nandani creation ltd Management discussions

1. GLOBAL ECONOMIC 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. The result is that the world ended in 2022 concerned that the following year would be slower.

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

Regional Growth (%)	2022	2021
World Output	3.2	6.1
Advanced economies	3.5	5.0
Emerging and developing	3.8	6.3
economies

[Source: PWC report, EY report, IMF data, OECD data]

2. 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. (Source: IMF).

3. INDIAN ECONOMIC 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 was 7.2% in FY 2022-23. India emerged as the second fastest-growing G20 economy in FY 2022-23. India overtook the 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

	FY20	FY21	FY22	FY23
Real GDP growth (%)	3.7	-6.6%	9.1	7.2

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

As Indias domestic demand remained steady amidst a global slowdown, import growth in FY23 was estimated at 16.5% to $714 billion as against $613 billion in FY22. Indias merchandise exports were up 6% to $447 billion. Indias total exports (merchandise and services) grew 14 percent to a record of $775 billion and is expected to touch $900 billion in FY 2023-24.

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.

Indias total industrial output for FY23, as measured by the Index of Industrial Production or IIP, grew 5.1% year-on-year as against a growth of 11.4 percent in FY 2021-22.

India moved up in the Ease of Doing Business (EoDB) rankings from 100th in 2017 to 63rd in FY23. As of March 2023, Indias unemployment rate was 7.8 percent.

Per capita income almost doubled in nine years to H172,000 during the year under review, a rise of 15.8 percent 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 percent in 2022-23.

4. OUTLOOK

There are green shoots of economic revival, marked by an increase in rural growth during the last quarter and an appreciable decline in consumer price index inflation to less than 5 percent in April 2023. India is expected to grow around 6-6.5 percent (as per various sources) in FY2024, catalysed in no small measure by the governments 35% capital expenditure.

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 growth of 7.2% and America and Europe is 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 various 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.

(Source: IMF data, RBI data, Union budget 2023-24 data, CRISIL report, Ministry of Trade & Commerce, NSO data)

5. APPAREL MARKET OVERVIEW

Indias textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries.

India is among the top garment-manufacturing countries in the world. Indian textiles and apparel products have a history of fine craftsmanship across the entire value chain from fibre, yarn, and fabric to apparel with high global appeal. Indias cotton, silk, and denim are highly popular in other countries, and Indian apparel too has found success across fashion centres around the world. India is one of the largest consumers and producers of cotton with the highest acreage of 13.5 million hectares which is 38% of the global area under cotton cultivation. The Indian textile and apparel industry is highly diversified with a wide range of segments ranging from products of traditional handloom, handicrafts, wool, and silk products to the organized textile industry in India.

Indias textile and apparel market size is growing at a CAGR of 12% from US$ 152 billion in 2021 to reach US$ 225 billion by 2025. The industry is one of the biggest contributors to the economy with a 2% contribution to the gross domestic product (GDP) which is approx. US$ 70 billion. It is also the second largest employer after agriculture, providing direct employment to 45 million people and 100 million people in the allied sector. Andhra Pradesh, Telangana, Haryana, Jharkhand and Gujarat are the top textile and clothing manufacturing states in India.

Indias textiles industry has around 4.5 crore employed workers including 35.22 lakh handloom workers across the country.

The industry (including dyed and printed) attracted foreign direct investment (FDI) worth US$ 4.2 billion from April 2000- March 2023. The textiles sector has witnessed a spurt in investment during the last five years.

6. TEXTILES & APPAREL INDUSTRY OVERVIEW:

India is the worlds second-largest producer of textiles and garments. It is also the fifth-largest exporter of textiles spanning apparel, home and technical products. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk and wool to synthetic/man-made fibres like polyester, viscose, nylon and acrylic. The textiles and apparel industry contribute 2.3% to the countrys GDP, 13% to industrial production and 12% to exports. Around 45 million people are working in the textile business, including 3.5 million people who work on handlooms. The Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by 2025-26. The Indian apparel market stood at US$ 40 billion in 2020 and is expected to reach US$ 135 billion by 2025. India enjoys a comparative advantage in terms of skilled manpower and in cost of production relative to other major textile producers. Indias textile and apparel exports (including handicrafts) stood at US$ 44.4 billion in FY22, a 41% increase YoY. Exports of readymade garments including cotton accessories stood at US$ 6.19 billion in FY22.

