Milestone Global Ltd Management Discussions.

The Management of Milestone Global Limited is pleased to present the following Management Discussion and Analysis Report which contains a brief write-up on the industry structure, opportunities and concerns, performance of the Company with respect to the operations other information. This chapter on Management Discussion and Analysis forms a part of the compliance report on Corporate Governance

Indian Economy and Industry Overview

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

Indias gross domestic product (GDP) (at constant 2011-12 prices) was estimated to be Rs 145.65 lakh crore (US$ 2.06 trillion) for 2019-20, growing 4.2 per cent over the previous year. Indias GDP is expected to reach US$ 5 trillion by FY25 and achieve upper-middle income status on the back of digitization, globalization, favorable demographics, and reforms.

The growth in exports of natural stones from India including granite slowed down in India in 2019 due of lack of policy support from state governments, according to Industry players.

The company has entered a new industry, localization and translation services.

Granite Industry- Structure and Developments

Granite is being preferred over other stones due to its resistance to wear and tear as well as weathering which makes granite ever-lasting stone. India has one of the best granite deposits in the world having vast varieties comprising over 200 shades. India accounts for over 20% of the world resources in granite.

Granite reserves in India have now been estimated by Indian Bureau of Mines at over 42,916 million cubic meters. Splendid black and multi-colour varieties of granite are available in the states of Karnataka, Andhra Pradesh, Tamil Nadu and Uttar Pradesh. Granite deposits are also widespread over provinces of Rajasthan, Bihar, West Bengal and Gujarat.

India continues to be one of the leading countries in the production and export of granite and other stones. Granite is a very hard crystalline, igneous or metamorphic rock primarily composed of feldspar, quartz and lesser amounts of dark minerals. India has vast resources of granite with about 125 varieties of different colors and textures such as black, grey, pink, multi colored etc. These varieties are used to produce monuments, building slabs, titles, surface plates etc. About 125 varieties of granites have been identified for processing as products for exports. The deposits are widely spread over the entire country. However, popular varieties are mainly found in South India.

Granite is a non-scheduled industry and hence entrepreneurs are only required to submit Industrial Entrepreneur Memorandum. Looking at its export potential, Government of India has been encouraged setting up of 100% Export Oriented Units in this sector to promote export of value-added granite products. Export of Granite and Marble is freely allowed. Granite is exported mainly to Japan, USA, UK, Germany, Netherlands, Italy, West Asia and Australia.

By general consensus, India and Brazil have been blessed by nature with the widest variety of the most beautiful granites. Yet, when it comes to processing facilities, their development has been way below the potential. The volatile nature of the Brazilian economy with lot of uncertainty over the last decade, has discouraged investment. The market share of China in the international trade in granite has been steadily increasing in recent years. Only China remains a threat to other countries in the manufacture and export of granite.

Problems Related To Granite Mining Industry


The main problem of Granite Mining Industry in India is the low productivity and high wastage. The granite mining industry in India is far behind in terms of productivity compared to countries like Italy, Brazil, Spain, Norway, South Africa etc .The low productivity is mainly due to conventional methods of mining adopted at present. The industry is slow in adopting the use of wire saws and slot drilling instead of conventional blasting burner.


The main obstacle for modernizing the quarry is high capital investments in modern mining equipment. Quarries are always under threat of closure due to license and environment issues, making it difficult for them to have long term vision. Investment in mining equipment can take several years to recover, stability and guarantee of continuity of operations is required to make these investments


The low productivity per worker and less man-hour utilization is another problem for the granite quarrying in India. The lack of exposure to modern quarrying and training for the Indian workers is a major reason for the low productivity of the workers. It is high time that Government and the industry should work together to establish a Training Institute to educate and train the work force, which will help the mining industry to a great extent.


The future of the granite mining industry depends on the immediate attention of both the Union and State Governments to the problems of the industry. The foremost step should to be declaring granite as a major mineral and granite mining as an Industry. Since the granite industry is one of the important sources of foreign exchange earnings, it is high time the Government of India steps in to encourage the granite mining industry.


