sujana universal industries ltd Management discussions

Pursuant to the Regulation 34 read with the Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)

Regulation, 2015 your Directors / Resolution Professional wish to report as follows:

a) . Industry Structure and Developments:

India was the worlds second-largest steel producer with production standing at 111.2 million tonnes (MT) in 2019. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to Indias manufacturing output. The Indian steel industry is modern with state-of-the-art steel mills. It has always strived for continuous modernisation of older plants and up-gradation to higher energy efficiency levels.

b) . Opportunities & Threats :

India is being a very attractive destination for steel consumption, imports have grown by 4.5% whereas exports have fallen by 16 %. The consumption growth is tipped to be driven by expected 7.1% growth in domestic steel demand in calendar year 2020, the Indian Steel Association said adding that demand is likely to grow marginally in the next calendar year 2020 by 7.2%. For financial years 2019-20 and 2020-21, however, the forecast for steel demand growth is 7.2%. Consumption growth is expected to improve driven by measures for farmers, unorganized sector and government employees. Cumulatively, the Indian economy is likely to maintain above 7% growth in the next couple of years.

c) . Risks and Concerns :

In accordance with regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, your Company has duly adopted steps for framing, implementing and monitoring the risk management plan and accordingly your Directors have put in place a critical risk management framework across the Company for identification and evaluation of all potential risks. Your Company is continuously evolving and improving systems and measures to take care of all the risk exigencies involved in the business. All inherent risks are identified, measured, monitored and regularly reported to the management. The management decides required measures to overcome these risks and ensures implementation of proper risk mitigation plans. The risk report and mitigation plans are presented to the Board of Directors periodically.

d) . Outlook

The COVID-19 pandemic has severely affected economies and industries globally and the steel industry is no exception. Therefore, outlook for the steel industry includes scenarios regarding the pandemics speed of propagation, possible recurrence, near-term impact of measures being taken to contain the outbreak, and the effectiveness of the stimulus announced by the Governments of various nations. In India, muted demand and oversupply is likely to result in suppressed steel prices and capacity utlisation in the near term. Since India depends largely on migrant labour, restarting construction and infrastructure projects will be a challenge. The demand from infrastructure, construction, and real estate sectors is likely to be subdued in the first half of the Financial Year 2020-21 due to the lockdown during the first quarter followed by the monsoons during the second quarter. Further, the demand from automobile, white goods, and capital goods sectors is likely to reduce significantly with consumers deferring discretionary spends in the near term. Effective government stimulus and return of consumer confidence is likely to be the key driver for a gradual recovery over the second half of the Financial Year 2020-21.

e) . Internal Control Systems and their adequacy:

Your Company has an effective Internal Control System to prevent fraud and misuse of Companys resources and protect shareholders interest. Your Company has an independent Internal Audit Department to monitor and review and focus on the compliances of various business processes. The internal audit report alongwith audit findings and tracking of process improvements & compliances is presented for review to the Audit Committee of Board of Directors.

f) . Discussion on Financial Performance with respect to operational performance:

The operating performance of the Company has been discussed in Directors Report under the head Financial Highlights & Operations and Overall Performance in the current period.

g) . Segment Wise Performance:

Since your Company operates only in one Segment, segment-wise or product- wise analysis of performance is not applicable.

h) . Material developments in Human Resources:

The Companys human resource policies and strategies seek to ensure a high level of motivation among employees so that they play a significant role in achieving the Companys goal. The Company has initiated various in-house training programs for skill advancement. The Company accords highest priority to ensure safety and protection of health of its employees which are essential to, and form an integral part of, every HR development endeavor. .

There were no cases of sexual harassment of woman at work place. Also, there are no instances of child labour/ forced labour/ involuntary labour and discriminatory employment during the year.

Cautionary Statement

Statements in this management discussion and analysis describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include a downtrend in the industry - global or domestic or both, significant changes in political and economic environment in India, applicable statues, litigations, labour relations and interest costs.

	For SUJANA UNIVERSAL INDUSTRIES LIMITED
	G. Srinivasa Raju, Managing Director
	TAKEN ON RECORD
	Ramakrishnan Sadasivan
	Resolution Professional
	(IP Registration No. IBBI/IPA-001/IP-P00108/2017-18/10215)
PLACE: Hyderabad	(A Company under Corporate Insolvency Resolution Process by
DATE: 7th December, 2020	NCLT order No. CP(IB)No. 186/09/HDB/2019)