Lesha Industries Ltd Management Discussions

> INDUSTRIAL STRUCTURE AND DEVELOPMENT:

The global economy demonstrated strong resilience, navigating multiple hurdles such as the ongoing Russia- Ukraine war, escalating geopolitical tensions in the Middle East, and the cost-of-living crisis in several economies, yet India remains to be worlds second biggest crude steel producer. As per general survey steel demand is estimated to grow 7.5 per cent in the year 2023-24. Indias economic growth is contingent upon the growth of the Indian steel industry. In its Interim Budget for FY 2024-25, the Union government earmarked a record 11.1 lakh crore of capital expenditure, up 11.1% from the year earlier period, in line with its infrastructure development-led push to drive sustained economic growth. Along with that, chemical industry is also crucial to the global economy, serving sectors like agriculture, construction, automotive, FMCG, consumer durables, electronics, healthcare, and more. It is undergoing significant change due to mega trends like Sustainability, Supply Chain Resilience & Localisation and Digitalisation. The Company is in business of trading of steel products, electronics goods, chemicals and other ancillary products and dealing in shares and securities. However Competition in the industry is continuously increasing and management is taking steps to sustain in the tremendously viable market.

> OVERVIEW:

This Management Discussion & Analysis report presents the key performance highlights of the year 2023-24 pertaining to the business of the Company. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (Ind-AS), complying with the requirements of the Companies Act 2013 and the guidelines issued by Securities and Exchange Board of India (SEBI).

> OPPORTUNITY&THREATS:

Opportunities:

Various initiatives are taken by the Government such as Steel Scrap Recycling Policy to reduce import, levy of export duty on iron ore to ensure supply to domestic steel industry, focus on infrastructure and restarting road projects aiding the demand for steel etc. These will generate a lot of opportunities for the Company which will ultimately lead to achieve the organisations set goals. Besides this, huge infrastructure demand, rapid urbanization and increasing demand for consumer durables also generate a lot of opportunities for the Company.

- Potentially huge domestic demand from stainless steel intensive investments like engineering sector, defense, consumer durables etc.

- Good, consistent increasing domestic demand.

- Huge potential for productive foreign collaboration.

Threats:

Spurts of price wars and heavy trade discounts have impacted the Indian Steel Industry. The competition from domestic and international steel companies located in India is also increasing which has 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 market, especially through the customer retention and business development in the regions which have not been tapped.

> 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:

Indias production-linked incentive appears to catalyze the downstream sectors. Inflation is steady. India is at the verge of making significant investments in renewable energy and other sectors and emerging as a suitable industrial supplement to China and other Asian Countries. India is poised to outpace Germany and Japan and emerge as the third-largest economy by the end of the decade. The outlook for private business investment remains positive despite an increase in interest rates. The Company is confident to meet every challenge with its strength in marketing network, its strategic planning, Research & Development, productivity improvement and cost reduction exercise.

Economists estimate that the Indian economy will deliver 6-7% growth in next two to three years and move from fifth to third position, in terms of global ranking on nominal GDP. The growth is projected to be led by increase in consumption and investment, decline in inflation levels, improving rural demand (in part helped by subsidies announced in early part of the year) and private capex recovery with reduced policy uncertainty post general elections. Risks to the outlook remain with weakness in the global economy impacting exports, volatility in food and crude oil prices and policy uncertainty post national general elections.

> INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Companys Board of Directors operates an extensive system of internal control. It includes the organisations plans and policies to ensure orderly and efficient business conduct. The Board has also set-up appropriate processes to monitor the relevant external and internal risks affecting the companys growth.

> HUMAN RESOURCE:

The Company values its human resources as its most important asset and focuses on their training, development and wellbeing in the workplace. The Management believes that business cannot expand without utilizing the potential of its workforce. The Board of Directors and the Management acknowledge the contributions of all employees towards the growth of 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:

This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be forward looking statements within the meaning of applicable securities laws and regulations. Forward- looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments.

> DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

In terms of financial performance, Financial Year 2023-24 has been a reasonable year. Company is focussed on the task on hand in terms of better reliability of operations and more focussed market efforts. Our total revenue is Rs. 1156.26 Lakhs and the Company has earned a profit of Rs. 717.70 Lakhs. Cash and cash equivalents at the end of year stood at Rs. 4.21 Lakhs.

> DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Sr. no. Particulars	2023-24	2022-23
1 Debtors Turnover Ratio	15.15	2.84
2 Inventory Turnover Ratio	0.00	0.00
3 Interest coverage ratio	0.00	0.00
4 Current Ratio	0.06	0.83
5 Debt Equity Ratio	1.89	0.02
6 Operating Profit Margin	17.41	8.28
7 Net Profit Margin	0.621	0.028
8 Return on Net worth	0.2866	0.0094
9 P/E Ratio	0.65	0.01

> DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

The Company has earned reasonably better during the year as compared to previous year, hence your company has earned significant sum as return on Net Worth.

> DISCLOSURE OF ACCOUNTING TREATMENT :

The Financial statements have been prepared in compliance with the Indian Accounting Standards (Ind AS) issued by The Institute of Chartered Accountants of India (ICAI) which have been notified under the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS Rules), of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention.

Place: Ahmedabad	For and on behalf of the Board
Date: August 08, 2024	SD/-	SD/-
	Leena Shah	Shalin Shah
	Managing Director	Director
	DIN:02629934	DIN:00297447