The Government should announce a long-term mining policy and stop frequent changes of leasing policies as adopted by various state Governments. Granite mining is a high-risk area where there is no guarantee on return on investment. The mining of a natural product requires a long period of time to develop the land and infrastructure and high investment for economical operations. Hence the leases of quarry lands should be on long-term basis of minimum of 30 years as in other countries like Spain etc. where it is normally ranging from 30 to 90 years, or in Brazil, where policies are even more liberal. It is impossible for anyone to invest in machines and modernize the quarry in the absence of long time leasing.


As per the geological survey, India has a vast area of abundant granite deposits of various colours that are still to be explored. The government should encourage entrepreneurs to explore the new areas on recommendations as stated above. Every effort should be taken by both the government and the granite industry to improve the countrys share in the world market by exploring new areas.

The government should also guarantee free trading without imposing any restrictions on exports of blocks.


The procedures of lease agreements, permits for movement of blocks, payments of royalty etc, must be simplified. Most of the times the dispatches are held up due to delay in getting the permits and particularly during holidays, strike etc. Since highly valuable goods are presently allowed on self-removal scheme, the granite blocks can also be allowed under the same scheme in place of the present permit system. This will avoid eliminating delays in dispatching blocks and meeting the delivery schedules of the buyers.

Problems Related To Granite Processing Industries


The existing infrastructure to meet the needs of the stone sector in India is extremely poor and inadequate for the growing demand. The infrastructure facilities like road, rails, electricity services, water sources need to be improved.

The movement of either the blocks from the quarries or the containers from the factories to the ports is always cumbersome. Quarry access roads are still not developed which restricts the sizes and the movements of the blocks. Even the highways are not sufficient for easy movement of trucks.

The infrastructure is the backbone for any industry to operate economically and compete in the world market. Unless proper facilities are created for smooth traffic and movement of materials, further development will not be possible


The major problem highlighted by the processing industries is the non-availability of best quality blocks for the processing. As exporting of blocks is more advantageous due to high value realization, the processing companies are finding it difficult to buy certain colour granite blocks as per their requirement. The first quality blocks, which are free from defects and larger in size, are always given preference for exports. Hence the local processing factories have to depend on smaller size blocks, which resulted in high processing wastage, higher production cost and thereby, high selling price. This is one of the reasons for the less competitiveness of finished products in the world market. It must be the aim for both government and the industry to expand the processing capacity of the country to get more value addition.


The consistent modernization of the factory and upgrading of the processing technology by installing new machines will improve the productivity and reduce production cost.

For example, the use of diamond polishing abrasives replacing conventional abrasives will increase the belt speed of the line-polishing machine thus giving more production and higher polishing capacity with the same machine. Periodical maintenance of the machines is a must for the consistent quality and less downtime. This will reduce the raw material cost considerably as defective slabs and unwanted bushes of the blocks are eliminated at the quarry site.

Rising production cost and decline in the dollar rates have seriously affected the export realizations and had a drastic impact on the profits of the Company. Economic slowdown in the US and cry by environmentalists to prevent damage on account of excess quarrying are other major threats to the granite industry The major threat areas include:

1. The Economic slowdown in major countries.

2. Non-Availability of best quality blocks for processing.

3. Frequent power disruptions and high dependency on diesel affecting the production and the cost of raw materials and finished goods.

4. Lack of Proper infrastructure.

Prospects For The Granite Industry

In USA, Europe and Australia, consistent quality control, and prompt deliveries to the buyers are very important to procure more orders and stay in business, new products with new design should be developed by constant up gradation of existing technology to sustain growth.

One of the most positive developments for the granite industry is the greater awareness of it among the architects, and its growing popularity in major projects. Whether it be office buildings, airports, commercial centers or even hotels, granites is becoming more and more popular for the big projects all over the world. The following factors are motivating the growth of granite industry

1. Introduction of Stones for new applications and utilities etc.

2. Spurt in demand for Indian Granites Worldwide.

3. Increased domestic demand.

Technologies advances and market competition has changed the basis feature of the industry the margins it works with. While granite has an image of a luxury product, in the production side, the processing industry has changed from being a low volume high margin one to a low margin high volume business.

