S V Global Mill Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDIAN ECONOMY REVIEW:

Reserve Bank of India in its various reports indicated that, the Indian economy, expanded at a robust pace in FY 2023-24, with real GDP growth exceeding 8% from 7% in the previous FY2022-23. It was the third successive year of 7 percent or above growth, RBI said. The GDP growth for FY2024-25 is projected at 7.0 per cent with risks evenly balanced.

The central bank sees a strong Economy in the back of solid investment demand, which is supported by healthy balance sheets of banks and corporates, the governments focus on capital expenditure and prudent monetary, regulatory and fiscal policies.

The Indian economy is navigating the drag from an adverse global macroeconomic and financial environment and is well-placed to step up growth trajectory over the next decade in an environment of macroeconomic and financial stability.

As headline inflation eases towards the target, it will spur consumption demand especially in rural areas. It is also emphasised that the Indian economy would have to navigate challenges posed by rapid adoption of AI/ML (artificial intelligence/machine learning) technologies as well as recurrent climate shocks.

Consumption demand, especially in rural areas, to spur as headline inflation eases towards targeted level and hence the economy is well-placed to step up growth trajectory over next decade in the environment of macroeconomic and financial stability.

However, the risks to food inflation remains vulnerable to supply-side shocks. Even though the prolonged wars in Asia and Middle East have not ended, the effect of the same on Oil Price and the Indian Economy seems to be minimal, unless otherwise there is an escalation in the future. All major countries including the United Nations Organisations (UNO) are working for an amicable solution to resolve the conflict at the earliest.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

REAL ESTATE SECTOR:

The real estate market is in its best in the past decade, growing in both Commercial & Residential sectors. While there is a robust increase in the selling prices, the saleable areas also have raised by 10% due to demand. Factors like availability of well-planned infrastructure and presence of strong employment opportunities led by Service Sectors like, IT, ‘start-ups Education, Health Care and the manufacturing industry have augmented the attraction of city markets like Chennai Bengaluru, Hyderabad, etc. The growing demand for property in the cities is boosted by factors such as the proximity to major transportation hubs, excellent healthcare facilities, and a pleasant climate, especially Bengaluru. There is also significant land available for development in the region. Bengaluru and Chennai are growing at a fast pace with presence of zestful professional class and a well-developed corporate ecosystem where both residential as well as Commercial spaces demand is on the rise.

OPPORTUNITIES AND CHALLENGES:

OPPORTUNITIES:

As explained earlier, the demand for Commercial and Residential spaces are increasing and your Company diligently safeguarded the inventories in the form of lands in both Bengaluru and Chennai waiting for the rightful opportunity to invest, construct commercial properties, expand and optimise the returns to the stake holders. Our Company has a Zero Debt policy and would like to expand on the internal accruals and revenue.

CHALLENGES:

As in every Industry, your Company also faces both Macro and Micro challenges; While the wars in Asia and Middle Ease are continuing since 2022 resulting in Volatility in prices of Crude Oil, minerals and other major Raw Materials, the cost of Construction materials, including Steel, Cement, sand, Bricks, Electric, Plumbing, HVAC and finishing materials have raised resulting in increase of construction cost. These challenges need to be overcome by all the real estate companies, including our Company.

SEGMENT WISE PERFORMANCE:

At present, the Company is engaged only in the business of real estate activities and there is no other separate reportable segment.

BUSINESS OUTLOOK:

As mentioned earlier and as per RBI, India is the only large Economy in the World to have continuous GDP growth of above 7% in the previous 3 financial Years and FY2024-25 should be a good business year; though we anticipate downward trends in the other part of global economies, the real estate sector in India is going to continue on its journey of long-term growth as we see, larger disposable incomes, growing urbanization, etc. The strong growth potential shall lead to high demand in offices and commercial space in Tier 1 and Tier 2 cities. Post Covid era, the co-working industry, has successfully adapted to changing work requirements and the demand of floor area is expected to cross 50 million sq. ft. by the end of the year 2025 which would be a YOY 15% increase. The repo rate is maintained in the same level in the last one year by RBI, could impact residential sales to some extent, particularly in the affordable segment. The real estate market will continue to be driven by various other factors such as supply and demand, regulatory framework, and overall economic conditions Organisations are working on the concept of green, sustainable living in India and moving towards sustainability and this move will help to achieve their goals more efficiently.

To achieve the targeted GDP growth, the need of the hour is investments in the Commercial Space, Logistics & Warehousing which is gaining significant importance. We can see spurt of rentals of Commercial spaces in Metros by Worlds top 10 Companies like Meta, Apple, Amazon and various start-ups and Unicorn Companies. Your Company is constantly looking for suitable avenues to identify and venture in to new projects and business opportunities.

