Shri Krishna Devcon Ltd Management Discussions.

Economy Scenario:

COVID-19 has triggered the deepest global recession in decades, has delivered an enormous global shock, leading to steep recessions in many countries. While the ultimate outcome is still uncertain, the pandemic will result in contractions across the vast majority of emerging market and developing economies. It will also do lasting damage to labor productivity and potential output. The immediate policy priorities are to alleviate the human costs and attenuate the near-term economic losses. Once the crisis abates, it will be necessary to reaffirm a credible commitment to sustainable policies and undertake the reforms necessary to buttress long-term prospects. Global coordination and cooperation will be critical. The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020 the deepest global recession in decades. Per capita incomes in most emerging and developing economies will shrink this year. The pandemic highlights the urgent need for policy action to cushion its consequences, protect vulnerable populations, and improve countries capacity to cope with similar future events. It is also critical to address the challenges posed by informality and limited safety nets and undertake reforms that enable strong and sustainable growth. (source: https://www.worldbank.org)

Industry Structure and Development:

While the adverse effects of the pandemic is already being felt across the world, varying opinions are emerging with regards to Covid-19s impact on real estate, a health emergency that has force launched the biggest ever work from home experiment globally, putting a question mark on the relevance of workspaces in a post-Coronavirus world. Amid countries applying extreme measures to contain the Coronavirus outbreak, businesses have come to a grinding halt across the world, forcing monetary agencies to slash growth forecasts for the global economy, India included. Projections by the International Monetary Fund (IMF) say India is headed towards historic contraction of 4.5% in FY21 as severe fallout of the pandemic. (source: https://housing.com) While the adverse effects of the pandemic is already being felt across the world, varying opinions are emerging on COVID-19s impact on real estate, a health emergency that has force-launched the biggest ever work-from-home experiment globally, putting a question mark on the relevance of workspaces in a post-Coronavirus world. India, where the economic growth is already set to slow down to a record 11-year-low, a prolonged lockdown which started from March 25, 2020 and was eventually extended till June 7, 2020, amid a dramatic rise in the number of infections worsened the situation in Asias third-largest economy. As on June 27, over 5 lakh Coronavirus infections were reported in India. (source: https://housing.com) As is evident, research agencies are predicting a near-term halt in growth of real estate in India.

PropTiger.com data show housing sales in Indias nine major cities declined by 26% in the period between January-March 2020. The demand slowdown in the residential segment has already curtailed housing sales, project launches and price growth in Indias residential realty sector, which has been reeling under the pressure caused by mega regulatory changes caused by the Real Estate Regulatory Authority (RERA), the Goods and

Services Tax (GST), demonetisation and the benami property law. (source: https://housing.com)

Government Initiatives:

? The Prime Minister of India, Mr. Narendra Modi announced various economic packages, having a cumulative worth of around Rs 20 lakh Crore (US$ 283.73 billion) and being almost 10 per cent of Indias GDP. ? Pradhan Mantri Garib Kalyan Package (PMGK) was introduced in April 2020 to provide relief to underprivileged and help them fight the battle against COVID-19. The budget allocated to the scheme was Rs 1.70 lakh Crore (US$ 24.12 billion). ? India is expected to attract investment of around US$ 100 billion in developing the oil and gas infrastructure during 2019-23. ? The Government of India is going to increase public health spending to 2.5 per cent of the GDP by 2025. ? For implementation of Agriculture Export Policy, Government approved an outlay Rs 206.8 Crore (US$ 29.59 million) for 2019, aimed at doubling farmers income by 2022. ? Under the Pradhan Mantri Awas Yojana (Urban), Government has sanctioned more than 96.50 lakh houses under PMAY(U) and approved 606 proposals for the construction of 3,31,075 houses with an overall investment of Rs 15,125 Crore (US$ 2.16 billion). ? The Cabinet Committee on Economic Affairs has approved to increase the authorized capital of Food Corporation of India (FCI) from the existing Rs 3,500 Crore (US$ 500.79 million) to Rs 10,000 Crore (US$ 1.43 billion). ? India has registered a 26.9 per cent reduction in Maternal Mortality Ratio (MMR) since 2013: Sample Registration System Bulletin-2016. ? Around 26.02 million households were electrified by 31st March 2019 under Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA).