The textiles industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US$ 3.99 billion from April 2000- March 2022. 100% FDI (automatic route) is allowed in the Indian textile sector. The Governments Rs. 10,683 crore (US$ 1.44 billion) PLI scheme is expected to be a major booster for the textile manufacturers. The scheme proposes to incentivise MMF (man-made fibre) apparel, MMF fabrics and 10 segments of technical textiles products. The Government approved the Mega Integrated Textile Region and Apparel (MITRA) Park scheme worth Rs. 4,445 crore (US$ 594.26 million) to establish seven integrated mega textile parks with state-of-the-art infrastructure, common utilities and R&D lab over a three-year period, which will boost textile manufacturing in the country.

Top players in the textiles sector are attaining sustainability in their products by manufacturing textiles that use natural recyclable materials. Top players in the textiles sector are attaining sustainability in their products by manufacturing textiles that use natural recyclable materials.

India enjoys a comparative advantage in terms of skilled manpower and in cost of production, relative to major textile producers.

Huge funds in schemes such as Integrated Textile Parks (SITP) (US$ 184.98 million) and Technology Upgradation Fund Scheme (US$ 961.11 million) released by the Government during 2015-16 to 2019-20 to encourage more private equity and provide employment.

7. INDIA N E COMMERCE INDUSTRY

In recent years India has experienced a boom in internet and smartphone penetration. The number of internet connections in 2021 increased significantly to 830 million, driven by the Digital India programme. Out of the total internet connections, ~55% of connections were in urban areas, of which 97% of connections were wireless. The smartphone base has also increased significantly and is expected to reach 1 billion by 2026. This has helped Indias digital sector and it is expected to reach US$ 1 trillion by 2030. This rapid rise in internet users and smartphone penetration coupled with rising incomes has assisted the growth of Indias e- commerce sector. Indias e-commerce sector has transformed the way business is done in India and has opened various segments of commerce ranging from business-to-business (B2B), direct-to-consumer (D2C), consumer-to-consumer (C2C) and consumer-to- business (C2B). Major segments such as D2C and B2B have experienced immense growth in recent years. Indias D2C market is expected to reach US$ 60 billion by FY27. The overall e-commerce market is also expected to reach US$ 350 billion by 2030 and will experience 21.5% growth in 2022 and reach US$ 74.8 billion.

The B2C E-commerce is expected to grow steadily over the forecast period, recording a CAGR of 8.68% during 2023-27. According to a recent report by Redseer, Indias e-B2B market is projected to reach a GMV of US$ 100 billion by 2030.

According to Grant Thornton, e-commerce in India is expected to be worth US$ 188 billion by 2025.

With a turnover of US$ 50 billion in 2020, India became the eighth-largest market for e-commerce, trailing France, and a position ahead of Canada.

Indian consumers are increasingly adopting 5G smartphones even before the rollout of the next-gen mobile broadband technology in the country. Smartphone shipments reached 169 million in 2021 with 5G shipments registered a growth of 555% year-on-year over 2020. Indian consumers are increasingly adopting 5G smartphones even before the rollout of the next-gen mobile broadband technology in the country. Smartphone shipments reached 150 million units and 5G smartphone shipments crossed 4 million in 2020, driven by high consumer demand post-lockdown. According to a report published by IAMAI and Kantar Research, Indias internet users are expected to reach 900 million by 2025 from ~622 million internet users in 2020, increasing at a CAGR of 45% until 2025.

The Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second- largest e-commerce market in the world by 2034. Indias e-commerce sector is expected to reach US$ 111.40 billion by 2025 from US$ 46.20 billion in 2020, growing at a 19.24% CAGR, with grocery and fashion/apparel likely to be the key drivers of incremental growth. The Indian online grocery market is estimated to reach US$ 26.93 billion in 2027 from US$ 3.95 billion in FY21, expanding at a CAGR of 33%. By 2021, total e-commerce sales are expected to reach US$ 67-84 billion from the US$ 52.57 billion recorded in 2020.

For the 2021 festive season, Indian e-commerce platforms generated sales worth US$ 9.2 billion gross GMV (Gross Merchandise Value), a 23% increase from last years US$ 7.4 billion.

The Indian e-commerce sector is ranked 9th in cross-border growth in the world, according to the Payoneer report. Indian e- commerce is projected to increase from 4% of the total food and grocery, apparel and consumer electronics retail trade in 2020 to 8% by 2025. As of November 2022, the GEM portal has served 12.28 million orders worth Rs. 334,933 crores (US$ 40.97 billion) from 5.44 million registered sellers and service providers for 62,247 buyer organizations.

Online penetration of retail is expected to reach 10.7% by 2024 compared with 4.7% in 2019. Moreover, online shoppers in India are expected to reach 220 million by 2025. According to a report published by IAMAI and Kantar Research, Indias internet users are expected to reach 900 million by 2025 from ~622 million internet users in 2020, increasing at a CAGR of 45% until 2025.

Through its Digital India campaign, the Government of India is aiming to create a trillion-dollar online economy by 2025. It has formed a new steering committee that will look after the development of a government-based e-commerce platform. The new committee, set up by the Commerce Ministry, will provide oversight on the policy for the Open Network for Digital Commerce (ONDC), which is an e-commerce platform that the government is backing for the development. The ONDC will serve as the infrastructure for setting up the final storefront, which will be similar to Flipkart and Amazon.

Revenue in the Womens Apparel segment amounts to US$44bn in 2023. The market is expected to grow annually by 3.48% (CAGR 2023-2027).

8. THE COMPANY & OUR BRANDS- OUTLOOK:

As on March 31, 2023, the Company sold 8,50,295 pcs on gross basis through its various Marketplace portals, exclusive brand outlets (EOBs) and various Proprietary sales Channels. We also sell our products through our own Brand s website i.e. www.jaipurkurti.com websites and various online marketplaces. Your Company "NANDANI CREATION LIMITED" is engaged in the manufacturing and online trading of Women Apparels like kurtis, ethnic tops, palazzo, Patiala salwar suits, dupattas, quilted jackets, leggings, different variety of Bottom Wears, Shirts, Western wears etc.

We have a track record of developing homegrown brands leveraging our deep understanding of the needs and aspirations of Indian women. Over the years, we have expanded our brand portfolio to three brands, each positioned to cater to the well-defined needs of their respective target consumers:

"Jaipur kurti "Jaipur kurti is the leading D2C women Indian wear Brand in the new age ethnic segment. "Amaiva-By Jaipur kurti: Amaiva is a high-end brand where style meets affordability.

"Desi Fusion": With our brand Desi Fusion we are catering to prominent B2B fashion destinations across India

We focus on creating innovative designs and optimising fit and sizing while emphasizing higher quality. We launch approximately new styles every year introducing freshness to our consumers every two to three weeks. We can achieve these parameters through an institutionalised product development process that starts with in-depth research, trend forecasting, concept/story development, fabric and textile designing, garment styling, sample development, presentations to internal teams and road shows for our sales partners. We work with 250+ suppliers ranging from artisan groups to large mills, enabling production of a highly differentiated product every single time.

The Retail Journey of the Company started in the year 2018 with the opening of our 1st Retail Flagship Store "Amaiva-By Jaipur Kurti" which later got converted in "Jaipur Kurti.com" in January, 2020 and today till date we have 8 Retail Stores expanded in different states across India.

Our brand is best known for its ethnic wear, kurtis and traditional designs having wide range of colours, patterns and sizes. We distribute our products by following e-retail model and have developed a sustainable business model over the period.

