent for the next five years, India and China are projected to account for half the global growth (Source: IMF).

Indian economy

Overview: Even as the global conflict remained geographically distant from India, ripples comprised increased oil import bills, inflation, cautious government and a sluggish equity market.

Indias economic growth is estimated at 7.2 per cent in FY 2022-23. India emerged as the second fastest-growing G20 economy in FY 2022-23. India overtook UK to become the fifth-largest global economy. India surpassed China to become the worlds most populous nation (Source: IMF, World Bank)

Growth of the Indian economy

	FY 20	FY 21	FY 22	FY23
Real GDP growth (per cent)	3.7	-6.6 per cent	8.7	7.2

Growth of the Indian economy quarter by quarter, FY 2022-23

	Q1FY23	Q2FY23	Q3FY23	Q4FY23
Real GDP	13.1	6.3	4.4	6.1
growth (per cent)

(Source: Budget FY24; Economy Projections, RBI projections)

According to the India Meteorological Department, the year 2022 delivered 8 per cent higher rainfall over the long-period average. Due to unseasonal rains, Indias wheat harvest was expected to fall to around 102 Million metric tons (MMT) in FY 2022-23 from 107 MMT in the preceding year. Rice production at 132 Million metric tons (MMT) was almost at par with the previous year. Pulses acreage grew to 31 Million hectares from 28 Million hectares. Due to a renewed focus, oilseeds area increased 7.31 per cent from 102.36 Lakh hectares in FY 2021-22 to 109.84 Lakh hectares in FY 2022-23. Indias auto industry grew 21 per cent in FY 2022-23; passenger vehicle (UVs, cars and vans) retail sales touched a record 3.9 Million units in FY 2022-23, crossing 3.2 Million units in FY19. The commercial vehicles segment grew 33 per cent. Two-wheeler sales fell to a seven-year low; the three-wheeler category grew 84 per cent. Till the end of Q3 FY 2022-23, total gross non-performing assets(NPAs) of the banking system fell to 4.5 per cent from 6.5 per cent a year ago. Gross NPA for FY 2022-23 was expected to be 4.2 per cent and a further drop is predicted to 3.8 per cent in FY2023-24.

As Indias domestic demand remained steady amidst a global slowdown, import growth in FY 2022-23 was estimated at 16.5 per cent to $714 Billion as against $613 Billion in FY22. Indias merchandise exports were up 6 per cent to $447 Billion in FY 2022-23. Indias total exports (merchandise and services) in FY 2022-23 grew 14 per cent to a record of $775 Billion in FY 2022-23and is expected to touch $900 Billion in FY24. Till Q3 FY 2022-23, Indias current account deficit, a crucial indicator of the countrys balance of payments position, decreased to $18.2 Billion, or 2.2 per cent of GDP. Indias fiscal deficit was estimated in nominal terms at ~ Rs.17.55 Lakh Cr and 6.4 per cent of GDP for the year ending March 31, 2023. (Source: Ministry of Trade & Commerce) Indias headline foreign direct investment (FDI) numbers rose from US$74.01 Billion in 2021 to a record $84.8 Billion in FY 2021-22, a 14 per cent Y-o-Y increase, till Q3 FY 2022-23. India recorded a robust $36.75 Billion of FDI. In FY 2022-23, the government was estimated to have addressed 77 per cent of its disinvestment target (H50,000 Cr against a target of H65,000 Cr).

