Eastcoast Steel Ltd Management Discussions

OVERVIEW

The objective of this report is to convey the Managements perspective on the external environment and steel industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during the FY2025-26. This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in this 11th Integrated Report and 43rd Annual Accounts of the Company for FY2025-26. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (‘Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (‘SEBI) from time to time.

1. Global Economy

In 2025, the global economy grew at an estimated rate of 3.4% despite significant turbulence. The year was marked by record increases in U.S. tariffs and heightened trade policy uncertainty, a raft of trade deals the impact of which is yet to play out, and a surge in AI linked investments. Geopolitical risks intensified during the year, with escalating conflict in the Middle East. These developments heightened uncertainty across energy markets and global trade corridors, increasing volatility in commodity prices and disrupting cross-border logistics. These challenges and uncertainties are continuing into FY2026-27.

Economic Outlook

Global economic growth is projected to slow down with a growth rate of 3.1% in 2026 before recovering to 3.2% in 2027. Advanced economies are expected to grow by 1.8% in 2026, while growth in emerging market and developing economies is projected at 3.9%. Global headline inflation is projected to increase to 4.4% in 2026 and 3.7% in 2027, pausing its previous decline due to higher energy and food prices.

2. Indian Economy

India remained one of the fastest-growing major economies, with a growth rate of 7.5% in FY2025-26. For FY2026-27, real GDP is projected to expand by 6.7%. Headline CPI inflation is projected to rise to the RBIs target of 4% in FY2026-27 from a record low of 2.2% in FY2025-26. Despite this rise, the RBI is expected to maintain current policy with the repo rate settling at 5.0%.

Continued blockades at the Strait of Hormuz, shortages of fuel and elevated energy costs are a key risk to the Indian economy. Given its import reliance, India risks a widening current account deficit, pressure on public finances, consequent tightening in fiscal spend, higher than anticipated consumer inflation and eventual demand erosion, if the blockade continues.

INDUSTRY STRUCTURE AND DEVELOPMENTS Steel Industry

The Company is no longer engaged in manufacturing steel but continued to pursue trading in international market. However, the global demand and supply would have an impact on its activity of international trade.

RISKS AND CONCERNS

The Companys foray into trading of steel products in international market shall of course be subject to the overall demand stabilising in the world market, which looks promising.

OPERATIONAL PERFORMANCE

The trading in Iron & steel products, including engineering products, in the international market is expected to continued.

FINANCIAL PERFORMANCE

A brief review of the financial performance of your Company for the financial year 2025-26 is given below:-

(Amount in Lakhs)

A SUMMARY OF THE MAJOR FINANCIAL RATIOS OF YOUR COMPANYS PERFORMANCE:

Please refer Note. 37 to the financials for the detailed report on the ratios.

HUMAN RESOURCE

The Companys Human Resource Policy provides an environment that motivates its employees to realise their full potential. The Company has put in place a policy that not only increases productivity but also increases the job satisfaction of its employees.

INTERNAL CONTROL SYSTEMS

The Company has effectively and efficiently laid down policies, guidelines and procedures keeping in mind the nature, size and complexity of Companys business objectives. The Company maintains proper and adequate system of internal controls with well-defined policies, systems, process guidelines and operating procedures. The Company positively ensures strict adherence to various procedures, laws, rules and statutes. All transactions are recorded and reported in accordance with the applicable Accounting Standards and within the terms of accounting policies.

The Company has also ensured the periodical Internal Audit by an independent auditor, whose report is submitted to the Audit Committee and Board of Directors for consideration. During the Audit Process no material discrepancies have been reported by the Internal Auditor.

The Audit Committee is responsible to ensure the monitoring of Internal Control System and oversees the various financial transactions on a regular basis and any deviations are promptly reported to the Senior Management to ensure normalcy is established at the earliest, though, no such deviations had been reported by the Audit Committee during the FY 2025-26.

CAUTIONARY STATEMENT

Statements made in the Management Discussion and Analysis describing the Companys projection, estimates and expectations may be interpreted as "forward looking statements" within the meaning of applicable securities, laws and regulations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent information or events.