9. OUR KEY DEVELOPMENTS ARE AS FOLLOWS:

-I- Increase in ASP led by brand premiumization:

Over last 2 quarters, company has actively engaged in evolving our brand perception from affordable fashion wear to an aspirational brand. Our efforts got reflected by increase in ASP to Rs 1104 as against Rs 855 in previous quarter and Rs 826 in same quarter last year. This accomplishment serves as a robust foundation for all our future endeavors.

-I- Engaged Bollywood actress "Madhuri Dixit" as the brand ambassador

In our constant commitment to propel the brand into its next phase of growth, the company has collaborated with the renowned Bollywood star, "Madhuri Dixit" who joins us as the esteemed brand ambassador. This strategic alliance is poised to provide dual benefit of endorsing our innovative product designs and fuel our expansive reach into new territories.

-I- Increased presence in proprietary online sales channel, launched B2B website with brand "Desi Fusion- By Jaipur Kurti"

We have invested in development of our proprietary online sales channel to enable an Omni channel offering to the customer. Below are few specific steps being undertaken in this regard:

- Increasing spends towards performance marketing of our website www.iaipurkurti.com.

- Launched our trade channel website https://www.desifusion.store/

- Our mobile app is currently under development, commercial launch very soon

- Upgradation of companys retail software

-I- Expanded retail presence:

In the quarter gone by we expanded our retail store presence in Delhi NCR region by opening our 1st store in Gurugram.

We are in a process of opening our retail stores in Kota, Hubli, Mumbai etc.

-1- Developing franchisee store network

To further strengthen the retail presence and build asset light model company have started to develop its franchisee network and as a first step we have opened our first franchisee store in Jalandhar, Punjab. Going forward, we plan to have multiple stores in FOFO model.

I Benefits of our own sales channel over others

- Higher sales realization leading to brand premiumization

- Collection of customer data

- Cross sell opportunities

- Lower sales return

- Reduced dependence on other websites & vulnerability to their policies

- Stronger Brand Loyalty

10. FINANCIAL HIGHLIGHTS FOR 2021-22:

PARTICULARS

	FY2018	FY2019	FY2020	FY2021	FY2022	FY2023
Net Sales	33.3	37.4	46.9	47.8	62.7	49.53
Operating EBITDA	2.4	3.2	3.2	4.6	2.9	3.0
EBITDA margin	7.1%	8.4%	6.8%	9.7%	4.7%	6.8%
Interest	0.7d>	1.2	1.6	1.8	1.2	2.1
Depreciation	0.3	0.5	0.4	1.1	0.9	1.3
:pbt	1.3	1.5	1.3	2.3	0.2	0.1
Tax	0.4	0.5	0.4	0.6	0.1	0.0
:PAT	0.9	1.1	0.9	1.7	0.1	0.1

11. 2X INCREASE OF OWN CHANNEL CONTRIBUTION IN TOTAL SALES

Particulars (Standalone)	FY23	FY22
Sales through EBO	4.4	3.3
Sales through own website	3.3	1.1
Total own channel sales	7.7	4.4
Own channel contribution in total sales	17.0%	8.0%
Other website sales	37.2	50.8
Total Sales	44.9	55.2
No. of Pcs sold	5,87,086	7,64,866
ASP	850	725

INVEST IN BUILDING GROWTH RUNWAYS AND KEY CAPABILITIES WHILE PRESERVING BALANCE SHEET STRENGTH

12. NANDANIS FA VORABLE POSITIONING:

OFFLINE PLAYERS:

• No legacy burden of offline sales channels (distribution network or own stores)

• Expertise in efficiently managing all operational activities in online business like logistic, inventory, fulfilling and returns through our ERP Softwares

• Attractive price point familiarity of dynamic pricing practice

• Resilient business model having showcased growth even in the pandemic times when all the offline players were struggling

ONLINE PLAYERS:

• Complete operational integration

• Relationship with multiple channel partners with the right mix thereby avoiding any partner dependency