Indias foreign exchange reserves, which had witnessed three consecutive years of growth, experienced a decline of approximately $70 Billion in 2022, primarily influenced by rising inflation and interest rates. Starting from $606.47 Billion on April 1, 2022, reserves decreased to $578.44 Billion by March 31, 2023. The Indian currency also weakened during this period, with the exchange rate weakening from Rs.75.91 to a US dollar to Rs.82.34 by March 31, 2023, driven by a stronger dollar and increasing current account deficit. Despite these factors, India continued to attract investable capital. The countrys retail inflation, measured by the consumer price index (CPI), eased to 5.66 per cent in March 2023. Inflation data on the Wholesale Price Index, WPI(calculates the overall price of goods before retail) eased to 1.3 per cent during the period. In 2022, CPI hit its highest of 7.79 per cent in April; WPI reached its highest of 15.88 per cent in May 2022. By the close of the year under review, inflation had begun trending down and in April 2023 declined below 5 per cent, its lowest in months. Indias total industrial output for FY 2022-23, as measured by the Index of Industrial Production or IIP, grew 5.1 per cent year-on-year as against a growth of 11.4 per cent in FY 2021-22.

India moved up in the Ease of Doing Business (EoDB) rankings from 100th in 2017 to 63rd in 2022. As of March 2023, Indias unemployment rate was 7.8 per cent.

In FY 2022-23, total receipts (other than borrowings) were estimated at 6.5 per cent higher than the Budget estimates. Tax-GDP ratio was estimated to have improved by 11.1 per cent Y-o-Y in RE 2022-23. The total gross collection for FY 2022-23 was Rs.18.10 Lakh Cr, an average of Rs.1.51 Lakh a month and up 22 per cent from

FY22, Indias monthly goods and services tax (GST) collections hit the second highest ever in March 2023 to Rs.1.6 Lakh Cr. For 2022–23, the government collected Rs.16.61 Lakh Cr in direct taxes, according to data from the Finance Ministry. This amount was 17.6 per cent more than what was collected in the previous fiscal. Per capita income almost doubled in nine years to Rs.172,000 during the year under review, a rise of 15.8 per cent over the previous year. Indias GDP per capita was 2,320 USD (March 2023), close to the magic figure of $2500 when consumption spikes across countries. Despite headline inflation, private consumption in India witnessed continued momentum and was estimated to have grown 7.3 per cent in FY 2022-23.

Outlook: India is expected to grow around 6-6.5 per cent (as per various sources) in FY2024, catalysed in no small measure by the governments 35 per cent capital expenditure growth by the government. The growth could also be driven by broad-based credit expansion, better capacity utilisation and improving trade deficit. Headline and core inflation could trend down. The global landscape favours India: Europe is moving towards a probable recession, the US economy is slowing, Chinas GDP growth forecast of 4.4 per cent is less than Indias GDP estimate of 6.8 per cent and America and Europe are

Union Budget FY 2023-24 provisions

The Budget 2022-23 sought to lay the foundation for the future of the Indian economy by raising capital investment outlay by 33 per cent to Rs.10 Lakh crores, equivalent to 3.3 per cent of GDP and almost three times the 2019-20 outlay, through various projects like PM Gatishakti, Inclusive Development, Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition and Climate Action, as well as Financing of Investments. An outlay of Rs.5.94 Lakh Cr was made to the Ministry of Defence (13.18 per cent of the total Budget outlay). An announcement of nearly H20,000 crores was made for the PM Gati Shakti National Master Plan to catalyse the infrastructure sector. An outlay of Rs.1.97 Lakh Cr was announced for Production Linked Incentive schemes across 13 sectors. The Indian government intends to accelerate road construction in FY24 by 16-21 per cent to 12,000-12,500 km. The overall road construction project pipeline remains robust at 55,000 km across various execution stages. These realities indicate that a structural shift is underway that could strengthen Indias positioning as a long-term provider of manufactured products and its emergence as a credible global supplier of goods and services

Indian PVC market review

The polyvinyl chloride (PVC) demand in India stood at 2,888 KTPA in 2022 and is expected to reach 6,779 KTPA by 2031, growing at a CAGR of 6.81 per cent between 2022 and 2031.

