magnum ventures ltd Management discussions

G L O B A L E C O N O M Y

Overview

The global economic growth was estimated at a slower 3.2% in 2022, compared to 6% 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% in 2022, among the highest in decades. US consumer prices increased about 6.5% 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 USD 26 trillion from peak, equivalent to 26% 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%.

Gross FDI inflows equity, reinvested earnings and other capital – declined 8.4% to USD 55.3 Bn in April-December. The decline was even sharper in the case of FDI inflows as equity: these fell

15% to USD 36.75 Bn between April and December 2022. Global trade expanded by 2.7% in 2022 (expected to slow to 1.7% in 2023).

The S&P GSCI TR (Global benchmark for commodity performance) fell from a peak of 4,319.55 in June 2022 to 3,495.76 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 (%)	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: Reported GDP	China: GDP	United Kingdom: GDP	Japan: GDP	Germany: GDP
growth of 2.1% compared to 5.9% in 2021	growth was 3% in 2022 compared to 8.1% in 2021	grew by 4.1% in 2022 compared to 7.6% in 2021	grew 1.7% in 2022 compared to 1.6% in 2021	grew 1.8% compared to 2.6% in 2021

(Source: PWC report, EY report, IMF data, OECD data)

Outlook

The global economy is expected to grow 2.8% in 2023, influenced by the ongoing Russia-Ukraine conflict. Concurrently, global inflation is projected to fall marginally to 7%. 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% 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% in 2024. Interestingly, even as the global economy is projected to grow less than

3% for the next five years, India and China are projected to account for half the global growth (Source: IMF).

I N D I A N E C O N O M Y

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 grew by 7.2% 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

Regional growth (%)	FY 20	FY 21	FY 22	FY 23
Real GDP growth (%)	3.7	-6.6%	8.7	7.2

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

Regional growth (%)	Q1FY 23	Q2FY 23	Q3FY 23	Q4FY 23E
Real GDP growth (%)	13.1	6.3	4.4	6.1

(Source: Budget FY 2023-24; Economy Projections, RBI projections)

According to the India Meteorological Department, the year 2022 delivered 8% higher rainfall over the long-period average. Due to unseasonal rains, Indias wheat harvest was expected to fall to around 102 Mn metric tons (MMT) in 2022-23 from 107 MMT in the preceding year. Rice production at 132 Mn metric tons (MMT) was almost at par with the previous year. Pulses acreage grew to 31 Mn hectares from 28 Mn hectares. Due to a renewed focus, oilseeds area increased 7.31% from 102.36 Lac hectares in 2021-22 to 109.84 Lac hectares in 2022-23. Indias auto industry grew 21% in FY 2022-23; passenger vehicle (UVs, cars and vans) retail sales touched a record 3.9 Mn units in FY 2022-23, crossing 3.2 Mn units in FY19. The commercial vehicles segment grew 33%. Two-wheeler sales fell to a seven-year low; the three-wheeler category grew 84%.

Till the end of Q3FY 2022-23, total gross non-performing assets (NPAs) of the banking system fell to 4.5% from 6.5% a year ago. Gross NPA for FY 2022-23 was expected to be 4.2% and a further drop is predicted to 3.8% in FY2023-24.

As Indias domestic demand remained steady amidst a global slowdown, import growth in FY 2022-23 was estimated at 16.5% to USD 714 Bn as against USD 613 Bn in FY 2021-22. Indias merchandise exports were up 6% to USD 447 Bn in FY 2022-23. Indias total exports (merchandise and services) in FY 2022-23 grew 14% to a record of USD 775 Bn in FY 2022-23 and is expected to touch USD 900 Bn in FY 2023-24. Till Q3 FY 2022-23,

