Saffron Industries Ltd Management Discussions

Managements discussion and analysis of the financial condition and results of operations include forward-looking statements based on certain assumptions and expectations of future events. The Company cannot assure that these assumptions and expectations are accurate. Although the Management has considered future risks as part of the discussions, future uncertainties are not limited to Management perceptions.

The outlook for Indias real estate sector is positive and set for significant growth, driven by rapid urbanization, infrastructure development, favourable government policies, and evolving consumer preferences. The sector is experiencing a surge in residential demand, a rebound in office leasing, and expansion in retail and industrial segments. Emerging asset classes like data centres and co-living spaces, along with increased integration of PropTech and a focus on green buildings, are also shaping the market, creating new opportunities and investment potential.

The Nagpur (where the registered office of the Company is situated) real estate sector shows a strong positive outlook, driven by significant infrastructure development like the MIHAN project and the Mumbai-Nagpur Expressway (Samruddhi Mahamarg). A growing economy and job market, particularly in IT, manufacturing, and logistics, are attracting professionals, increasing demand for both residential and commercial properties. The market is also evolving with trends toward modern apartments, green buildings, and gated communities, alongside continued interest in plotted developments in peripheral areas for long-term appreciation.

Indias real estate sector is undergoing rapid transformation and growth, driven by urbanization, rising income levels, and supportive government policies like RERA, which have improved transparency and trust. Key developments include market consolidation, the rise of premium and luxury housing, significant growth in commercial segments like offices and warehousing due to the IT boom and e-commerce, and increasing demand for sustainable and tech-enabled properties. The sector is becoming more organized, attracting significant FDI, and its contribution to Indias GDP is projected to rise substantially, supported by strong infrastructure investment and robust demand across residential, commercial, and industrial segments.

The availability of land and commercial properties near highways makes Nagpur an attractive choice for logistics, manufacturing, and other industrial investments, boosting demand for industrial and logistics parks.

The Multimodal International Hub Airport at Nagpur (MIHAN) is a major economic zone housing IT parks, manufacturing, and logistics, significantly driving the need for residential and commercial spaces in the vicinity.

City offers diverse residential options, from affordable flats to high-end villas, with strong demand for multi-storey apartments and plotted developments, particularly in South Nagpur. The commercial real estate market is flourishing, with strong demand for office complexes, IT parks, and retail spaces, especially in areas like Sadar, Dharampeth, and Civil Lines. Key infrastructure projects, such as the Mumbai-Nagpur Expressway and the Nagpur Metro, have enhanced connectivity and boosted land prices, transforming Nagpur into a vibrant urban centre and a prime investment hub.

Risks in the cost of raw materials, environmental liabilities, tax laws, labour relations, litigation, and significant changes in the global political and economic environment exert tremendous influence on the performance of the company. The Company has laid down procedures to inform Board Members about the risk assessment and minimization procedures.

The company holds the belief that its employees form the foundation of its operations. The cultivation of a harmonious and secure work environment, coupled with the provision of due recognition and rewards, consistent communication, a steadfast commitment to addressing customer needs, and the implementation of change management through training stand as the cornerstones of the companys human resources development. Every member of the staff is cognizant of the challenges presented by the existing economic landscape.

Notably, employee morale has remained robust even in trying circumstances. The staff has wholeheartedly collaborated with the management in effecting the necessary changes dictated by the market. This approach affords every employee the opportunity to harness their full potential and advance within the organization. There was no strike or labour unrest during the last financial year.

There are 8 employees in the company as on 31^st March, 2025.

Every successful company needs to have certain controls in place to function effectively. Saffron Industries Limited as well has sufficient internal controls in accordance with the nature and magnanimity of its business.

These have been designed to ensure that:

> Assets of the Company are acquired in an economical manner and safeguards are in place for their upkeep and to ensure their protection against any damage or destruction.

> Controls relating to the financial and operational aspects of the business remain in place and are working satisfactorily to detect exceptions and raise alerts.

> The Company enforces stringent compliance with all applicable laws and internal policies.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements to strengthen the same. The Board of Directors has framed a policy which ensures the orderly and efficient conduct of its business, safeguarding of its assets, to provide greater assurance regarding the prevention and detection of frauds and accuracy and completeness of the accounting records of the company.

Further, your company has adequate internal financial controls with reference to its financial statements.

> Inventory turnover

Inventory turnover decreased to 1.30 from 5.80 due to decrease in turnover and decrease in stock in the current year

> Interest coverage ratio

There was no finance cost in the period under review.

> Current ratio

Current ratio increased to 0.89 from 0.87 due to decrease in current assets.

> Debt equity ratio - Nil

> Net profit ratio (%)

Net profit ratio for the financial year is 0.44.

> Return on net-worth - Nil

> Return on capital Employed-

Return on capital employed for the financial year is 1.35.

> Trade Receivable Turnover Ratio

Trade Receivable Turnover Ratio for the financial year is 73.17.

> Trade Payable Turnover Ratio

Trade Payable Turnover Ratio decreased to 3.73 from 9.23.

Certain Statements in the "Management Discussion and Analysis" describing the Companys objectives, expectations or predictions may be "forward-looking statements" within the meaning of applicable laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied due to various risks & uncertainties. Important factors that could make a difference to the Companys operations include changes in Govt. regulations, tax regimes, economic developments and other factors such as litigation. The company does not undertake to update these statements.