Growing agriculture sector along robust infrastructure development, rapid industrialisation and rising urbanisation are major factors expected to catalyze PVC demand in the coming years. Besides, rising investments in industrial and commercial infrastructure are increasing the demand for PVC in pipes and fitting production industries. Moreover, a rising usage of PVC in flooring application across domestic, commercial and industrial premises, due to its durability, ease of installation, recyclability and availability in variable thicknesses would aid market growth. Favourable government policies and investments, rising population and growing construction activities are expected to drive the Indian PVC market. Source: marketwatch.com)

Merits of PVC pipes

• High durability compared to steel and concrete pipes

• Moderate costs for maintenance and installation

• Increased corrosion resistance resulting in safe drinking water

• Highly eco-friendly compared to other pipes and recyclable

• Growing resistance to harmful chemicals and disinfectants

• Easy to install; protected for workers

• Increased flame resistance; ignition point of 450 degrees Celsius

Types of PVC pipes

UPVC pipes: UPVC pipes are the most widely used with a market size of ~ H212 Billion in FY 2019-20. UPVC pipes have been aided due to elements like affordability and durability compared to galvanised iron pipes. Irrigation and agriculture related activities contribute nearly 65 per cent demand of these pipes while the remaining is contributed by the residential and commercial plumbing. The UPVC market size stood at USD 48.10 Billion in 2021 and is expected to register revenue CAGR of 6.8 per cent during the forecast period. Steady growth of the construction segment and growing adoption of UPVC pipes for construction is expected to drive revenue of the segment. UPVC is the ideal option for pipes to be used in bore wells due to its high resistance to mineral exposure, corrosion and high tensile strength to endure the effects of extreme physical conditions. These pipes are preferred in the transportation of chemicals, oils and other similar liquids due to their strength and neutrality. These pipes are expected to grow at 10-11 per cent CAGR over FY 2019-20 to FY 2023-24, largely led by the agriculture and plumbing segments.

CPVC pipes: CPVC pipes are preferably used in plumbing applications, along with hot and cold, potable water distribution systems. The CPVC segment possesses immense growth potential in India due to certain features like ability to withstand high temperatures, longevity, fire resistant, being corrosion and lead-free. CPVC is mainly segmented into two types based on end use applications: (a) pipe grade and (b) fitting grade. Most of the raw materials used are imported; as a result, branded players maintained a strong position in this segment. CPVC pipes are used as a material for water piping systems in residential along with commercial construction to combat corrosive water at temperatures of 40?-50?C or above. The segment is expected to grow at a ~ 15-17 per cent CAGR between FY 2019-20 to FY 2023-24 fuelled by the plumbing segment, demand for which is largely B2C in nature. CPVC pipes are ideally suited for self-supporting constructions where temperatures go up to 90?C.

HDPE pipes: The HDPE pipes segment is expected to witness 10-11 per cent CAGR over FY 2019-20 to FY 2023-24. These pipes are mainly used in irrigation, sewerage and drainage, city gas distribution, chemical and processing industries. These pipes have been gaining prominence compared to traditional metal and cement pipes due to their longevity, low maintenance and durability.
PPR pipes: PPR pipes are prominently used in various industrial applications and are comparatively expensive compared to other plastic pipes. This segment accounts for 4-5 per cent of Indian plastic pipes industry and is expected to witness a CAGR growth of 6-7 per cent between FY 2019-20 and FY 2023-24. (Sources: Chemanalyst, Equirius securities)

Growth drivers of plastic pipe sector

Seamless water supply: Uninterrupted water supply is a necessity in residential projects and irrigation. Therefore, consumers have increasingly spent on piping through new demand generation or the replacement of existing pipes.

Downstream applications: There are multiple downstream applications of plastic pipes such as irrigation (45 per cent of demand), real estate plumbing and WSS (38 per cent), urban/semi-urban sewerage infra (12 per cent) and industrial uses (<5 per cent)

Economical: Pipes, though bulky in nature, are low priced products, especially in residential real estate. The overall piping cost is generally 1-2 per cent of the residential project.