Indias current account deficit, a crucial indicator of the countrys balance of payments position, decreased to USD 18.2 Bn, or 2.2% of GDP. Indias fiscal deficit was estimated in nominal terms at ~ Rs.17.55 Lac Cr and 6.4% of GDP for the year ending 31^st March, 2023. (Source: Ministry of Trade & Commerce) Indias headline foreign direct investment (FDI) numbers rose from USD 74.01 Bn in 2021 to a record USD 84.8 Bn in FY 2021-22, a 14% Y-o-Y increase, till Q3FY 2022-23. India recorded a robust USD 36.75 Bn of FDI. In 2022-23, the government was estimated to have addressed 77% 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 USD 70 Bn in 2022, primarily influenced by rising inflation and interest rates. Starting from USD 606.47 Bn on 1^st April, 2022, reserves decreased to USD 578.44 Bn by 31^st March, 2023. The Indian currency also weakened during this period, with the exchange rate weakening from Rs.75.91 to a US dollar to H82.34 by 31^st March, 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% in March 2023. Inflation data on the Wholesale Price Index, WPI (calculates the overall price of goods before retail) eased to 1.3% during the period. In 2022, CPI hit its highest of 7.79% in April; WPI reached its highest of 15.88% in May 2022. By the close of the year under review, inflation had begun trending down and in April 2023 declined below 5%, 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% year-on-year as against a growth of 11.4% in 2021-22.

India moved up in the Ease of Doing Business (EoDB) rankings from 100^th in 2017 to 63^rd in 2022. As of March 2023, Indias unemployment rate was 7.8%. In 2022-23, total receipts (other than borrowings) were estimated at 6.5% higher than the Budget estimates. Tax-GDP ratio was estimated to have improved by 11.1% Y-o-Y in RE 2022-23. The total gross collection for FY 2022-23 was H18.10 Lac Cr, an average of Rs.1.51 Lac a month and up 22% from FY 2021-22, Indias monthly goods and services tax (GST) collections hit the second highest ever in March 2023 to Rs.1.6 Lac Cr. For 2022–23, the government collected Rs.16.61 Lac Cr in direct taxes, according to data from the Finance Ministry. This amount was 17.6% 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% over the previous year. Indias GDP per capita was 2,320 USD (March 2023), close to the magic figure of USD 2500 when consumption spikes across countries. Despite headline inflation, private consumption in India witnessed continued momentum and was estimated to have grown 7.3% in 2022-23. Outlook: There are green shoots of economic revival, marked by an increase in rural growth during the last quarter and appreciable decline in consumer price index inflation to less than 5% in April 2023. India is expected to grow around 6-6.5% (as per various sources) in FY2024, catalysed in no small measure by the governments 35% 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. Private sector investments could revive. What provides optimism is that even as the global structural shifts are creating a wider berth for Indias exports, the country is making its largest infrastructure investment. This unprecedented investment is expected to translate into a robust building block that, going ahead; moderates logistics costs, facilitates a quicker transfer of products and empowers the country to become increasingly competitive. This can benefit Indias exports in general, benefiting several sectors. The construction of national highways in 2022-23 was 10,993 kilometres; the Ministry of Road Transport and Highways awarded highway contracts of 12,375 km in the last financial year (Source: IMF).

The global landscape favours India: Europe is moving towards a probable recession, the US economy is slowing, Chinas GDP growth forecast of 4.4% is less than Indias GDP estimate of 6.8% and America and Europe are experiencing its highest inflation in 40 years.

Indias production-linked incentive appears to catalyse the downstream sectors. Inflation is steady. India is at the cusp of making significant investments in renewable energy and other sectors and emerging as a suitable industrial supplement to China. India is poised to outpace Germany and Japan and emerge as the third-largest economy by the end of the decade. The outlook for private business investment remains positive despite an increase in interest rates. India is less exposed to Chinese economic weakness, with much less direct trade with China than many Asian peers. Broad-based credit growth, improving capacity utilisation, governments thrust on capital spending and infrastructure should bolster investment activity. According to our surveys, manufacturing, services and infrastructure sector firms are optimistic about the business outlook. The downside risks are protracted geopolitical tensions, tightening global financial conditions and slowing external demand.

U N I O N B U D G E T F Y 2 0 2 3 - 2 4 P R O V I S I O N S

The Budget 2023-24 sought to lay the foundation for the future of the Indian economy by raising capital investment outlay by 33% to H10 Lac Cr, equivalent to 3.3% of GDP and almost three times the 2019-20 outlay, through various projects like PM Gati shakti, Inclusive Development, Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition and Climate Action, as well as Financing of Investments.

