Ensa Steel Industries Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

India is the worlds third-largest producer of crude steel (up from eight in 2003) and is expected to become the second-largest producer by 2017. Steel demand has outpaced supply over the last five years. The Indian steel industry is very modern with state-of-the-art steel mills. It has always strived for continuous modernization and up-gradation of older plants and higher energy efficiency levels.

But as per the reports from OECD, the outlook for the steel sector has, unfortunately, weakened further in recent months, reflecting not only cyclical factors such as the slowdown in world economic growth but also growing structural challenges such as excess inflow of imports at predatory prices. With the global business cycle expected to remain subdued over the next few years, resolving the structural factors that are inhibiting the industry from reaching its full potential will remain a key priority going forward.

B. OPPORTUNITY AND THREATS

Your Company operates in an area where a large market exists and offers ample opportunities for growth.

C. OUTLOOK

Driven by rising infrastructure development and growing demand for automotives, steel consumption is expected to reach 104 Million Tones by 2017. It is expected that consumption per capita would increase supported by rapid growth in the industrial sector, and rising infra expenditure projects in railways, roads & highways, etc. Domestic steel production is expected to remain high in the current year 2017-18 and is likely to rise by around 8-10%, an industry research report by CARE Ratings has said.

D. RISKS AND CONCERNS

Your Company has established comprehensive Risk Management System to ensure that risks to the Companys continued existence as a going concern and to its development are identified and addressed on timely basis.

E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate control systems to ensure that all assets are safe guarded and protected against loss from unauthorized use or disposition and that the transactions are authorized, recorded and reported correctly.

F. FINANCIAL PERFORMANCE

Financial performance of the Company has been indicated in the Directors Report.

G. CAUTIONARY STATEMENT

Certain statement in the Management Discussion and Analysis describing Companys objectives and expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied depending upon global and Indian demand-supply conditions, changes in Government regulations, tax regimes, economic developments within India and overseas and other incidental factors.

	By Order of the Board
	For ENSA Steel Industries Limited
	Rajnikant Sandesara	Jayshree Sonawala
Place : Mumbai	Director	Director
Date : May 27, 2017	(DIN :01671907)	(DIN :01539942)