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.

Indian Economy is expected to expand 8.3 percent in fiscal year 2021-22 as per a report by the World Bank.

Indias gross domestic product (GDP) shrank 7.3% to !135.13 trillion in 2020-21 (in real terms adjusted for inflation). This is nevertheless a marginal improvement from the earlier estimate of 8 per cent contraction in the second advance estimates released in February, largely because of a sharp rise in government expenditure.. GDP growth in 2019-20, prior to the COVID-19 pandemic, was 4%.

Granite exports are finding their feet back after being in doldrums last year due to the coronavirus restrictions. Demand is up from most of the major markets. We expect demand to grow and exceed pre-covid levels in the next financial year.

The biggest challenge we are currently facing is the non-availability of shipping containers and the ongoing international shipping crisis. Container prices are 3-4x of normal rates. There are long delays at every port. We expect this to remain a challenge till mid 2022.

The company has entered a new industry last year, 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. Besides, India is a country of 22 official languages and many dialects.

Due to the strong economic growth and increasing business opportunities, companies seeking to operate in India need to understand its languages for translation and localization purposes. This is a promising space. As more Indians get access to internet and smartphones, the need for content in regional languages increases.

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 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.

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.

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, video 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.

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


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.

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 31.03.2021 is Rs 1303.56 Lakhs as compared to the Previous Year turnover of Rs 1200.97 Lakhs showing increase by Rs. 102.59 Lakhs. The Company has earned a net profit of Rs. 0.33 lakhs as against profit of Rs. 12.12 lakhs in the previous year showing a decrease by Rs. 11.79 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.

The second wave in 2021 has again heavily impacted operations at the factory. We were closed for a period of 5 weeks. No containers were produced or exported during this period. This will have a severe impact on our costs. However, the loss of production is expected to be covered by the end of this financial year if there are no lockdowns or restrictions in the future.

The biggest impact of the Covid crisis is the shortage of shipping containers and absurd rise in cost of international shipping. We are paying 3x-4x for our containers. Getting a container remains a challenge and delivery times are at least 1.5x longer and highly unpredictable.

We are only able to pass on a part of the shipping costs to our customers. We expect the shipping crisis to have an effect on profitability and cash flow.

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 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

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:

Inventory Turnover Ratio

Particulars 2020-2021 2019-2020
Inventory 1,12,50,000 2,06,43,000
Turnover (Revenue from operation) 13,03,55,565.9 12,00,97,436
Ratio 8.63 17.189

Difference in ratio from previous year is (49.79%)

Net Profit Margin
Particulars 2020-2021 2019-2020
Profit after tax 32,923 12,11,908
Turnover (Revenue from operation) 13,03,55,565.9 12,00,97,436
Ratio 0.025 1.009

Difference in ratio from previous year is (97.50%)

Debtor Turnover Ratio
Particulars 2020-2021 2019-2020
Debtors 3,08,68,234 1,76,84,836
Turnover (Revenue from operation) 13,03,55,565.9 12,00,97,436
Ratio 23.680 14.725

Difference in ratio from previous year is (60.81%)