An outlay of Rs.5.94 Lac Cr was made to the Ministry of Defence (13.18% of the total Budget outlay). An announcement of nearly Rs.20,000 Cr was made for the PM Gati Shakti National Master Plan to catalyse the infrastructure sector. An outlay of Rs.1.97 Lac Cr was announced for Production Linked Incentive schemes across 13 sectors. The Indian government intends to accelerate road construction in FY 2023-24 by 16-21% 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

G L O B A L P A P E R I N D U S T R Y R E V I E W

Global: Ironically, papers role has grown in the digital age, serving as packaging material for the e-commerce revolution. The global pulp and paper market size was valued at USD 3,92,455.06 Mn in 2022 and is expected to expand at a CAGR of 0.91%, reaching USD 4,14,256.21 Mn by 2028. Since 2010, it has remained relatively stable, with an average output of roughly 400 Mn metric tons per year. The primary produced paper type was packaging paper and board, growing in demand due to the online shopping boom. The consumption of paper is expected to continue rising over the next decade, reaching a projected volume of 476 Mn metric tons by 2032. In 2021, China remained the worlds largest consumer of paper and paperboard, consuming 132.7 Mn metric tons. The paper industry has faced a range of challenges. The Russian-Ukraine war created challenges in obtaining coal for energy generation and it also affected export and import activities due to the non-availability of shipping containers.

In 2021, the combined paper and paperboard consumption in the United States, Japan, Germany, India and Italy accounted for 32% of the global total, reflecting a significant quantity consumed in these countries. The most in-demand type of paper worldwide was container board, used for manufacturing corrugated boxes (or cardboard) and serving various packaging solutions. (Source: statista. com, Market watch) India: The Indian paper and paperboard packaging market size is expected to grow from USD 12.07 Bn in 2023 to USD 16.64 Bn by 2028, at a CAGR of 6.63% during the forecast period. The paper and paperboard packaging business experienced growth over the last decade, owing to changes in substrate choice, expansion of new markets, changing ownership dynamics and government initiatives to ban plastic. Indias paper consumption is expected to grow at a rate of 6 to 7% per annum, reaching a milestone of 30 Mn tonnes by the FY 2026-27.

The packaging industry in India is growing rapidly, covering various end-user segments such as food and beverages, healthcare, hygiene and home care, among others. Strong demographics, rising disposable income, growing consumer awareness and increased demand for processed food and entry of multinational companies in sectors like food, beverages, e-commerce and pharmaceuticals are driving the growth of the paper and paperboard packaging industry. With a considerable increase in organized retail, the demand for paper packaging is expected to increase due to the rapid increase in supermarkets and modern shopping centers. Moreover, the Central Pollution Control Board (CPCB), a federal agency under the Ministry of the Environment, released a list of steps to outlaw specific single-use plastic products from June 2022. Such measures are expected to drive the demand for paper packaging in the country.

The growth of the Indian economy could not only lead to increased disposable incomes, higher literacy rates and growth in the FMCG sector, but will also encourage the use of paper, with paperboard and packaging dominating the majority of the paper market while stationery holds the second-largest share. Consumers, in response to tightening environmental norms, are exhibiting a preference for paper over plastic in packaging applications.

(Source: researchandmarkets.com, thepulpandpapertimes.com, mordorintelligence. com, business-standard.com)

G L O B A L H O S P I T A L I T Y A N D T O U R I S M I N D U S T R Y R E V I E W

Global: According to the Hotel in 2032 report, tourism is expected to contribute to the worldwide economy at an average annual rate of 5.8% between 2022 and 2032, which is more than double the 2.7% average annual growth rate of the global economy. The contribution of this sector to the overall economy is estimated to enhance by 71% in the Asia-Pacific region by the end of 2022 on account of a rise in domestic spending and the return of foreign tourists. The countries that are anticipated to experience a large increase in foreign visitor arrivals include Malaysia, Japan and Australia. By the end of 2023, the travel and tourism industry in the

Asia-Pacific region is anticipated to reach pre-Covid levels.

