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 economy is expected to have grown at 9.2 per cent in the fiscal ended March 2022, after having contracted by 7.3 per cent in the previous financial year. Indias economy is poised to recover in FY22 after contracting by 7.3 per cent in FY21.

However, there are downside risks emanating from the Russia-Ukraine conflict, soaring of commodity prices and acceleration in global inflation going ahead.

As per governments advance estimates, the gross domestic product (GDP) in FY22 is projected to grow by 8.9 per cent. The main factors contributing to this kind of growth are -- resilience shown by the rural sector with normal monsoon and higher production of foodgrains; uptick in bank credit growth to push financial services and improvement in services sector. Higher GST collections have also provided much needed support.

The International Monetary Fund (IMF) expects Indias economy to grow by 9 per cent in FY22, while Asian Development Bank (ADB) has projected Indias growth at 7.5 per cent. The overall impact of Omicron variant which resulted in the 3rd wave of COVID-19 seems to be relatively muted than was initially anticipated. Further, rapid pick up in the pace of vaccination programme is also expected to support growth.

Granite exports are finding their feet back. Though the GOI again announce a 3-week lockdown in May 2021, the production was hit but not as much as last year. The production bounced back as soon as the lockdown was lifted. In the subsequent months, the Company could also compensate for the lost production. However, due to the Ukraine crisis, the company feels great inflationary pressures from, raw materials’ cost, transportation, labour cost and cost of imported stone, and consumables. However, the recession in the international market as predicted, could also lead to loss of production in the coming months and next year also.

The Company had entered a new industry in the year 2020, namely localization and translation services. The Indian translation industry is young and evolving as compared to the translation industry in developed nations which have organised workflows in place. However, it was felt that this is a very promising space and hence this business was introduced in the Company, as a new line of business activity.

Sadly, this new business activity did not have much synergy with the existing line of granite business. The other issues with the new business were its heavy dependence on few key clients, short term high value projects and other operational risks. Therefore, the Company sold off the new business activity of localization and translation services to a private company by the name of Milestone Localization Private

Limited ("Buyer"), at a valuation of Rs 36.76 lakhs, as computed by the Registered Valuer duly appointed for the said purpose. The Company entered into a Business Transfer Agreement dated 17th January, 2022 with the said Buyer whereby the Buyer agreed to buy the business of providing Translation and Localization services as going concern basis.

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.

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. 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.

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 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 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 where it is normally ranging from 30 to 90 years. 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 country’s 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.

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. 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.

The major threat areas include:

1. Container shortage and global shipping crisis

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 roper infrastructure.

Prospects For The Granite Industry

In North America and Europe 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.

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 8% 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.

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 Company’s 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 31.03.2022 is Rs 1,801.65 Lakhs as compared to the Previous Year turnover of Rs 1,303.56 Lakhs showing increase by Rs. 498.09 Lakhs. The Company has earned a net profit of Rs. 66.77 lakhs as against profit of Rs. 0.33 lakhs in the previous year showing an increase by Rs. 66.44 lakhs.

Impact of COVID-19

The World Health Organization had 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 May 2021, the GOI announced a 3-week lockdown, wherein no operations were allowed. The production was hit but not as much as last year. As the threat perception was reduced as compared to the year before, the labour came back to work in full force once the lockdown was lifted.

The production bounced back as soon as the lockdown was lifted. In the subsequent months, the Company not only compensated for the lost production but was able to increase the turnover by 38.21% over the previous financial year.

The shipping container shortage still looms with almost no let up. It is expected to ease only, if at all, in the next year. This problem has compounded due to the Ukraine crisis.

Due to the Ukraine crisis, the company feels great inflationary pressures from, raw materials’ cost, transportation, labour cost and cost of imported stone, and consumables.

We are only able to pass on some of these costs to the customers, we are hoping and praying for a speedy resolution of the Ukraine crisis, so that all costs can come down to manageable limits

Human Resources / Industrial Relations

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

Cautionary Statement

Statement in the Management Discussion and Analysis describing the Company’s 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 Company’s 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

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios.

The Company has identified the following ratios as key financial ratios:

Particulars 2021-2022 2020-2021 Reason for change where change is more than 25%
Current Ratio 4.98 times 1.98 times During the year the company has discontinued its cash credit facility and repaid total amount of cash credit borrowing and therefore current ratio improved.
Debt equity ratio 0.84% 37.66% During the year the company has discontinued its cash credit facility and repaid total amount of cash credit borrowing
Debt Service Coverage Ratio 7.28 times 2.16 times During the year the company has discontinued its cash credit facility and repaid total amount of cash credit borrowing. The finance cost has been decreased and therefore there is a variance
Return on Equity Ratio 8.48% 0.04% During the year the company has discontinued its cash credit facility and repaid total amount of cash credit borrowing. The finance cost has been decreased. Further during the year, the company has also earned profit from sale of services.
Inventory Turnover Ratio 9.52 % 22.05 % The company has sold its old inventories during the year
Trade Payable Turnover Ratio 2.64-month purchase 1.35 Month Purchase Purchase and Turnover increase therefore there is variance
Net capital turnover ratio 0.61 0.30 The company has not utilized during the year any working capital facilities from bank and therefore there is variance in ratio.
Net Profit Ratio 3.71% 0.02% The company has used its internal cash accrual and has not utilized any cash credit limit /working capital facilities from bank during the year. Therefore, finance cost decreased and net profit ratio increased. Further company has earned higher net profit from sale of services.
Return on capital employed 10.41 % 4.25% The company has used its internal cash flow and has not utilized any cash credit limit /working capital facilities from bank during the year. Therefore, finance cost decreased and return on capital increased. Further during the year, the company has also earned profit from sale of services during the year.