? The future for the granite industry for both blocks and finished products is encouraging. India can improve its export performance as the processing capacity is very low, with less than 5% of gangsaws installed in the world. The increase in export of blocks and finished products during the last year is an indication of the encouraging signs of market improvement. In spite of so many problems, the demand for granite products is increasing everywhere with consistent growth rate of consumption.

? India, which is blessed with various types of unique colours and large deposits of granite, is certain to get its due share in the ever-growing world market. Many countries are worried about the strong entrance of China in the market but the fact is that China landed up importing more rough blocks and finished products due to high domestic demand.

? The worldwide improvement of transportation system with more and more bulk vessels will also help many countries to import more thereby boosting our exports.

Localization Industry- Structure And Developments

Translation and localization is a worldwide industry with an estimated industry size of USD 57 Billion. The CAGR of the industry is estimated at 6.2%, making the five year projection of the market USD 77 Billion in 2025. The language industry in scattered around the world and no single firm has a market share larger than 2%. The top 100 companies concentrate only 14.5% of industry revenue. This is due to low barriers of entry and relatively easy access to latest technology.

The localization industry provides language services such as translation, interpretation, subtitling and transcription. Due to globalization of trade and services, clients and suppliers can be found everywhere in the world. The largest number of localization companies are in Europe, followed by North America.

The main client industries for localization services include life science, media and entertainment, manufacturing, legal and IT. The major drivers for growth in this industry are OTT platforms, game localization, pharma, eLearning and patents.

The Indian localization industry is still in its nascent stages, constituting less than 0.25% of the worldwide industry. Several of the top 10 localization companies have established development and back offices in India in the last decade.

The demand for regional language content has been growing in India as smartphone penetration in Tier 2 and Tier 3 cities rises. It is estimated, that by 2022, there will be more Hindi users than English on the Indian internet. Marathi, Bengali and Telugu are the fastest growing languages on the Indian internet.

In India, the largest demand for language services is coming from OTT platforms, eLearning companies, medical device manufacturers and microfinance and insurance companies.

The average salaries in India are much lower than salaries in the Western world, making it an attractive and competitive destination for production, sourcing and R&D. Bangalore and Pune are already growing hubs for the localization industry.

The coronavirus has stifled global growth and international movement of people, good and services. This will have a strong short term effect on the language industry. There will be long term changes in the industry also as consumer demand, travel and trade recover.

Challenges For The Localization Industry


The threat of machine translation becoming mainstream has been around for more than a decade. MT engines still have a long way to go and it still seems like it will take several years before their accuracy can be compared to human translation. However, a major breakthrough can happen at any time, speeding up the development of the technology. Machine translation, interpretation and transcription technology is a looming threat to the language industry.


There are low barriers to entry to set up a localization operation. There is no large upfront investment in technology, land or people required to start a language company. This makes the market extremely competitive and price sensitive.


The supply chains of the industry are spread out worldwide. Translators and clients in every country in the world. Changes in exchange rate of any major currency affects the revenue and costs of the company. Long payment cycles mean that there can be a big gap in projected costs and actual costs.


The pandemic, trade wars and sanctions threaten to slowdown the demand for language services. The localization industrys growth is dependent on international movement of people, goods and services. The pandemic has almost put a halt to the global movement of people. There has also been a large contraction in global trade as consumer demand and supply chains are hit.

Opportunities For The Indian Localization Industry


As smartphone and internet penetration grows outside the major cities, the demand for services and content in regional languages grows. There will be majority Hindi speaking internet users in India by 2022. The other growing languages on the Indian internet are Marathi, Bengali, Telugu, Tamil and Kannada. Brands are increasingly translating their apps, websites, marketing material and legal documents in regional languages.