The international tourist arrivals in 2022 reached 900 Mn, which is nearly double the figure of 421 Mn in 2021 but still 37% lower compared to 2019 according to data from the United Nations World Tourism Organisation (UNWTO). In 2022, Europe, the largest destination region globally, recorded 585 Mn arrivals. The international tourism sector is anticipated to strengthen its recovery, supported by pent-up demand, particularly from the

Asia-Pacific region, as destinations and markets gradually reopen.

The ongoing recovery can be observed in outbound tourism spending from major source markets. The surge in demand and exceeding initial expectations has presented significant operational and workforce challenges for tourism companies and infrastructure, with airports being particularly impacted. India: The tourism and hospitality industry is one of the largest service industries in India. Tourism plays a vital role as an integral pillar of the Make in India program. The Indian tourism sector is expected to grow at a rate of 6.7% per annum and contribute 9.2% to the GDP, amounting to USD 488 Bn by 2029. The Indian hospitality sector achieved yet another milestone as the branded hotel room supply has crossed the 1.5 Lac mark in 2022.

India has emerged as a preferred destination for medical tourism, with its world-class hospitals and highly skilled medical professionals. The Tourism and Hospitality industry in India provides diverse opportunities in sub-segments like timeshare resorts, convention centers, motels and heritage hotels. Investment prospects also exist in the establishment of tour operations and travel agencies to cater to the growing influx of tourists.

Various international hospitality companies (Hyatt, Hilton, Accor and Wyndham) aim to further expand in India after witnessing strong growth in their business in the calendar year (CY) 2022 resulting from the post-pandemic recovery with strong pent-up demand and relaxation of travel-related restrictions. The Indian hospitality sector closed 2022 with occupancy in the range of 59-61%, recording a 15-17 percentage points improvement over 2021 and only 5-7 percentage points lower than 2019. According to HVS Anarock, the average room rates recovered completely in 2022, crossing 2019 levels by almost 1-3% and stood higher 37-39% higher than 2021 levels. The revenue per available rooms increased by 89-91% in 2022 compared to 2021 and remained lower by 7-9% from 2019. (Source: Make in India.com, India Today.in)

M A G N U M S P R E S E N C E

The Company is primarily involved in the manufacturing of paper and operates in the hotel industry. With a widespread network of dealers across India, the Company has established a robust presence for its products in the domestic market. Besides its domestic operations, the Company extends its reach by exporting the products to neighbouring countries, the Middle East and various third-world nations. The Companys cream wove and maplitho products have gained preference among copy manufacturers, publishers and printers. Similarly, coated duplex board has earned a reputation in the packaging industry for its versatility in various types of packaging applications.

The hotel unit, known as Country Inn & Suites by Carlson, Sahibabad, Delhi NCR, is the second-largest worldwide within the Country Inn & Suites by Carlson brand and holds the distinction of being the first eco-friendly vegetarian concept five-star hotel. The hotel division, under the renowned brand of Country Inn & Suites, commenced operations on 15^th

February, 2009 and boasts a five-star rating with 216 rooms.

O P P O R T U N I T I E S

Paper industry

Resource efficiency and the bio-economy present significant opportunities for the paper and pulp industries. Innovative processes provide opportunities to create new products and applications using cellulose fiber, resulting in increased added value. Indias packaging industry is projected to achieve a CAGR of around 26.7% between 2022 and 2027. The growing demand for packaging is driven by population growth, rising incomes, evolving lifestyles, increased media penetration through the internet and television, as well as a thriving economy.

The Indian government has been continuously consulting industry experts to maximise the potential of the packaging sector. (Source: mordorintelligence.com, single-market-economy.ec.europa.eu)

Hotel industry

With its modern infrastructure, the hotel industry has the potential to attract customers year-round, ensuring a continuous flow of guests. The worlds globalisation is leading to a greater availability of booking and travel options for individuals. Technology is actively contributing to the growth of the hotel industry.

