indian bright steel company ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENT

One of the primary forces behind industrialization has been the use of metals. The growth in the Indian steel sector has been driven by the 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 world economy maintained a steady growth trajectory at the start of CY 2022, following a gradual recovery from the pandemic, but it was disrupted by the outbreak of the Russia-Ukraine conflict, steadily rising inflation and delayed normalisation of global supply chains. Inflation was on an upswing following the massive stimulus injection to tide over the pandemic. As central banks prepared to squeeze out excess liquidity to rein in inflation, constrained supply chains were further aggravated by economic sanctions on

Russia and Chinas stringent shutdown to contain the spike in COVID-19 cases. This pushed inflation in advanced economies to multi-decadal highs, led by energy and commodity prices. Accelerated rate hikes by major central banks and slowing demand and investment sentiments impacted economic growth during the year. India is the worlds second-largest producer of crude steel, with an output of 125.32 MT of crude steel and finished steel production of 121.29 MT in FY23. Indias steel production is estimated to grow 4-7% to 123-127 MT in FY24. The growth in the Indian steel sector has been driven by the 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. Source: IMF and India Brand Equity Foundation

COMPANY OVERVIEW

Indian Bright Steel Co Limited was incorporated in the year 1960. Company got listed on Stock Exchange in the year 1961. The Company is engaged in the business of manufacturing of steel bars.

OPPORTUNITIES AND THREATS

The Company is steadily trying to increase its operations and its planning on investing in assets like spare parts which are required in due course in conducting the services of operations. The company is trying to create more opportunities for itself in order to increase its sales and revenue. The Board of Directors have been working relentlessly to add value to the company also so that, it reflects on the share price as quoted on the BSE, where the Companys shares are listed.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

Management is trying best possible ways to revive the business and evaluating various propositions to improve the financial situation and is hopeful of arriving at some conclusion soon.

OUTLOOK

Indian steel demand is expected to be robust and growing by 6.2% in FY2023-24 supported by strong GDP growth forecast, private consumption and Government expenditure. Indias capital goods sector is also expected to benefit from the momentum in infrastructure and investment in renewable energy. Automotive and consumer durables are expected to maintain healthy growth driven by sustained growth in private consumption.

RISK AND CONCERNS

Risk is an integral factor in virtually all businesses. At Indian Bright Steel Co Limited, risks are adequately measured, estimated and controlled. Domestic challenges like inflation, liquidity crunch, slower industrial growth, depreciating rupee, political instability and increasing commodity prices might affect performance.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. Information provided to management is reliable and timely. Company ensures adherence to all statutes. The Internal Financial Control systems are adequate considering the present state of business. The company has established Internal Financial Control framework including internal control over financial reporting operating controls and fraud framework. The framework is revised regularly by the management and tested by the internal audit team. Based on the periodical testing, the framework is strengthened from time to time to ensure adequacy and effectiveness of Internal Financial Controls.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, your Company achieved a total income of 2.10 Lakhs as compared to Rs. 4.81 Lakhs in the previous financial year. The Company incurred loss after tax of Rs. 18.32 Lakhs for the year compared to the loss after tax of Rs. 8.19 Lakhs for the previous year. Management is evaluating various propositions to improve the financial situation and is hopeful of arriving at some conclusion soon.

DEVELOPMENT ON HUMAN RESOURCE FRONT:

At Indian Bright Steel Co Limited, our human resource is critical to our success and carrying forward our mission. With their sustained, determined, and able work efforts we were able to cruise smoothly through the hard time of the economic volatility and rapidly changing market conditions. There is need and the company is focused on retaining and bringing in talent keeping in mind the ambitious plans despite the market and industry scenario.

The Company also believes in recognizing and rewarding employees to boost their morale and enable to achieve their maximum potential.

KEY FINANCIAL RATIOS

PARTICULARS	2022-23	2021-22
Debtors Turnover Ratio	NA	NA
Current Ratio	21.84	15.26
Net Profit Margin (%)	NA	NA
Return On Net Worth	(0.09)	(0.18)
Operating Profit Margin (%)	NA	NA

CAPITAL EXPENDITURE HUMAN RESOURCES

The Company strives to maintain a cordial relationship and healthy atmosphere with its employees at all times. Continuous commitment to upgrading skills is an integral part of the human resource development of the Company. The Company is an equal opportunity employer and promotes diversity in its workforce. Equal opportunities are given to optimize their potential and improve their standard of living. The Company lays great emphasis on retention of its human talents. Employees welfare is a paramount consideration of the Company.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report contains forwarding looking statements based upon the data available with the Company, assumptions with regard to global economic conditions, the Government policies etc. The Company cannot guarantee the accuracy of assumptions and perceived performance of the Company in future. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements. Therefore, it is cautioned that the actual results may materially differ from those expressed or implied in the report.