surya india ltd Management discussions

A. Global Economy

The global economy remained uncertain with continued disruption in the supply chain, increased commodity prices due to the geo-political uncertainties and ebbing of the Pandemic. Supply disruptions, commodity price rises and pent-up demand have led to a high inflationary environment forcing Central Banks across the globe to adopt aggressive tightening monetary policy, resulting in a steep rise in the interest rates. Focused actions on returning inflation to targeted levels have started to exhibit some green shoots, however, Central Banks and the Policymakers continue to keep a close watch on these aspects. As per the estimates of International Monetary Fund (IMF), the global growth should bottom out at 2.8 percent this year and expected to rise to 3 percent in 2024. Further, slowdown is concentrated in advanced economies especially United Kingdom and the Euro area, whereas Emerging and Developing countries are already showing signs of recovery and are expected to grow faster. The IMF also forecasted that the Global headline inflation is expected to fall from 8.7 percent in 2022 to 7 percent in 2023 supported by lower commodity prices. However, it continues to keep a close watch on downside scenarios primarily due to the financial sector turmoil and the continuing geo-political tensions.

B. Indian Economy

The Indian economy continued to exhibit a resilient performance despite global uncertainties. The Reserve Bank of India (RBI) expects the Indian economy to be amongst the fastest growing economies in FY 2023-24 led by improving macroeconomic fundamentals and sustained momentum in domestic economy. The improving economic indicators along with a major capex push by the Indian Government have led to the RBI marginally improving its real GDP forecast to 6.5% for the Fiscal 2023-24. The RBI in its latest Monetary Policy Committee meeting also decided to pause the rate hikes after a cumulative increase of 250 basis points since May 2022. As per IMF reports, the GDP forecast for India has been revised to 6.3% for FY 2023-24 from 6.6% earlier. The primary reason was attributed to slower consumption growth and challenging external conditions.

C. Industry Structure and Developments (Real Estate Market (Leasing) Outlook):

Your Company has rental income from leasing of its properties (which are mainly situated in Malls/ Multiplexes) to renowned food and restaurant outlets chains in India. The real estate industry in India, particularly in the realm of commercial properties, has witnessed a dynamic and transformative evolution. Our company, a prominent player in this landscape, operates within the niche of leasing properties, primarily located in bustling malls and multiplexes, to renowned food and outlet chains across the nation. This strategic focus has allowed us to capitalize on the rapid growth of the retail and entertainment sectors, resulting in a robust stream of rental income. The Indian retail market has demonstrated remarkable resilience and adaptability, navigating through economic fluctuations and even the challenges posed by the global pandemic. As more international and domestic brands continue to expand their footprints, our business has flourished due to the strong demand for prime commercial spaces. Moreover, our expertise in selecting strategic locations and curating a diversified tenant mix has positioned us as a preferred partner for renowned food and outlet chains seeking to establish or expand their presence in India. We remain committed to staying at the forefront of industry trends, embracing technological advancements, and continually enhancing our properties to ensure a mutually beneficial relationship with our esteemed tenants, while maximizing returns for our stakeholders. As we move forward, we anticipate the continuation of favorable market conditions, underpinned by increasing consumer spending, urbanization, and the ever-evolving preferences of the Indian populace.

D. Opportunities and Threats:

Your Company earn primary income from leasing of its properties to renowned food and restaurant outlets chains in India mainly situated in Malls/ Multiplexes and invest/ provide loans to corporates for business expansion purposes in order to generate additional interest income as secondary income. Real Estate is one of the key driving factors behind the growth of the Indian Economy and plays a pivotal role in the nations GDP growth. The year 2022-23 has also been a period of ups and downs for the Indian real estate sector despite the faltering economy we are currently experiencing the real estate sector lived up to its best in 2022-23. The situations are improving now and markets, malls are in process of achieving normal growth.

E. Segment-Wise Performance

The company primarily operates in 2 segments. The bifurcation of segment wise operating revenue is as per details below: -

REVENUE	2022-23	2021-22
	Amount	Amount
	(In lakh)	(In lakh)
From Financing Activities	43.50	34.53
From Rental Income from Immovable Properties	386.85	317.37

The Board of Directors of the Company, which has been identified as being the Chief Operational Decision Maker (CODM), evaluates the companys performance. It is also responsible to allocate the resources based on analysis of various performance indicators. The CODM reviews segmental performance based on revenue only as such other details are not presented.

F. Outlook:

Your Company is exposed to a number of risks such as economic, regulatory, taxation and environmental risks as well as sectoral investment outlook. Some risks that may arise in the normal course of business that could impact its ability to address future developments comprise credit risk, liquidity risk, counterparty risk, regulatory risk, commodity inflation risk and market risk. Your

Companys strategy of focusing on key products and geographical segments is exposed to economic and market conditions. Your Company implemented robust risk management policies that set out the tolerance for risk and your Companys general risk management philosophy. Your Company established a framework and process to monitor exposures to implement appropriate measures in a timely and effective manner.

Outlook for the Company is linked to real estate and Capital Market. The Board of Directors of the Company believes that Companys Investments in the equity shares of various companies would reasonably perform in the ensuing years and also rental income from real estate properties will increase.