In the hotel industry, various opportunities can be leveraged to outperform competitors, such as enhanced cross-selling strategies, fostering uniqueness, targeting local and international feeder markets, exploring untapped industry opportunities, improving service delivery, implementing online booking systems, offering flexible pricing options and addressing health concerns. (Source: soegjobs.com, marketingtutor.net, catalaconsulting.co.uk)

T H R E A T S

Paper industry	•Capital-intensive industry	•Rigid labour market
•Quality and cost of raw materials procurement	•High cost of technology	•Safety emergencies
	Hotel industry	•Terrorism and political uneasiness
•Increased competition from the digital media especially for newsprint	•High employee turnover	•Emergence of epidemics
•Predominance of small	•High taxes
unorganised players

F I N A N C I A L O V E R V I E W

Analysis of the profit and loss statement

Revenues: Revenues from operations registered a 40.38% growth from Rs.33,160.13 Lac in FY 2021-22 to Rs.46,549.88 Lac in FY 2022-23.

Margins: EBITDA for the year was Rs.4,742.73 Lac as against Rs.2,536.38 Lac in FY 2021-22. EBITDA margin of the Company increase to 10.19% in FY 2022-

23 from 7.65% in FY 2021-22. The profit after tax excluding exceptional items of the Company was Rs.2,818.69 Lac in FY 2022-23 compared to Rs.834.82 Lac in FY 2021-22.

Analysis of the Balance Sheet

Sources of funds: The capital employed by the Company increased to Rs.97,559.54 Lac as on 31^st March, 2023 from Rs.26,664.71 Lac as on 31^st March, 2022 owing to internal accruals and upward revaluation of PPE by adopting the revaluation model. The debt-equity ratio of the Company stood at 0.28 in FY 2022-23 compared to -5.35 in FY 2021-22.

Applications of funds: Fixed assets (gross) of the Company increased 159.94% from Rs.45,971.42 Lac as on 31^st March, 2022 to Rs.1,19,497.44 Lac (including upward revaluation of PPE by adopting revaluation model) on 31^st March, 2023

Working capital management:

Total current assets of the Company increased by 8.84% from Rs.10,180.45 Lac as on 31^st March, 2022 to Rs.11,080.71 Lac as on 31^st March, 2023. Current assets included current investment and cash and bank balance.

Inventories, including raw materials, work-in-progress and finished goods, among others, increased to Rs.5,684.98 Lac on 31^st March, 2023 from 3,291.31 Lac as on 31^st March, 2022. Trade receivables as at 31^st March, 2023 were Rs.3,990.17 Lac compared to Rs.5,553.69 Lac as at 31^st March, 2022.

Key ratios and numbers

Particulars	FY 2021-22	FY 2022-23	Reasons for more than 25% change
EBITDA/turnover	0.08	0.10
Debtors/turnover	5.65	9.64	During the year under consideration, there was an increase in sales/ revenue, which have an effect on increase in the debtor: turnover ratio
Inventory/turnover	11.39	10.25	During the year under consideration, the top line of the Company increased; the Company increased its inventory to fulfil theneeds of the customers and market.
Interest coverage ratio	10.54	11.85
Debt-equity ratio	-5.35	0.28	During the year under consideration, the Company has increased its equity share capital and reduced its debts
Current ratio	0.72	0.83	No major change
Net profit margin (%)	2%	15%	During the year under consideration, the Company incurred good profit; at the same time, the lender reduced debt. Accordingly, there was an increase in the net profit margin ratio.
Book value per share (Rs. )	-13.61	138.70
Earnings per share (H)	1.37	18.78
Return on net worth (%)	10.06%	12.14%

R I S K M A N A G E M E N T

Paper industry

Environment risk: The Companys operations could be disrupted due to a non-compliance with environmental regulations

Mitigation: The Company invested in an advanced effluent treatment plant and chemical recovery unit for recycling the black liquor produced in the pulping process

Competition risk: The business is exposed to considerable risk and potential pricing strategy implications as a result of low-cost imports facilitated by favorable government policies in other countries.

Mitigation: The Company gains a competitive edge in the global market by leveraging economies of scale, implementing cutting-edge technology and strategic partnerships with stakeholders, empowering it to offer competitive rates.

Raw material risk: The Company is dependent on waste paper and other materials as raw materials for paper production, faces potential disruptions in production due to factors such as unavailability, limited availability or price fluctuations of these inputs.

Mitigation: The Companys close proximity to raw material sources, strong vendor relationships, cost-saving measures, efficient inventory management and robust hedging policies ensure steady availability and mitigate raw material price volatility.

