Kritika Wires Ltd Management Discussions

An Economic Overview Global Economy:

The world GDP grew by 2.8 % in 2022 compared to 6.1 % in 2021. While this may appear as a huge slide, the reality is quite opposite.

In FY23, global economic activity experienced a broad-based slowdown beyond anticipation owing to a number of factors. Globally energy cost increased due to geopolitical tensions and supply side disruptions distorted consumer prices. As a result most economies faced very high inflation with the global average being around 9 % and consequently Central bank hiked interest rates to restore price stability, which lead to fewer investments.

However, inflation is being tamed in most countries and the IMF anticipates global headline inflation to fall from 8.7% in 2022 to 7%in 2023 and 4.9% in 2024. It also anticipates core inflation to decline slowly and most countries to reach their inflation targets by 2025

The World Bank expects investment growth in emerging markets and developing economies to remain below its average rate of the past two decades. The IMF has also laid stress on multilateral cooperation between countries for fast-tracking the process of global green-energy- transition and preventing fragmentation owing to geopolitical tensions

The IMF anticipates that any further adverse shocks could impede global progress. Well- concerted global and national level efforts are necessary to mitigate the risks of global recession and debt distress in EMDEs and to support a major increase in EMDE investment

There are, however, chances of a fasterthan-expected recovery of the global economy due to reduced inflation, structural reforms by governments, an increase in overall demand and the reopening of China. The overall scenario calls for cautious optimism.

Indian Economy:

India emerged as one of the fastest-growing major economies with a GDP growth of 7.2% after weathering several challenges. Growth was underpinned by investment activity led by the Governments strong capital expenditure thrust, subsequent capital formation and return in private consumption. However, inflation remained above RBIs tolerance level for almost the entire year despite RBIs efforts or raising the repo rate.

Rupee depreciation along with high global commodity prices and a growing economy led to the widening of the current account deficit (CAD). However, in FY23, Indias forex reserves were sufficient for funding this CAD and this also enabled India to intervene in the forex market in order to manage volatility in the rupee.

Overall exports (merchandise and service) were US$ 770.18 billion worth during FY23 growing at 13.84% over the previous financial year. Factors such as high inflation, rising interest rates, weak external demand slowed industrial activity. As a result for theFY23 IIP grew by 5.1% against a growth of 11.4% in FY22

Annual GST collection in the financial year 2022-23 was at C18 lakh crore, clocking a growth of 22% over last year. It shows the resilience of the Indian economy amid several global headwinds. Net Direct Tax collections (provisional) for the FY23 stood at C16.61 lakh crore marking a growth of 17.63% on a y-o-y basis.

In an effort to push the infrastructure capex, in the financial budget for FY24, the Central Government announced a massive increase of 33% in the capex outlay to C 10 lakh crore, about 3.3% of the GDP. This is said to have a multiplier effect resulting in additional economic activities and job creation with all round economic activity being the single point agenda.

Outlook: Indias GDP growth for FY24 is estimated between 6-6.5%. Primary growth drivers are likely to be domestic demand and a pick-up in capital formation. Growth will also be supported by the structural reforms introduced by the government and the massive capex investments budget. The slowing global demand may push down global commodity prices and improve Indias CAD in FY24. The fiscal deficit for FY24 has been projected to be around C17.95 lakh crores or 6.4% of the GDP in FY24.

Headline inflation is projected to decline owing to easing commodity prices and a slowdown in consumer demand. The RBI has forecasted Indias GDP growth at about 6.5% in FY24. Despite a downgrade from FY23, it will continue to be one of the fastest-growing economies in the world. India was ranked 63rd in 2022 in ease of doing business across the world among 190 countries, by the World Bank, improving its rank from 142 in 2014 and is expected to move a few notches higher in the coming years. This augurs well for India Inc.

Industry Structure and Development

Kritika Wires Ltd.", a professionally managed company was incorporated in the year 2004. It is engaged in manufacturing of all types of Steel Wire and Galvanized Wire that ultimately cater to the needs of the State Electricity Boards, Power Grid Corporation of India Ltd, etc. The company is run by a group of qualified and highly experienced professionals, equipped with most sophisticated machines backed by well-equipped, testing facilities.

The Company produces wires of high precision to the utmost satisfaction of its National and International Customers. The companys state-of-the-art factory is situated in Sankrail Industrial Park, Howrah, West Bengal and is well connected logistically.

The Companys main business activities are, manufacturing and sales of all types of Winding Wires to industry and trade segment. The Company is an Indian manufacturer and supplier of Winding Wires in organized market. The Company is known for its unique product range with its portfolio of all gauges backed by a widespread distribution network. The Company has a robust business model that has continuously steered its growth over the years. It is one of the most trusted brands providing winding wire solutions to both retail and industrial customers spread across the country.

The pandemic significantly impacted the Companys business.

With the second wave of the pandemic, the Companys business operations werent affected as the government has not imposed restrictions on manufacturing and trade.

Opportunities and Threats

The Company always focus on all the available opportunity in the Domestic and International Market. It is continuously working on maintaining and improvising its quality to match the international standards and maintain a smooth supply chain management.

Segments

The Company is dealing in only one segment i.e., manufacturing and trading of wires. The Company is committed to achieve a reputation of market leader for the manufacture and supply of galvanized and non-galvanized wires by introducing the latest technologies, deploying trained personnel who are backed by adequate resources, striving for perfection in everything it does.

Outlook

Our focus remains on a key agenda of localization for some of high cost imports as a key de- risking mechanism against future currency depreciation impact on our business.

Risk and Concerns

Your Company is faced with risks of different types, each of which need varying approaches for mitigation. It has identified each of the risks and implemented measures to mitigate such risks

with the help of competent senior management and outside specialist consultants.TheCompany has been handling the risk of the competitive forces through its organized business approach, by the strength of its reach, superior quality products, safe products and maintaining high standards of service levels to its customers. The Company enjoys the advantages of economies of scale and backward integration.

Internal Control Systems 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 Chairperson 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.

Discussion on financial performance with respect to operational performance.

The discussion on financial performance with respect to operational performance is given in Boards Report.

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 teams. Recognizing that the workforce will provide critical competitive edge in its growth endeavor, the Company has laid major emphasis on recruiting, maintaining and developing its human asset base.

The Company sees its relationship with its employees as critical to the future and believes that every employee needs to possess apart from competence, capacity and capabilities, sustainable values, current and contemporary which would make them useful, relevant and competitive in managing the change constructively for overall growth of the organization. To this end, the Companys approach and efforts are directed towards creating a congenial work atmosphere for individual growth, creativity and greater dedicated participation in organizational development. In-house and external training and instructions are also provided to employees at all levels, which help in attaining professional and productive culture by a blend of technology and highly skilled manpower.

Cautionary Statement

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.

For and on behalf of the Board

	Sd/-	Sd/-
	Naresh Kumar Agarwal	Hanuman Prasad Agarwal
	Chairman & Executive Director	Managing Director
	(DIN: 01020334)	(DIN: 00654218)
Place: Kolkata
Date: 6th September, 2023