Ashnisha Industries Ltd Management Discussions.

> INDUSTRIAL STRUCTURE AND DEVELOPMENT:

India was the third-largest steel producer in the world in 2018 and it is expected to become the second largest steel producer in the world by 2018. Indias economic growth is contingent upon the growth of the Indian steel industry. The Government has released the National Steel Policy, which has laid down the broad roadmap for encouraging long term growth for the Indian steel industry, both on demand and supply sides, by 2030-31. The Company is in business of trading of steel products, electronics goods and dealing in shares and securities. However Competition in the industry is continuously increasing and management is taking steps to sustain in the emerging high tech market.The steel industry contributes 2% to the GDP of the nation. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour.

> OVERVIEW:

This Management Discussion & Analysis report presents the key performance highlights of the year 2017-18 pertaining to the business of the Company. The Companys financial statements have been prepared in accordance with Accounting Standards, complying with the requirements of the Companies Act 2013 and the guidelines issued by Securities and Exchange Board of India (SEBI).

> OPPORTUNITY & THREATS:

Opportunities:

To take advantage of the various initiatives taken by the Government in the Financial Year 2017. Government is taking many steps to increase per capita consumption of stainless steel products. These will generate a lot of opportunities for the Company which will ultimately lead to achieve the organisations set goals.

Threats:

Dumping of steel from abroad and increased competition from domestic and international steel companies located in India. These factors have eventually exposed enormous strain to the company to survive in this competitive market.

> COMPETITION:

Competition in the market has intensified and forced the players to adopt aggressive marketing strategy and promotional campaigns to capture and protect their market shares, The Company has the plans to penetrate better in to world market, especially through the customer retention and business development in the regions which have not been tapped.

Sharp fluctuations in value of the Indian Rupee and the rising inventory prices have put pressure on the profitability of the Company.

> SEGMENT WISE AND PRODUCT WISE PERFORMANCE:

Details on segment wise performance of the Company is provided separately in Notes to Accounts.

> RISK AND CONCERN:

The company has Robust Risk Management framework that identifies and evaluates business risks and opportunities to protect the interest of stakeholders and shareholders with a view to achieve the business objective effectively. The Risk Management System in the company is an integral part of the comprehensive planning, controlling and reporting systems. Risk assessment is undertaken based on likelihood of occurrence and possible impact on the functioning of the company. It reviews, assesses the quality, integrity and effectiveness of the Risk Management plan and systems and ensures that the risk policies and strategies are effectively managed by the management.

However, the changes in the tax laws, Government policies and regulatory requirement might affect the companys business. Uncontrolled variation in price of input materials could impact the companys profitability to the extent that the same are not absorbed by the market through price increase and/or could have a negative impact on the demand in the market.

The company closely monitors the potential risks and opportunities that arise from Political, Economic & Regulatory environment, Technology Changes, Environment and Competition. We also countered the economic risks with proactive production planning, structural adjustments and cost flexibility.

> INITIATIVES BY THE COMPANY:

The Company has taken the following initiatives:

• Concentration on reduction of costs by undertaking specific exercise in different fields.

• Concentration on Operational Efficiency and strategic expansion.

• Concentration in Increase of Shareholders Wealth and Profit of the Company.

The Company is quite confident that the overall productivity, profitability would improve in a sustainable manner, as a result of this strategy.

> OUTLOOK:

In the recent years, the steel industry has seen significant volatility .The profit margins in the industry are under pressure. However, the Company has taken remedial measures. The Company is confident to meet the challenges with its strength in marketing network, its strategic planning, Research & Development, productivity improvement and cost reduction exercise. The market outlook is expected to improve, but with a slow growth.

> INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company places significant emphasis and efforts on the internal control systems. The Company has appointed an independent firm of Chartered Accountant for the same with such powers and responsibilities that are required to ensure the adequacy of the internal Control System.

> HUMAN RESOURCE:

The Company recognizes the value and contribution of its employees and earnestly endeavors to create a responsive organization with emphasis on performance with responsibility and accountability. Continuous appraisal of the competencies of the personnel in line with job requirements is carried out to facilitate higher levels of output and productivity. Developing skills and capabilities of employees to improve manpower utilization and labour productivity is the key thrust area of Human Resource Management (HRM) in the Company

> HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION:

Your Company has complied with all the applicable environmental laws and labour laws. The Company has been complying with the relevant laws and has taking all necessary measures to protect the environment. Various initiatives have been taken to reduce environmental footprint and enhance operational efficiency have led to significant improvement in environmental parameters as well as techno-economic efficiency

> CAUTIONARY STATEMENT

The statements in the "Management Discussion and Analysis Report" section describes the Companys objectives, projections, estimates, expectations and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.

Place: Ahmedabad
Date: August 13, 2018

For and on behalf of the Board

SD/- SD/-
Ashok Shah Shalin Shah
Director Director
DIN: 02467830 DIN:00297447