Growing awareness: Pipes have to be concealed during the time of construction and any leakage or joint loosening requires masonry work, which damages the paint, tiles and the overall look of the house; thus, maintenance cost becomes higher in case of a pipe burst. With increasing awareness about durability of plastic pipes and BIS standards, residential consumers (UPCV, CPVC) and farmers (UPVC) are increasingly opting for better quality pipes to minimise these problems

Major end user plastic pipe segments

Irrigation: The irrigation sector accounts for the majority of the end user segment for plastic pipes, accounting for 45-50 per cent of pipes demand in India. Strong government focus on the development of irrigation-related infrastructure can catalyze the demand for plastic pipes. These could help farmers enhance their incomes, reduce their dependence on monsoons and eliminate water wastage. Plastic pipes are principally applicable in irrigation and water sewage system projects of key public sector companies. According to the Union government, against the total agricultural land of 1,80,888 thousand hectares, the cultivated land in the country is 1,53,888 thousand hectares. Out of the total available agricultural land 71,554 thousand hectares or only 40 per cent is irrigated. The government has taken various schemes such as Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), Accelerated Irrigation Benefits Programme (AIBP), Command Area Development and Water Management (CADWM) Programme to improve the irrigation infrastructure in the country. The government has extended PMKSY till 2025-26 with an overall outlay of Rs.93,068.56 Cr. Various measures like the increase in agricultural credit and setting up of a micro irrigation fund is expected to catalyze irrigation sector growth.

Real estate: Real estate is a key end user of plastic pipes in India. Despite rising construction costs and a record hike in the repo rate (225 bps) in 2022, the real estate sector witnessed a considerable upswing. After two long years of pandemic-induced lockdowns and subsequent economic turmoil, the industry experienced a comprehensive recovery this year throughout Tier I, II, and III cities. Indians real estate witnessed a boom in 2022 with a boost in commercial and residential space construction and absorption. With the soaring demand, commercial real estate market in the country witnessed triple-digit growth in the office and retail segments while the residential segment witnessed a remarkable growth of 40 per cent compared to last year. Moreover, policy initiatives like Smart Cities Mission and AMRUT (Atal Mission for Rejuvenation and Urban Transformation) is expected to enhance the demand. PMAY (Urban) scheme has now been extended till December 31, 2024, because only 61.77 Lakh houses have been completed as against the total of 12.26 Million houses sanctioned under the scheme. The Governments vision to offer piped water access across urban and rural households is expected to enhance growth opportunities. (Source: housing. com, Mint)

Urban infrastructure: According to World Bank estimates, India is expected to invest $840 Billion over the next 15 years or an average of $55 Billion per annum into urban infrastructure to meet the needs of the fastest growing urban population. By 2036, 600 Million people could be living in urban cities in India, accounting for 40 per cent of the population. This is expected to put additional pressure on the already stretched urban infrastructure - with more demand of clean drinking water, reliable power supply, efficient and safe road transport amongst others. The Government announced a Rs.48,000-Cr allocation under the Pradhan MantriAwasYojana, emphasising the need of affordable housing. By 2023, around 8 Million dwellings are scheduled to be finished across the country (Sources: World Bank, Economic Times)

Telecom: Indias telecom industry is the second largest in the world with a subscriber base of 1.17 Billion as of August 2022. India has an overall tele-density of 85.15 per cent, of which the tele-density of the rural market stands at 58.44 per cent while the tele-density of the urban market is 134.71 per cent. Over the last few years, the industrys exponential growth is mainly driven by affordable tariffs, wider availability, roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, evolving consumption patterns of subscribers, governments initiatives towards supporting Indias domestic telecom manufacturing capacity and a favourable regulatory environment. (Source: Invest India)

Gas: Indias net production of natural gas fell in the last decade to 33,131 Million standard cubic metre (mmscm) in FY22 compared to 39,753 mmscm in FY13. The gross domestic production of natural gas in FY22 was 34,024 mmscm compared to 28,672 mmscm in FY21. Indias consumption of natural gas hit 63,907 in FY22 compared to 57,367 mmscm in FY13 due to a growing demand from the fertiliser, city gas distribution (CGD) and other sectors. Of the total gas consumption in India in FY22, 30 per cent was consumed by the fertiliser sector followed by the CGD sector (20 per cent) and power sector (15 per cent), among others. Domestic natural gas demand is expected to grow at around 8-10 per cent CAGR between 2022 and 2027. The demand is also expected to be driven through sectors such as residential, transport and energy. (Source: Financial Express)