These three industries have seem massive growth in the last decade. In 2020, these industries have seen more growth than in any quarter in the last 4 years. There is a huge demand for language services like transcription, subtitling and voiceover in regional and international languages from these sectors


As populations around the world get older, the demand for healthcare and related services grows. Lifesciences is the single largest (and most profitable) client domain for language service companies. There is a growing demand for translation services for patents, medical devices, clinical trials and research papers. As medical tourism grows in India, there is demand for medical interpretation services


Machine translation technology is both an opportunity and a threat for the industry. As the technology improves, language companies can offer new services such as machine translation post editing and machine transcription. New developments in marketplaces and project management tools lower production costs. Several new cloud based project management tools make it possible for remote teams to collaborate easily while maintaining data security.

? 5G

The predicted speed of 5G is hyped to be a game changer for several internet industries. There is expected to be increased volumes for media and game localization. Remote interpretation will become more efficient and replace in-person interpretation in several cases. There is also expected to be increased demand for translation of material for the new technologies that will be built for 5G

Internal Control Systems And Their Adequacy

The Company has adequate system of internal control relating to the purchase of raw materials, Stores, Consumables and Packing Materials, and for the sale of goods commensurate with the size of the Company and the nature of business.

The system of internal control of the Company is adequate keeping in mind the size and complexity of your

Companys business. Systems are regularly reviewed to ensure effectiveness.

The Audit Committee of the Company meets periodically to review and recommend quarterly, half yearly and annual financial statements of the Company.

Discussion On Financial Performance With Respect To Operational Performance

The Turnover achieved by the Company for the year ended 31.03.2020 is Rs 1200.97 Lakhs as compared to the Previous Year turnover of Rs 1137.10 Lakhs showing increase by Rs. 63.87 Lakhs. The Company has earned a net profit of Rs. 12.12 lakhs as against profit of Rs. 11.2 lakhs in the previous year showing an increase by Rs. 0.92 lakhs.

Impact of COVID-19

The World Health Organization declared a global pandemic of the Novel Coronavirus disease (COVID-19) in February, 2020. To prevent the rapid rise of infection, government of almost all countries severely restricted travel, mandated extreme social distancing measures and reduced demand supply chains to only those that are essential. In responding to this crisis, our primary objective is to ensure the safety of our employees, to deliver our client commitments and put in place mechanism to protect the financial well-being of the Company and protect its long term prospects.

Only critical staff (who can travel to workplace without any hassle) are reporting to work at the office and necessary arrangements have been made by the Company to ensure that these staff are safe and comfortable at work. The other office staff is working from home.

There has been loss of production and the Company is still grappling with the shortage of labourers, as there is only 50% labour turnout. Almost 50% of the Orders have been cancelled so far since the lockdown was announced and the Company is not expected to meet the same number of orders in financial year 2020-2021 as compared to last year. The loss of production is not expected to be made up by the end of this financial year.

The Company did not receive any electricity waiver as promised during lockdown and is bearing 100% cost for it. The marketing strategy of the Company is also getting adversely affected due to restriction on the smooth movement of people from one place to another.

There have been some impact on Raw Material availability, logistics and other items of supply chain but it is expected to normalize soon.

As far as liquidity position of the Company is concerned, the Company has been sanctioned a 10% extra moratorium on packing credit of Rs. 145 lakhs i.e. Rs. 14.5 lacs, of which the Company has so far utilized approx. Rs. 9 lakhs. However, as the duration and impact of COVID-19 is uncertain, it is not possible to ascertain its full impact on the liquidity position, as well as other business impacts, in future.

Human Resources / Industrial Relations

Save as situation explained at Board Report, the overall relation with employees has cordial. The management has been striving to maintain the harmonious relations.

Cautionary Statement

Statement in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable securities laws and regulations.

As forward-looking statements are based on certain assumptions and expectations of future events over which the Company exercises no control, the Company cannot guarantee their accuracy nor can it warrant that the same will be realized by the Company. Actual results could differ materially from those expressed or implied, significant factors that could make a difference to, the Companys operations include domestic and international economic conditions affecting demand, supply and price conditions in the industry the Company into, changes in government regulations, tax regimes and other statutes.

Details of Significant Changes in Key Financial

Ratios (change of 25% or more as compared to the immediately preceding financial year) along with detailed explanation: There has been no change in the key financial ratios beyond 25%.