Mac Charles (India) Ltd Management Discussions

Our Company has been reporting consolidated results considering the results of its subsidiary. This discussion, therefore, covers the financial results and other developments during April 2023 to March 2024. Some statements in this discussion describing the projections, estimates, expectations or outlook may be forward looking. Actual results may, however, differ materially from those stated because of several factors such as changes in government regulations, tax regimes, economic developments within India and abroad, exchange rates and interest rates fluctuations, impact of competition, demand and supply constraints.

1. INDIAN ECONOMY:

The countrys gross domestic product (“GDP”) increased at a compound annual growth rate (“CAGR”) of 5.7% to ? 161 trillion in Fiscal 2023 from ? 87 trillion in Fiscal 2012.

In Fiscal 2024, real GDP is expected to grow by 7.6%. Even as the agricultural economy slowed sharply in Fiscal 2024 following a weak monsoon, the surge in nonagricultural economy has more than offset it. The government-driven investment push, along with easing input cost pressures for industry, has also played a major role in shoring up growth. However, services have been slowing with waning pent-up demand (post pandemic), with the exception of financial, real estate and professional services, which has powered ahead on the back of robust growth in banking and real estate¹.

2. INDUSTRY INSIGHT:

Indias real estate sector is expected to expand to US$ 5.8 trillion by 2047, contributing 15.5% to the GDP from an existing share of 7.3%.

In FY23, Indias residential property market witnessed with the value of home sales reaching an all-time high of Rs. 3.47 lakh crore (US$ 42 billion), marking a robust 48% year-on-year increase. Indias physical retail landscape is poised for a substantial boost, with nearly 41 million sq. ft of retail developments set to be

operational between 2024 and 2028 across the top 7 cities, encompassing projects in various stages from construction to planning.

For the first time, gross leasing in Indias top seven markets surpassed the 60 million sq. ft mark, reaching an impressive total of 62.98 million sq. ft marking a substantial 26.4% increase compared to the previous year. Notably, technology companies held the highest share in leasing activity at 22% during first quarter of 2024.Engineering and manufacturing (E&M) companies accounted for 13%, and banking, financial services and insurance account for 12%. Flexible space operators increase by 48%, showcasing their notable contributions.

In 2023, office absorption in the top seven cities stood at

41.97 million Sq. ft. and Gross Leasing Volume is at

62.98 million sq. ft.

Our company has strategically invested in the construction of a top-tier commercial tower in the central business district of Bangalore. Our aim is to create an iconic office building that will be leased to prominent global multinational corporations (MNCs) and other esteemed clients, further enhancing our presence in the market. Our other projects are committed to offering exceptional office spaces and amenities to renowned corporations globally, including those in India.

As a city, Bangalore continues to be a prominent technology hub and amplifies attracting the desired customer base. Furthermore, the increasing significance of technology in the global economy and booming of Global Capability Center (GCC) sector in India caters to the growth of commercial real estate sector.

Our projects objective is to provide a premium product and a comprehensive business ecosystem in a prime location within Bangalores central business district (CBD). This guarantees sustained demand and reinforces the resilience of our project.

3. MARKET OUTLOOK:

The estimated size of the India Commercial Real Estate Market is USD 40.71 billion in 2024, projected to reach USD 106.05 billion by 2029, with a compound annual growth rate (CAGR) of 21.10% during the forecast period (2024-2029).

The advent of the COVID-19 pandemic introduced the work-from-home (WFH) culture, causing a temporary impact on new space obligations. In 2022, new office space in the seven major cities of India (Mumbai, Delhi NCR, Bengaluru Hyderabad, Chennai, Kolkata, and Pune) amounted to 38.25 million sq. ft, a 30% decline from the previous year.

The demand for office space is driven by flexibility, comfort, and convenience across various industries, leading to an increased need for office spaces. Technological advancements, including artificial intelligence, virtual reality, and data analytics, have elevated commercial real estate by enabling virtual property tours, improved customer relationship management, online transactions, and enhanced communication between sellers and buyers.

Colliers Indias research indicates a 49% increase in office space supply to 32.8 million sq. ft from January to September in six major cities. This surge is attributed to completing numerous commercial developments to meet growing demand, compared to 22 million sq. ft in the same period the previous year.

4. OPPORTUNITIES:

Commercial real estate is a rapidly growing industry in India backed by a plethora of reasons. With the shift in office trends post the pandemic era, most offices are now encouraging their employees to return back to office in a hybrid or a work from office model.

As the economic landscape continues to evolve, Bangalore stands out as a thriving hub basis below mentioned reasons:

• Global connectivity

• Thriving start-up ecosystem

• Infrastructure Development

Bangalores cosmopolitan culture, pleasant climate, and quality of life make it an attractive destination for professionals and businesses. The citys appeal goes beyond business, contributing to the overall demand for commercial spaces. Commercial property investment allows you to align with the lifestyle preferences of businesses and professionals seeking a vibrant and dynamic work environment.

5. THREATS/ CHALLENGES:

Unfavorable changes in government policies and the regulatory environment can adversely impact the performance of the sector. Retrospective policy changes and regulatory bottlenecks may impact profitability and affect the attractiveness of the sector and companies operating within the sector.

The sector can be impacted by delays in multiple approval processes which need to be undertaken for every project.