Government initiatives for the irrigation sector

Har Ghar Nal Se Jal: To achieve the mammoth task of providing tap water supply to every rural household in a span of five years, Rs.3.60 Lakh Crore has been allocated. Rs.60,000 Crore has been allocated to ‘Har Ghar Jal in Union Budget 2022-23 to provide tap water to 3.8 Crore households. (Source: PIB)

Jal Shakti Abhiyan: Jal Shakti Abhiyan was launched in 2019 to improve the availability of water and to make the Jal Andolan a mass movement. Catch the Rain campaign 2022 was launched as an extension of the Jal Shakti Abhiyaan with the aim to make the biggest rain water conservation campaign ever. (Source: India water portal.org)

Jal Jeevan Mission: Under the Union Budget FY 2023-24, the Government of India allocated H69,684 Cr for the implementation of Jal Jeevan Mission.

The scheme had benefitted 19 Cr rural households as on January 2023. More than 10 Cr household tap connections were offered under this scheme till January 2023.

Pradhan Mantri Krishi Sinchai Yojana (PMKSY): The government plans to increase rural prosperity through this scheme by increasing water availability to all agricultural farms, resulting in increased production and productivity.

Real estate growth drivers

Increasing population: Indias population is expected to surpass China by 2023 and reach 1.51 Billion by 2030. Population growth is expected to catalyze the demand of Indian real estate segment.

Growing urbanisation: Indias urban population is expected to stand at 675 Million (accounting for 43.2 per cent of the countrys population) by 2035. This is expected to lead to a rise in housing demand accordingly. (Source: the hindu. com) Traction in tier II and III cities: Tier II and Tier III cities are the focal point of Indias real estate boom. Growing demand for plastic pipes in tier II and tier III cities was witnessed due to increased real estate investments in these cities.

Increased demand from the rural sector: The demand from the rural sector increased, driven by growing disposable income of the farmers due to government initiatives like higher MSPs and the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA). Marketing efforts along with the launch of GST will help the branded players to enhance rural penetration.

Tax incentives by the government:

The interest-subvention scheme, interest deduction from taxable income, tax exemption for principal repayment and capital gains exemption are also expected to be key growth drivers for the sector. (Source: CRISIL Research)

Government initiatives for urban infrastructure sector

Smart City Mission: India has set big goals for urban development, expanding 4,000 new smart cities with a population of 5 Lakh each by running the mission into a movement till the end of its deadline.

Housing for all by 2022: Launched in June, 2015, Housing For All Scheme aimed at providing pucca houses to all eligible urban beneficiaries as on March 2022. However, the government extended the scheme till December, 2024. Out of the total sanctioned 123 Lakh houses, 62 Lakh houses were completed and proposals of 40 Lakh houses were received late from the States, which require another two years to complete them.

Road construction: The pace of highway construction was 28.64 Kms a day in FY 2021-22, amid the pandemic-related disruptions and a longer-than-usual monsoon in some areas of the country. The Ministry constructed 3,559 Kms of National Highways up to September in FY 2022-23 as compared to 3,824 Kms constructed up to September in FY 2021-22. The road transport and highways ministry aims to construct a record 18,000 Km of highways in FY 2022-23 at a pace of 50 km per day. The FY 2022-23 target is 33 per cent higher than the last financial year. (Source: Business Standard)

Company overview

Kriti Industries manufactures plastic polymer piping systems, moulded plastic products, and accessories. The Company has emerged among the most respected and renowned players in the industry. It operates in the polymer segment across agriculture, building products, micro irrigation and infrastructure.

The applications of the companys products include the following sectors:

Agriculture: RPVC pipe and fittings, casing pipe, PE coils, sprinkler systems, submersible pipe, suction and garden pipe.