? In the mid-term review of Foreign Trade Policy (FTP) 2015-20, the Ministry of Commerce and Industry enhanced the scope of Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS), increased MEIS incentive for ready-made garments and made-ups by 2 per cent, SEIS incentive by 2 per cent and increased the validity of Duty Credit Scrips from 18 months to 24 months. In April 2020, Government extended FTP for one more year (up to March 31, 2021).

Financial Performance Overview:

(Rs In Lakhs)

Particulars Standalone Consolidated
2019-20 2018-19 2019-20 2018-19
Total Revenue 1741.36 1741.87 1741.36 1741.87
Total Expenses 1573.56 1468.72 1573.56 1468.72
Profit before exceptional items & tax 167.79 273.15 167.79 273.15
Exceptional items 0.00 0.00 0.00 0.00
Profit before Tax 167.79 273.15 167.79 273.15
Tax Expenses 47.95 81.18 47.95 81.18
Other comprehensive income (net of tax) 0.00 (34.79) 0.00 (34.79)
Total comprehensive income for the year 119.84 157.19 119.84 157.19

During the financial year 2019-20, total revenue on standalone as well as on consolidated basis decreased to Rs 1741.36 Lakhs as against Rs 1741.87 in the previous year a fall of .03% recorded; Profit before Tax for the current year is Rs 167.79 Lakhs as against Rs 273.15 Lakhs in the previous year a fall of 38.57% recorded and the total comprehensive income stood at Rs 119.84 Lakhs as against Rs 157.19 Lakhs for the previous year a fall of 23.76% recorded. The Companys operations span covers all aspects of real estate development from the identification and acquisition of land to the planning, execution and marketing of its projects. The Company is developing projects mainly in Indore (Madhya Pradesh) and Mumbai (Maharashtra). During the year, the Company has the following projects which are at various stage of progress;

Name of Project Project Type Location
Shri Krishna Emerald Greens Colony Gram Harniyakhedi, Near S.D. Bansal College,
Mhow, Dist Indore (M.P.)
Bloom Park Residential Redevelopment Amboli Village, Andheri West
Saffron Park Residential Redevelopment Azad Nagar, Andheri West
Daffodils Residential cum Commercial Ghatkopar, West, Mumbai
Shrikrishna Corridor Colony Limbodagari, Indore
Shrikrishna Premium Corridor Colony Limbodagari, Indore

Opportunities & Threats:

The health emergency that has force launched the biggest ever work from home experiment globally, putting a question mark on the relevance of workspaces in a post-Corona virus world. Lack of work due to COVID-19 has led to a reverse exodus of labourers. For an already-stressed realty sector, multiple measures are needed to turn the tide and restore normalcy. In the best of times, hiring labour for the realty and construction industries is challenging. Now, the nationwide lockdown due to the COVID-19 pandemic has created an unprecedented predicament. Since millions of workers have migrated to their hometowns due to lack of work, employers are dreading a nightmare scenario. Even when the lockdown is lifted, kick-starting operations will be extremely difficult for almost all sectors. While delayed projects in the pre-RERA era did not affect developers so adversely, this is no longer true. Developers can now be penalised and even put behind bars for inordinate delays. Of course, RERA does provide promoters with a one-year extension in completing projects if the delay is because of events beyond their control. The current lockdown owing to the corona virus crisis has hugely impacted the world economy as well as a majority of sectors across the globe, including real estate. However, there lies an opportunity in every crisis, and Covid-19 looks no different. The who were previously in no mood to purchase a piece of property but have now changed their decision during the lockdown period, unlike before many respondents seeking property from investment perspective prefer ready-to-move-in (RTM) homes.

Segment Wise Performance:

At present, the Company is engaged in the business of real estate development and there is no separate reportable segment.