Policy risk: The implementation of new policies or modifications to existing policies can have an impact on the Companys business, posing a risk to revenue flow.

Mitigation: The Companys skilled management team monitors policy actions and formulates business strategies accordingly, leveraging government incentives to enhance its market position.

People risk: Inability to find competent professionals might affect quality. Mitigation: The Company prioritizes investments in the training and development of its employees to keep them constantly updated.

Hotel industry

Cyber vulnerabilities: The risks are associated with hacking incidents and the exposure of personal and sensitive guest data.

Mitigation: The Company implements in-depth cyber risk assessment, remedial actions and cyber security training and awareness programs.

Abuse of social media and other media by guest /staff / stakeholders: The hospitality industry, with its various direct guest interfaces is particularly vulnerable to the impact of social media.

Mitigation: The Company continuously monitored social media comments and provided timely responses.

Employee and customer well-being:

Inability to ensure guest confidence in terms of hotel hygiene and cleanliness might affect employee and customer well-being

Mitigation: The Company provided protective care, effective communication and counseling services to the customers.

Data governance: Inability to ensure the accuracy and accessibility of data analytics.

Mitigation: The Company maintained consistency in data input for effective data warehousing and analytics.

Impact of climate change on organization: The hotel industry is at risk from the impacts of climate change and the potential dangers that arise as a result.

Mitigation: The Company consistently monitored the environment while incorporating renewable or alternative energy sources.

Data privacy: Inability to safeguard the privacy of data owners might create a risk to the business Mitigation: Implementing internal audit, continuous monitoring, establishing data processor/controller agreements with relevant vendors and making necessary changes to the policies and processes.

H U M A N R E S O U R C E S A N D I N D U S T R I A L R E S O U R C E S

Competent and motivated human resources serve as the foundation for the Companys expansion. The Companys employment philosophy focuses on respect, role clarity and empowerment, while its human resources policy centers on equal opportunity, personal growth, fairness, trust and teamwork. The Company invests extensively in skill development and people retention, goal setting, performance-based appraisal, conducive workplace, employee engagement and leadership development. The Companys people strength stood at 1,421 as on 31^st March, 2023.

I N T E R N A L C O N T R O L S Y S T E M S

The Company has established a sound internal control system which contributes to safeguarding the shareholders investment and the Companys assets. A sound system of internal control facilitates the effectiveness and efficiency of operations, helps ensure the reliability of internal and external reporting and assists compliance with laws and regulations. The Company has an audit committee which oversees the adequacies of the system of the internal control and report to the board. Also the Company has appointed an internal auditor to conduct internal audit of the functions and activities and report to the Board. All the above business control procedures ensure efficient use and protection of the resources and compliance with the policies, procedures and status.

The Company carries out necessary upgradations to keep the hotels in good condition and to offer better value in terms of great ambience and comfort, while keeping the needs of our customers at the core of these changes.

The Company undertook continuous improvement in the Food Safety Management System by training and optimizing the capacities of people, processes and technologies as an ongoing exercise. To increase the rigour in respect of food safety, hygiene and cleanliness audits were conducted by an external audit partner, ensuring implementation of FSSAI guidelines and standards.

C A U T I O N A R Y S T A T E M E N T

Managements Discussion and Analysis Report contains forward looking statements based on certain assumptions and expectations of future events and the Company cannot assure that these assumptions and expectations are accurate and cannot derive a particular conclusion. Although the Management has considered future risks as part of the discussions, future uncertainties are not limited to the Management perceptions. The report contains the risks and uncertainties arising to the Company but it cannot be figured out exactly due to the fluctuations in earnings, ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, government policies and actions with respect to investments, fiscal deficits, regulation etc. In accordance with the Code of Corporate Governance approved by the Securities and Exchange Board of India (‘SEBI), the Shareholders and readers are cautioned that in the case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness though the same are based on sources thought to be reliable. The changing economic and business conditions and rapid technological innovations are creating an increasingly impact on the industry. The Company does not undertake to make any announcement in case any of these forward looking Statements become materially incorrect in future or any update made thereon.