RISKS AND CONCERNS:

The Company is exposed to a number of risks such as economic, regulatory, taxation and environmental risks as well as sectoral investment outlook. Some risks that may arise in the normal course of business and could impact their ability to address future developments, comprise credit risk, liquidity risk, counterparty risk, regulatory risk, commodity inflation risk and market risk. The Companys strategy on focusing real estate activity for various geographical segments is exposed to economic and fluctuating market conditions. The Company continues to implement robust risk management policies that set-out the tolerance for risk management and the requisite mitigation plans.

Cautionary Statement: The above Management Discussion and Analysis contains certain forward-looking statements within the meaning of applicable security laws and regulations. These pertain to the Companys future business prospects and business profitability, which are subject to several risks and uncertainties and the actual results could materially differ from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, 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, regulations etc. In accordance with the Regulations on Corporate Governance as approved by the Securities and Exchange Board of India, 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 Company does not undertake to make any announcement, in case any of these forward-looking statements become materially incorrect in future or update on any forward-looking statements made from time to time on behalf of the Company

ECONOMIC RISKS:

An economic slowdown and uncertainty in the economic system like the natural risks associated with the construction sector are beyond the control of a company so also the risks that have to do with the economy. A sluggish economy or even recession in a specific industry such as IT/ITES can lead to a decrease in sales or market rates for residential projects. In extreme cases of an economic downturn, a company may also run the risk of customer insolvency though the registration of property happens only on the receipt of all the dues from a customer. These factors could decrease the revenue generation from some or all companys businesses, adversely effecting its business and future growth. Further, uncertainties in the national or global economic scenario, a changing demographic profile of the country and inflation also have a bearing on the functioning of a company operating in the real estate sector. In India, a real estate companys business is dependent on the easy availability of finance. An economic slowdown can result in fund shortages as lenders may want to act safe.

POLITICAL RISKS:

Changes in government policy, social and civil unrest, and political developments in or effecting India could affect the Companys business interests. Specific laws and policies effecting real estate, foreign investments and other matters effecting investments in the companys securities could also change.

LIQUIDITY RISKS &CREDIT RISKS:

LIQUIDITY RISKS: The real estate industry has its own challenges and dynamics. The time required to liquidate a real estate property can vary depending on the size, volume, demand, quality and location of the project.

CREDIT RISKS: In most of the cases properties are on a joint venture/sale basis. Credit risks arise when its JV partners or the buyers do not discharge their obligations and, in such circumstances, it may be required to make additional investments in a joint venture or become liable for the other partys obligations

POLICY AND REGULATORY RISKS:

REGULATORY RISKS: Local, state, and central regulatory bodies control the real estate sector through laws and regulations governing the acquisition, construction and development of land including zoning, permitted land use, fire safety standards, height of buildings and access to water and other utilities. Our business is subject to all these laws and regulations. Any delay in obtaining an approval under these laws and regulations will expose the business to higher risks.

LEGAL RISKS: In some legal proceedings relating to the land, in relation to taxation matters, any adverse decision may have a significant effect on the companys business, prospects, and financials

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a comprehensive Internal Financial Control System commensurate with the size, scale and complexity of its operations. Your Company lays greater importance on internal control systems across the organization. The Company has adequate system of internal control which helps the management to review the effectiveness of financial and operating control as well as to ensure that all the assets are safeguarded and more productive. The system encompasses the major processes to ensure reliability of financial reporting, compliance with policies, procedures, laws, and regulations, safeguarding of assets and economical and efficient use of resources. We have a qualified and independent Audit Committee from the Board and quarterly meetings are attended by the Internal Auditors & Statutory Auditors. The Audit Committee reviews the adequacy and efficiency of internal controls and recommends any improvements or corrections. These internal controls ensure efficiency in operations, compliance with the policies of the Company.

DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT:

Employees are at the heart of your Company and a major resource for the future. Its their inexorable commitment that helps your Company to create spaces that enhance quality of life. Keeping the spirits high at workplace needs a sound mental and physical fitness and deep-rooted culture which promotes work life balance.

Your Companys focus is to continue building organizational capability and capacity, leverage and nurture key talent, encourage meritocracy and enhance people utilization aligned with the business strategy. As on March 31, 2023 your Company had 15 employees.

DETAILS OF KEY FINANCIAL RATIONS:

Particulars	FY 2023-24	FY 2022-23	% Of Variance
a) Current Ratio	62.46	59.41	5%
b) Debt - Equity Ratio	0.12	0.11	9%
c) Return on equity Ratio	-0.01	0.03	-121%
d) Net Capital Turnover Ratio	0.03	0.03	16%
e) Net Profit Ratio	-0.04	0.22	-118%
f) Return on Capital Employed	.001	0.01	-77%
g) Return on Investment	-0.001	0.004	- 121%

DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements for the year ended 31st March, 2024, the applicable Indian

Accounting Standards ("Ind AS") have been followed. Pursuant to the notification dated February 16, 2015 issued by Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2017.

Place: Chennai	By Order Of The Board
Date: 17.05.2024	For S V GLOBAL MILL LIMITED
	Sd/-
	E. SHANMUGAM
	Chairman
	DIN: 00041968