Outlook:

This year presents unique challenges for Indias residential market. The implied real GDP growth of 5 per cent for FY 2019-20 in the second advance estimates of the National Statistics Office, is now at risk from the pandemics impact on the economy. The government has introduced several short-term relief measures to uplift the Indian economy from the immediate impact of the lockdown. In India, the impact of the ongoing pandemic on business activities became more prominent since the beginning of March 2020. Even though new project launches came to a standstill in March, Q1 2020 witnessed a rise of 3% in new launches as compared to the same period last year. The homebuyer community deferred their purchase decisions in light of the impending crises, which led to sales dipping by nearly 30% in Q1 2020 on a y-o-y basis.

Internal Control Systems and their Adequacy:

The Company has a comprehensive Internal Financial Control system commensurate with the size, scale and complexity of its operations. Your Company lays great importance on internal control systems across the organization. The Company has adequate system of internal control which helps the management to review the effectiveness of financial and operating control as well as to ensure that all the assets are safeguarded and more productive. The system encompasses the major processes to ensure reliability of financial reporting, compliance with policies, procedures, laws, and regulations, safeguarding of assets and economical and efficient use of resources. We have a qualified and independent Audit Committee which comprises of our Board of Directors. The Audit Committee reviews the adequacy and efficiency of internal controls and recommends any improvements or corrections. These internal controls ensure efficiency in operations, compliance with internal policies of the Company, applicable laws and regulations, protection of resources and the accurate reporting of financial transactions.

Disclosure of Accounting Treatment:

In the preparation of the financial statements for the year ended 31st March, 2020, the applicable Indian Accounting Standards (Ind AS) have been followed. Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards

("Ind AS") notified under the Companies (Indian

Accounting Standards) Rules, 2015 with effect from April 1, 2017.

Human Resource Development:

The Company comprises a small team of professionals, who are result oriented, committed and loyal. The number of permanent employees on the rolls of company as on 31.03.2020 was 11. The Company is in real estate sector and for the development of projects we are in, we engage the services of consultants, contractors and sub-contractors who work on our projects, employ a significant labour force which includes skilled, unskilled and semi-skilled workers. In addition to our employees, the Company engages third party consultant engineers, architects, interior designers and landscape designers.

Key Financial Ratios: s Turnover ratio, Inventory Turnover ratio, Interest Coverage ratio, Current ratio, Debt Equity ratio and Operating Profit margin, there were no significant changes (i.e., change of 25% or more) as compared to the immediately preceding Financial Year ended 31st March, 2019.

Ratios Calculation 2020 2019 Explanations
Debtors Turnover Ratio Sales Revenue Average Accounts Receivable 1.89 1.66 Higher due to increase in Sales and decrease in receivable.
Inventory Turnover Ratio Cost of Goods Sold Average Inventory 0.07 0.06 Higher Sales on approx. similar Inventory level
Interest Coverage Ratio EBITDA Interest Expenses 1.53 1.87 Decrease in EBITDA
Current Ratio Current Assets Current Liabilities 1.95 2.09 Decrease due to increase in current liabilities
Total Outside Liabilities
Debt Equity Ratio 1.44 1.47 Decrease due to increase in Shareholders
Shareholders Equity equity and decrease in outside liabilities
Operating Profit Margin EBITDA Sales Revenue 31.37% 36.75% Increase in direct cost
Net Profit Margin Net Income after tax Sales Revenue 7.04% 11.31% Increase in direct cost
Return on Net Worth Net Income after tax Shareholders Equity 1.81% 2.96% Increase in direct cost

Cautionary Statement:

Certain statements contained in this Managements Discussion and Analysis ("MD&A") constitutes "forward-looking statements". These include statements about Managements expectations, beliefs, intentions or strategies for the future, which are indicated by words such as "anticipate, intend, believe, estimate, forecast and expect" and similar words. All forward-looking statements reflect Managements current views with respect to future events, and are subject to numerous risks, uncertainties and assumptions that have been made. Actual results could differ materially from those expressed or implied, depending upon global and Indian demand-supply conditions, changes in Government regulations, tax regimes and economic developments within India and overseas. For and on Behalf of the Board of Directors

Sunil Kumar Jain Mukesh Kumar Jain
Place: Indore Managing Director Director
Date: 25-08-2020 DIN: 00101324 DIN: 00392364