6. SEGMENT WISE PERFORMANCE AND

FINANCIAL	PERFORMANCE		WITH
RESPECT	TO	OPERATIONAL

PERFORMANCE :

• Factors used to identify the entitys reportable segments, including the basis of organisation:

The Company has diversified into electricity generation through Wind Turbine Generators (WTG) for captive consumption and sale of electricity to the GESCOM, HESCOM & Group Cative., and third-party consumers. Further, the Company has earnings on investments.

• Booming Tech Insdustry For management purposes, the Company has multiple reportable segments namely: Development of Real Estate , Windmill, Rental Income and others.

Financial performance of the Company is as under:

PARTICULARS	Financial Year ended 31-03-2024	Financial Year ended 31-03-2023
Segmentwise Turnover/Revenue
a) Sale of Electricity	112.11	108.27
b) Office Rentals	1.72	3.62
c) Others	405.79	1014.56
Total Revenue	519.62	1126.45
Profit/( Loss ) before Depreciation ,Finance Cost & Tax	316.97	997.10
Less Depreciation	19.44	19.13
Less Finance Cost	729.27	325.30
Profit/( Loss ) before tax	(431.74)	652.67
Profit/( Loss ) for the year	(405.37)	589.75
Total Comprehensive Income	(401.84)	588.52
Earning Per Share - basic & Diluted- Rs	(30.94)	45.02

• Geographical Information

The geographic information analyses the Companys revenue and Non-Current Assets by the Companys country of domicile and other countries. As the Company is engaged in Development of Real Estate property in India, Windmill and Rental income, it has only multiple reportable geographical segment.

• Information about major customers

Business segment	Customer
Windmill	Vikas Telecom Pvt. ltd.

Apart from above no other customers constituted 10% or more of the total revenue of the Company for the years ended March 31, 2024 and March 31, 2023.

7. RISKS AND CONCERNS:

Industry Risk:

The real estate sector in India is heavily regulated by the central, state and local governments. Real estate developers are required to comply with a number of laws and regulations, including policies and procedures established and implemented by local authorities in relation to land acquisition, transfer of property, registration and use of land. These laws often vary from state to state.

General Economic Conditions:

The Real Estate and Construction Industry is prone to impact due to fluctuations in the economy caused by changes in global and domestic economies, changes in local market conditions, competition in the industry, government policies and regulations, fluctuations in interest rates and foreign exchange rates and other social factors.

Socio-Political Risks:

In addition to economic risks, your Company faces risks from the socio-political environment, internationally as well as within the country and is affected by events like

political instability, connect between nations, threat of terrorist activities, occurrence of infectious diseases, extreme weather conditions and natural calamities, etc., which may affect the demand and supply activity.

Company Specific Risks:

The Company specific risks remain by and large the same as mentioned hereinabove. Further, it cannot have effective marketing leverages. The industry in general has a high operating leverage.

8. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Internal information systems ensure smooth information to facilitate proper control. Adherence to the systems is then validated through the process of internal audit. The Company has adequate system of internal audit control to ensure that all the assets are safeguarded and protected. Regular internal audits are conducted by the professional Chartered Accountant firm and reports submitted by these Internal Auditors are periodically reviewed by the Audit Committee of the Board. The findings and compliance/s are reported to the apex level management on a periodic basis. The Company has constituted an in-house Committee for timely

implementation of internal audit recommendations. The Company has clear systematic process and well-defined roles and responsibilities for people at different hierarchical levels. This ensures appropriate information on to facilitate monitoring.

9. DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

As reported last year, the Company is operating with 34 employees in various roles post closure of its Hotel operations in October 2019.

The Company believes that the quality of the employees is the key to its success in the long run and is committed to provide necessary human resource development and training opportunities to equip them with skills, enabling them to keep pace with ongoing technological advancements and evolve. Employees are provided opportunity to grow and prosper. In the meantime, all efforts are being made to control cost to maintain present level of profitability.

10. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

The details of significant changes (i.e. change of 25 % or more as compared to the immediately previous financial year) in key financial ratios, alongwith the explanation, are furnished as under:

Sl.No	Particulars of ratio	Ratio for the FY 2023-24	Ratio for the FY 2022-23	Extent of change over the previous year in %	Explanation for significant change (more than 25 %)
1	Debtors turnover	6.95	7.42	(6%)	-
2	Inventory turnover	-	-	-	-
3	Interest coverage	0.43	3.07	(86%)	Basis change in debentures issued during the year
4	Current ratio	22.53	24.27	(7)%	-
5	Debt Equity	1.90	1.11	71%	Basis change in debentures issued during the year
6	Operating profit Margin (%)	-78%	-16%	(400%)	Basis change in profit
7	Net profit margin (%)	-78%	52%	(249%)	Basis change in profit

Change in Return on Net Worth

Return on net worth during the financial year 2023-24 is INR 4337.42 Million as compared to financial year 202223 INR 4739.26 Million.

8. DISCLOSURE OF ACCOUNTING TREATMENT:

The Company has followed all relevant Accounting Standards while preparing the Financial Statements.

9. CAUTIONARY STATEMENT:

The views and futuristic statements contained in this report are the perception of management and subject to certain risks and uncertainty that could cause actual results to differ materially from those such statements. Readers should carefully review the other information in this Annual Report and in the Companys periodic reports. The Company undertakes no obligation to publicly update or revise any of these futuristic statements, whether because of latest information, future events, or otherwise.