G. Risk & Concerns:

The Company is subjected to both external risks and internal risks. External risks due to interest rate fluctuation, slowdown in economic growth rate, political instability, market volatility, etc. Internal risk is associated with your Companys business which includes deployment of funds in specific projects, diversification into other business operations, retention of talented personnel, managing effective growth rate, changes in compliance norms and regulations, contingent liabilities and other legal proceedings. Your Company recognizes the importance of risk management and has invested in people, process and technologies to effectively mitigate the above risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

The Real Estate Companies recognizes several pertinent risks and concerns associated with its core business of leasing properties, primarily within malls and multiplexes, to well-established food and outlet chains across India. Foremost among these considerations is the potential impact of economic fluctuations and market dynamics on the overall demand for commercial real estate. The Company remains vigilant to shifts in consumer preferences and spending habits, which could influence the performance of its tenants and, consequently, affect rental income streams. Additionally, the real estate sector is subject to regulatory changes, both at the national and local levels, which may introduce new compliance obligations or alter the operational environment. Geopolitical uncertainties and changes in trade policies could further impact the success and expansion plans of the tenants, consequently influencing their lease agreements and rental obligations. The Company also acknowledges the competitive landscape within the retail and food industry, as emerging technologies and innovative business models might affect tenant viability and the Companys ability to attract and retain high-profile brands. Moreover, the ongoing maintenance and upgradation of properties to meet evolving consumer expectations and industry standards require prudent financial management and capital allocation. While the Company has taken measures to diversify its tenant portfolio and maintain robust lease agreements, these risks and concerns underscore the need for diligent strategic planning and adaptability to safeguard its revenue streams and sustain long-term growth.

Companys performance is also linked, upto some extent, to the Indian Capital Market as the company has investments in both quoted as well as unquoted shares. Any decline in the price of quoted investments may affect its financial position and results of operations. The value of the companys investments may be affected by factors affecting capital markets such as price and volume volatility, interest rates, currency exchange rates, foreign investment, government policy changes, political and economic developments, crude oil prices and economic performance abroad, etc. The Companys success largely depends upon the quality and competence of its management team and key personnel. Attracting and retaining talented professionals is therefore a key element of the companys strategy. The resignation or loss of key management personnel may have an adverse impact on the Companys business, its future financial performance and the result of its operations.

H. Internal control systems and their adequacy

The Company has an adequate internal controls system commensurate with its size and the nature of its business. All the transactions entered into by the Company are duly authorized and recorded correctly. All operating parameters are monitored and controlled. The top management and the Audit Committee of the Board of Directors review the adequacy and effectiveness of internal control systems from time to time.

I.Discussion on financial performance with respect to operational performance

The brief on Financial Performance with respect to operational performance is already provided in the Boards Report of the Company.

J. Material developments in Human Resources / Industrial Relations front, including number of people employed.

The Company believes that its people are a key differentiator, especially in knowledge driven, competitive and global business environment. Adapting work culture to suit the dynamic balancing of people requirements and employee needs is an ongoing process. Our people are the companys greatest assets. Your company focuses on increasing the overall productivity per employee in the challenging market conditions. Men are the only active agent and acts as a catalyst in effective utilization of all other Ms (Material, Machine and Money). The Board of Directors of your company would like to place on record their sincere appreciation for the efforts and contribution made by all the employees of the Company in the challenging environment. Your Directors take this opportunity to thank all employees for rendering impeccable services to every constituent of Company, customers and shareholders. The Company has a well-defined appraisal system to assess and reward the employees appropriately and also to gauge the potentials of the individuals.

For the financial year ended 31st March, 2023, and as at 31st March 2023 the Company had Three (3) people (excluding executive directors of the Company) in its employment including Key Managerial Personnel.

K. Key Financial Ratio Analysis

A comparative table showing synopsis of FY 2022-23 versus FY 2021-22 of Key Financial Ratio is provided below:

Ratio	Calculation	2022-23	2021-22	Remarks
Receivable Turnover	Net credit sales/ Average Trade Receivable	-	-	The Company does not have revenue from sale/purchase of goods.
Interest Coverage Ratio	EBIT/ Interest Expenses	-	-	The Company does not have any debts.
Current Ratio	Current Assets/ Current Liabilities	16.57%	15.17%	The reason for decrease in the ratio is on account of lower cash and cash equivalent on balance sheet date. However, the ratios draws comfort due to lower current debt repayments.
Debt Equity Ratio	Total debt/Total Shareholders Equity	-	-	The Company does not have any debts.
Net Profit Margin	Net Profit /Net sales	13.51%	(6.94)%	Net profit ratio has improved on account of Increased revenue and absorption of overheads and fixed costs as compared to previous year.
Return on Net Worth	Profit before Tax/ Average Shareholders Equity	0.01	(0.00)	The increase in ratio is on account of better EBIT.

Note: Debtor Turnover Ratio, Inventory Turnover Ratio, Operating Profit Margin is not applicable on the Company.

L. Cautionary Statement

Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like anticipate, believe, estimate, intend, will, expect and other similar expressions are intended to identify “Forward Looking Statements”. The company assumes no responsibility to amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. Actual results could differ materially from those expressed or implied. Important factors that could make the difference to the Companys operations include cyclical demand and pricing in the Companys principal markets, changes in Government Regulations, tax regimes, economic developments within India and other incidental factors.

M. Appreciation

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers and other government agencies during the year under review.

Disclosure of Accounting Treatment:

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015, as amended from time to time.

The Company has not followed a different treatment from that prescribed in the Indian Accounting Standards (‘Ind AS).

For Surya India Limited

Preeti Agarwal	Priyanka Agarwal
Managing Director	Whole-time Director
DIN: 00011450	DIN: 01989753
Add: J-15, Hauz Khas Enclave,	Add: J-15, Hauz Khas Enclave,
New Delhi-110016	New Delhi-110016
Date: 04/09/2023
Place: New Delhi