mid india industries ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENT

During the first half of Financial Year 2022-23, the global economy encountered various difficulties, including fluctuating prices of essential goods and resources, elevated inflation, and disruptions in supply chains resulting from the Russia-Ukraine conflict. However, the economy demonstrated resilience in the second half as it began to recover from the impacts of the pandemic and geopolitical tensions. Central banks implemented synchronized rate hikes and stricter monetary policies to effectively address these challenges, combat inflation and stabilize the markets. According to the International Monetary Funds (IMF) projection, Global growth is projected to fall from an estimated 3.5 percent in 2022 to 3.0 percent in both 2023 and 2024. The rise in central bank policy rates to fight inflation continues to weigh on economic activity. Global headline inflation is expected to fall from 8.7 percent in 2022 to 6.8 percent in 2023 and 5.2 percent in 2024. Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward.

Indian economy

The Indian economy remained relatively robust amid global economic headwinds. This buoyant performance along with overall optimism and compelling macroeconomic indicators, exemplify strong economic fundamentals for the country. India has emerged as one of the fastest growing major economies and clocked a growth of 7.2% in Financial Year 2022-23, reveals the National Statistical Office (NSO).

During the Financial year under review, Company has started trading in heavy plant & machineries and spare parts business and also planning to initiate real estate development business soon which could generate surplus fund and Board expect to maintain the same in coming fiscal years.

SEGMENT

During the Financial Year your company operated in following business segments i.e. Leasing and Trading division.

Leasing Division:

During the financial year your company has total income of Rs. 27.00 Lacs in comparison to previous year Rs. 27.00 Lacs and incurred Net Profit of Rs. 4.71 Lacs in comparison to previous year Net Profit of Rs. 8.33 Lacs. Management of the Company discontinue the Lease

Agreement with effect from 1 May, 2023 , company may initiate the working on real estate business.

Trading Division:

During the financial year your company has total income of Rs. 1440.74 Lacs in comparison to previous year total income Rs. 1870.94 lacs and earned Net profit of Rs. 99.32 Lacs in comparison to previous year net profit 70.48 Lacs.

OPPORTUNITIES AND THREATS

The Company is operating in trading activities in plant and machineries. Trading business are becoming more and more competitive and the margins in this continue to be under pressure. Further there is a good opportunity to import and export the plant and machineries required for industry and others. The Board feels this business is high growth area. The long term prospects for Indian economy remains bright owing to the growth of internal consumption driven by the countrys demographic dividend, rapid urbanization, growth of manufacturing and infrastructure development. The overall business sentiments in the country have turned positive after the stable government at the centre. An intensifying demand for real estate, especially in the affordable housing segment, provides a significant opportunity for developers. This has been driven by growing aspirational population, higher disposable incomes and a revival in the employment sector. Meeting this demand can lead to substantial returns on investment and market expansion. Your Company continues to achieve this by focusing on trading & real estate division.

Government initiatives and policy reforms Government initiatives and policy reforms, such as the Pradhan Mantri Awas Yojana (PMAY), the Real Estate Regulatory Authority (RERA) and tax incentives, create a favourable environment for real estate development. Developers who align their projects with these initiatives can benefit from financial incentives, increased customer trust and a supportive regulatory framework

INDUSTRY OUTLOOK

India became the fifth largest and fastest growing economy of the world and approaching to secure third position in the world in the coming years. Government initiatives such as Make in India coupled with the new governance regime will boost confidence of global investors and act as a catalyst for overall growth of the industry.

Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. Indias real estate market is estimated to increase at a CAGR of 19.5% during 2017- 2028. The market anticipates it to reach US$ 650 billion, representing 13% of Indias GDP by 2025. In 2022, Indias real estate sector experienced price growth of 6%. Increasing share of real estate in the GDP would be supported by increasing industrial activity, improving income level and urbanisation

RISKS AND CONCERNS

Risk Management plays a key role in business strategy and planning discussions. The Company has implemented a comprehensive risk management framework to identify, understand and manage risks associated with the business. The Companys risk management framework helps in conducting business in a well-controlled environment. It has in place a mechanism to identify, assess, monitor and mitigate various risks associated with the business.

Strict internal processes and controls enable the Company to effectively manage the business risks it encounters on daily basis. Risk Management Framework of the company ensures achievement of its strategic objectives; the framework is supported by risk processes, identification, assessment, response, action, mitigation and control. Risk Management framework of the company proactively addresses risks and seizes opportunities so as to gain competitive advantage, and also protects and creates value for the stakeholders.

As the real estate industry continues to evolve, the industry faces a multitude of threats and challenges. Rapid technological advancements, changing market trends, and regulatory complexities pose constant hurdles. Moreover, competition intensifies as new players enter the market. Navigating these obstacles requires strategic planning, innovation, and adaptability to ensure continued success in this dynamic landscape.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The companys internal control/supervisory system is established to ensure that the board and management are able to achieve their business objectives in a prudent manner, safeguarding the interest of companys shareholders and other stakeholders whilst minimizing the key risk such as fraud, misleading financial statements, breach of legal and contractual obligations, unauthorized business activities.

HUMAN RESOURCES

The company is focusing the business of trading activities and therefore no substantial employment required. The company is committed to creating a professional culture to nurture and enable people to grow in their careers alongside Companys success. The company constantly strives to strengthen its manpower in alignment with the business needs and continue to engage them through various initiatives in the realm of learning & development opportunities, reward & recognition, employee engagement activities and career growth. As on 31 March, 2023, Company had 3 employees.

INDUSTRIAL RELATION

Your Company enjoyed during the year under review cordial relationship at all levels.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Financial and Operational performance forms part of the Annual Report and is presented elsewhere in the report.

DETAILS OF SIGNIFICANT CHANGES IN THE KEY RATIOS AND RETURN ON NET WORTH

As per the amendment made under Schedule V to the Listing Regulations read with Regulation 34(3) of the Listing Regulations, details key financial ratios and any changes in return on net worth of the Company are given below:

Particulars	2022-23	2021-22	Change in %
Debtors Turnover	4.74	5.96	-21.00
Inventory Turnover	19.74	31.48	-37.00
Interest Coverage Ratio	0.00	0.00	0.00
Current Ratio	0.42	0.49	-15.00
Debt-Equity Ratio	0.00	0.00	0.00
Operating Profit Margin (%)	3.93	4.14	-5.07
Net profit margin (%) or sector-specific equivalent ratio as applicable	3.93	4.14	-5.07

Reason for change of 25% or more in Financial Ratios:

Inventory Turnover: Inventory has been decreased significantly hence ratio is increased

DETAILS OF CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR:

There is Change of 3.30% in Return of Net Worth as compared to previous Financial Year Due to Accumulated Losses as a result of which Net worth of the Company has become Negative

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that could influence the Companys operations include competition, government policies and regulations.