Building products: SWR and drainage pipe and fittings, CPVC and plumb pipe and fittings, garden pipe and water tank.

Micro-irrigation: Micro-irrigation lateral (inline and online), sprinkler systems, RPVC pipes and fittings.

Infrastructure and datacom: RPVC ring fit pipe (elastomeric) and fittings, HDPE and MDPE (PE) pipes and fittings, PLB telecom duct and micro-ducts.

Revenues: Revenue during the year stood at H736.00 Cr as against Rs.546.08 Cr in FY 2021-22.

Interest and finance costs: Net interest and finance costs stood at Rs.17.35 Cr in FY

2022-23.

Profit after tax: The Company reported a loss after tax of Rs.23.41 Cr as against profit of Rs. Rs.14.03 Cr. in the previous year

Key ratios

Particulars	FY 2022-23	FY 2021-22
Turnover	732.47	544.74
Debt-equity ratio	0.97	0.68
Return on equity ( per cent)	(17.00)	10.00
Book value per share (H)	26.08	31.00
Earnings per share (H)	(4.72)	2.83

Risk management

Economic risk: The Companys performance might be adversely affected due to an economic slowdown.

Mitigation: Indias GDP posted a growth of 7.2 per cent in FY 2022-23. The economic growth along with government targets of doubling farmers income is expected to improve irrigational activity, resulting in a growing demand for pipes.

Product risk: The Companys failure to produce various kinds of products could impact off-take. Mitigation: The Company is engaged in the manufacturing of polymer pipes, mainly Poly Vinyl Chloride (PVC) and Poly Ethylene (PE), suitable for portable water supply, irrigation, building construction and infrastructure. The comprehensive product portfolio enables the Company to enhance visibility by serving various market segments.

Competition risk: Entry of increasing number of rival firms could affect the Companys profitability and market share

Mitigation: Over the years, the Company has emerged among the most respected companies across the country by providing quality products and services to customers. The Company retained more than 400 of its customers for more than 5 years

Information technology

The Company has successfully implemented SAP HANA, which enabled the business in increasing business analytics and efficiency, leading to growing operational efficiencies. The Company is carrying on investing in Information Technology (IT) viz. SAP Enterprising Resource Planning System, CRM, HRM and Sales Force Mobility with the aim of reinforcing its infrastructural base and operational efficiencies. Continuous advancements in technology will help in attaining growth of the Company for the foreseeable future.

Internal control systems and their adequacy

The Companys robust and intricate internal control systems ensure there is efficient use and protection of resources and compliance with policies, procedures and statutory requirements. We have developed well-documented guidelines, procedures for authorisation and approvals which include processes such as audits. Integral to the overall governance, we have a well-established internal audit frame work which extensively covers all aspects of financial and operational controls, covering all 30 l Kriti Industries (India) Limited units, functions and departments. The Company also has an efficient financial reporting system in place. Our internal audit team consists of senior members across various functional departments some of whom are also key managerial personnel of the company. They actively engage in the evaluation and improvement of various functions and activities of the Company including restaurant operations and other support functions and departments. The Company also has an Internal Audit cell which supports the Audit Committee besides the independent review of internal controls, operating systems and procedures by external auditors

Human resources

The Company employed 605 officers and workers as on 31st March, 2023. The development of individual and collective competencies has helped the company in increasing the value of human capital and in turn, stay in step with market developments and requirements. The company implemented programs and projects related to skill development and up gradation of employee competence. Knowledge sharing programmes were conducted. A number of innovative ideas received from employees were implemented, resulting in enhanced quality, cost optimisation and productivity.

Cautionary statement

The statements in the ‘management discussion and analysis section describing the Companys objectives, projections, estimates and prediction may be considered as forward-looking statements. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market positioning, expenditures and financial results are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Companys actual results, performance or achievement may thus differ materially from those projected in such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statement on the basis of any subsequent developments, information or events.