• Recognized as one of the oldest surviving online brand in the industry

• Repeat customers and ability to attract organic traffic

• High conversion ratio

GROWTH DRIVERS

• Favorable demographics of Indian population

• Increasing population of working women

• Shift from Unbranded (unorganised) to Branded (organized) segment

• Migration from offline to online market place

• Increase in per capita income

BUSINESS STRATEGY:

• Developing & strengthening all available online sales channels in the market

• Increasing share in fast growing 3rd party online sales channel

• Focus on growing its own D2C channel under its flagship website domain "Jaipur Kurti" Key reasons for investing in proprietary sales platform:

S To catch the long term trend of D2C business model in the most efficient way S Create customer ownership S Create cross sell opportunities S Reduce 3rd party dependence risk

S This business model is the most effective way to leverage companys existing strengths of managing online business logistics, online customer engagement and executing online sales & branding strategies

• Increase offline stores to compliment online presence as a complimentary sales channel to its core online business. Plan to grow more number of stores from 8 to 25 by the end of FY 2024

• Increasing consumer engagement through social media marketing and Omni channel sales

TECHNOLOGY:

Our digital strategy is built around 5 key focus areas:

ONLINE SALES:

To capitalize on the trend towards an increased share of online business in our industry and business segment, we aim to further enhance our capabilities to manage D2C businesses which include our own Brand.com websites and partners marketplaces. Differentiated product portfolio and customized supply chain processes coupled with best-in-class operational capabilities for superior customer experience have caused this segment to grow in the financial year under review.

OMNICHANNEL EXPERIENCE:

Seamless discovery, purchase and post-purchase journeys across online/offline touch points are the essence for a true omni channel experience for the customer. Omni channel is the integration of all physical and digital channels to offer a unified customer experience and Jaipurkurti.com is on its journey of becoming truly an omni channel business. Jaipurkurti.com launched omni channel play by bringing inventory from stores to Brand.com and marketplaces. In the financial year under review, we scaled up the "Endless aisle" initiative significantly for our own stores, some marketplaces, and Company operated Brand.com. With omni channel capabilities, around 99 percent of seasons styles are available across channel with industry-leading fulfilment rates. We would soon be adding other marketplaces to our omni channel systems to ensure a seamless, effortless and high-quality customer experience

CUSTOMER ENGAGEMENT:

Our strategy is to ensure high consumer retention and increased organic share by delivering personalized and relevant communication leveraging digital technologies. Additionally, it would provide us with detailed insight into consumer purchase behaviour and allow us to deliver differentiated experiences to our consumers

INVENTORY MANAGEMENT:

We are leveraging technology to implement automated and pull-based inventory allocation and replenishment to boost inventory efficiency. Technology will also help us in strengthening our supply chain and improving its responsiveness to demand patterns through enhanced data analytics providing granular sales and inventory visibility across channels.

THOUGHT-TO-SHELF CYCLE:

Our digital initiatives also support our express production capabilities to improve speed to-market and data-supported design and sampling capabilities for closer-to-season and in-season innovation.

13. OPPORTUNITIES & THREATS:

The SWOT Analysis of the company is as follows:

14. MARKETPLACE PERFORMANCE:

The Company is engaged in the manufacturing of Women Apparels such as Kurtas/Kurtis, Kurti with Palazzo, Kurti with Skirt, Pants, Salwar Dupattas etc. The Bifurcation of the Sales marketplace for the FY 2023 is as follows:

15. VALUE DRIVERS:

S Pure play on structural online fashion retail opportunity Online fashion retail is a fast growing opportunity with humungous market opportunity with the available tailwinds Given the pandemic effect, offline to online migration has been fast tracked.

S Asset light and operationally light model providing huge scalability opportunity and wide consumer reach S Long surviving brand awareness enables favorable consumer orientation

S Positioning in the given consumer segment (Female aged 25 65 years) aligns opportunities in other related product categories like kids fashion, male fashion, female western fashion wear, female fashion accessories, etc S Focused management team lead by aspirational, young & energetic promoter S Balanced capital structure with reasonable leverage

16. RISK MANAGEMENT:

The Company is governed by a risk management framework, comprising regular risk assessment by a Committee, review of processes and controls over data flow. Key risks and our mitigation measures are mentioned below:

Fashion risk: Inability to respond to changes in customer preferences and fashion trends on time may have an adverse effect on our business

All of our products are designed through an institutionalised process which includes constant feedback. Structured range architecture and a strong design team helps in ensuring delivery of designs on a timely basis while maintaining an edge in fashion. We have shifted away from a strict two season calendar to bring the planning and production closer to the season specific requirements, resulting in a shorter lead time for production.

Supply Chain risk: Inability to manufacture and supply products on time

We have developed a wide base of suppliers, both for fabrics as well as for manufacturing. We develop long-term relationships with our suppliers who have continued to grow with us. We keep developing new sources, expanding in new geographies to de-risk dependency on the existing base of suppliers as well as to avoid any geographical risk. We are gradually moving to machine learning (ML) led replenishment process to enable a more accurate and quicker replenishment cycle.

Discounting: Trend of longer End of Season Sale (EOSS) and deeper discounting

We are a multi-channel business which gives us the opportunity to get higher realization by selling through alternate channels. The effort is also to launch fresh season stocks in store early, reducing the proportion of stocks being sold at discount.

High Inventory Days: Risk of liquidity, if sales projections are not met

We constantly monitor the freshness of finished goods and ensure that not more than 20 percent of our stock is more than three seasons old. Our aggressive dormancy provisioning policy ensures that older stocks are valued below historical realization values. Express production process, intended to reduce inventory risk and maximize top-selling styles, has already been tested for a meaningful number of styles and we are now expanding it to cover a large proportion of our inventory. A part of our inventory is in raw-material and work-in-process stage for the ongoing and the next season and these do not carry significant risk of obsolescence

17. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the internal audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The internal financial controls as laid down are adequate and were operating effectively during the year.

18. HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS:

Our people are at the heart of how we do business. It is their talent and skills that will take us to our dream of becoming a $1 billion brand. We continue to invest in building best-in-class fashion teams. Recognizing that the workforce will provide critical competitive edge in its growth endeavour, the Company has laid emphasis on recruiting, maintaining and developing its human asset base.

The Company treasures its human resource as it is the most critical element responsible for the growth of the Company. It ensures a safe, conducive and productive work environment across its properties. The Company provides regular skill and personnel development training to enhance employee productivity and keep pace with technological advancements. The experienced and talented employee pool plays a key role in enhancing business efficiency, devising strategies, setting-up systems and evolving business.

19. ENVIRONMENT. CORPORATE SUSTAINABILITY AND SOCIAL RESPONSIBILITY:

Being a responsible corporate citizen, your Company strongly follows to giving back to the society. CSR initiatives help elevate the quality of life of the people by promoting healthcare, education and employment opportunities. Your Company will take numerous initiatives to develop local community around its manufacturing facilities and aims to continue its efforts to build on its tradition of social responsibility to empower communities.

20. FORWARD LOOKING STA TEMENT:

This Management Discussion & Analysis Report contains statements about expected future events and financial and operating results of Raymond Group, which may be classified as forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Further, certain key performance indicators mentioned in the Annual Report are based on classifications made by the Company. Do not place undue reliance on forward-looking statements as a number of factors could cause assumptions and actual future results or events to differ materially from those expressed in these forward-looking statements.

21. CA UTIONARY STA TEMENT

Statements in the Management Discussion and Analysis and Directors Report describing the Companys strengths, strategies, projections and estimates, are forward looking statements and progressive within the meaning of applicable laws and regulations. The Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward looking statements.

ANALYSIS OF MANAGERIAL REMUNERATION

Pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended the statistical analysis of the remuneration paid to Directors and Key Managerial Personnel (KMP) as against the other employees of the company and with respect to the performance of the company (PAT) is given below:

1. The percentage increase in the remuneration of each director and the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year 2022-23:

Name of the Director	Ratio of the remuneration of each director to the median remuneration of the employees	Percentage increase in the remuneration for the Financial Year 2021-22 as compared to previous year remuneration
Mr. Anuj Mundhra	13.17:1	9.09%
Mrs. Vandana Mundhra	5.26:1	9.09%
Mrs. Sunita Devi Mundhra	3.57:1	9.09%

* Median Remuneration of the Employees of the Company being to be Rs. 2,46,000/-

2. The percentage increase in remuneration of following Key Managerial Personnel (KMP), if any, in the financial year 2021-22:

Name of the Director	Ratio of the remuneration of each director to the median remuneration of the employees	Percentage increase in the remuneration for the Financial Year 2020-21 as compared to previous year remuneration
Mr. Dwarka Dass Mundhra	1.48:1
Ms Gunjan Jain	2.85:1	43.75%

3. The percentage increase in the median remuneration of employees in the financial year: -6.81%

4. The number of permanent employees on the rolls of company; 91 Employees

5. The median remuneration of employees of the Company during the Financial year: 2.46 Lakhs

6. Affirmation that the remuneration is as per the remuneration policy of the Company; Remuneration paid during the year ended March 31, 2023 is as per Remuneration policy of the Company

7. Average percentile increase already made in the salaried of the employees other than the Managerial Personnel in the last Financial Year and its comparison with the percentile increase in Managerial Remuneration and justification thereof and point out if there are any exceptional circumstances for increase in Managerial Remuneration:

The average annual increase in the salaries of employees was around 15.45% other than the managerial personnel. There

was an increase of 10.23 % percentage increase in the managerial remuneration, since there was increase in the salary of

KMPs with the approval of shareholders.

DATE: JAIPUR FOR AND ON BEHALF OF NANDANI CREATION LIMITED

PLACE: 01.09.2023

Sd/-

ANUJ MUNDHRA MANAGING DIRECTOR DIN:05202504

Sd/-

VANDANA MUNDHRA WHOLE-TIME DIRECTOR DIN:05202403

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH COMPANYS CODE OF

CONDUCT

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, I hereby confirm that, all Board Members and Senior Management Personnel of the Company of NANDANI CREATION LIMITED have affirmed compliance with the Code of Conduct for Board of Directors and senior management Personnel for the Financial Year 202223.

FOR NANDANI CREATION LIMITED

Place: JAIPUR Date: 01.09.2023

Sd/-

Dwarka Dass Mundhra Chief Financial Officer

CEO/CFO CERTIFICATION

To,

The Board of Directors,

Nandani Creation Limited

We, Mr. Anuj Mundhra, Chairman and Managing Director and Mr. Dwarka Dass Mundhra, Chief Financial Officer ("CFO") of the Nandani Creation Limited, to the best of our knowledge and belief, certify that:

a. We have reviewed Financial Statements and the Cash flow Statement for the year ended 31^st March, 2023 and that to the best of our knowledge, belief and Information:

i. These financial statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading.

ii. These financial statements together present a true and fair view of the Companys affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b. These are to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Companys code of conduct.

c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit committee, wherever applicable, deficiencies in the design or operation of such internal controls, if any, of which we have are aware and the steps that we have taken or propose to take to rectify these deficiencies.

d. We have indicated to the auditors and the Audit Committee, wherever applicable,

i. That there is no significant change in internal control over financial reporting during the year under reference;

ii. There is no significant change in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii. There is no significant fraud of which we have become aware and that the involvement therein, if any, of the management or an employee having a significant role in the Companys internal control system over financial reporting.

DATE: JAIPUR FOR AND ON BEHALF OF NANDANI CREATION

LIMITED PLACE: 01.09.2023

Sd/-

ANUJ MUNDHRA MANAGING DIRECTOR DIN: 05202504

Sd/-

DWARKA DASS MUNDHRA CHIEF FINANCIAL OFFICE