Manbro Industries Ltd Management Discussions

Annexure A

1. Overview:

Your Company is presently working in the field of Manufacturing of Iron & Steel products, including GFRP rebar and byproducts and to produce and deal in eco-friendly building materials such as AAC blocks, cement, and related products and to establish and operate manufacturing facilities, quarries, and distribution networks.

Your Company has taken more projects by adopting global trends and best practices, the company aims to enhance its operational scale, boost global competitiveness, and improve financial flexibility. These efforts are aligned with the companys objectives to drive revenue growth, increase production volumes, expand market share, and maximize shareholder returns. Engineering, project planning, and cost-effective solutions for infrastructure and manufacturing projects are also being rendered by your Company as a new initiative.

2. Industry Pattern and Development:

Technological advancements have been instrumental in shaping the trajectory of the Indian iron and steel market, enabling manufacturers to enhance efficiency, quality, and sustainability. There is a major shift in the market requirements and generic solutions are now a crowded competitive market. Also, artificial Intelligence has further diluted the bottom segment resulting in an edge only to specialization and cross-platform integrated solutions. The convergence of IoT and AI has ushered in a new era of smart manufacturing in the iron and steel industry. IoT sensors embedded throughout the production process collect real-time data on temperature, pressure, vibration, and other crucial parameters.

3. Opportunities and Threats:

Opportunities in this segment are vast and Indias ambitious infrastructure development plans, including investments in transportation and renewable energy projects, present significant opportunities for iron and steel manufacturers. Rising demand for iron and steelintensive infrastructure projects creates a conducive environment for market expansion and revenue growth. This new emerging segment requires immense study and initial work, seeking a lot of investment at the initial stage with a return starting only after a period of 8 to 12 months. Further, since the cost of operations has gone up this will require a lot of man days of study and development.

4. Segment-wise or Product-wise performance:

Your company mainly operates in unique product segments, within domestic and global market. The management of your Company has continuously reviewed the performance and they found it quite satisfactory. The business is expected to grow in the coming years. However, highlights of the financial performance of the company are given below.

5. Outlook, Risk and Concerns:

The areas of operations of the Company are largely challenged by High competition from established players. Volatility in raw material prices affects production costs and profit margins. However, with the strong team in place of the Professionals, the Company is poised to meet all the challenges and the Board is confident to meet all the challenges to which the Company may be exposed. The Company is exposed to specific risks that are particular to its

business, including interest rate volatility, economic cycle, market risk and credit risk. The management continuously assesses the risks and monitors the business and risk management policies to minimize the risk.

6. Internal control Systems and Adequacy:

The Company has a well-established and comprehensive internal control system. Documents, policies and authorization guidelines comply with the level of responsibility and standard operating procedures specific to the respective businesses. Observation made in internal audit reports on business processes, systems, procedures and internal control and implementation status of recommended remedial measures by Internal Auditors are regularly presented to and reviewed by the Audit Committee of the Board. The system of internal control is being improved to ensure that all assets are safe and protected against loss from unauthorized use or disposition, and that all transactions are authorized, recorded and reported correctly. The Company regularly conducts internal check, using external and internal resources to monitor the effectiveness of internal control in the organization. It strictly adheres to corporate policy with respect to financial reporting and budgeting functions. The Audit Committee of the Board of Directors deals with significant control issues and instructs further areas to be covered.

7. Financial Performance with respect to Operational performance:

The table below gives an overview of the financial results for 2024-25 and 2023-24.:

(Rs in Lakhs)

8. Material Development in Human Resources:

Human resource remains a cornerstone of your company. The Company also recognizes the importance of providing training and development opportunities to its people to enhance their skills and experiences, which in turn enables the Company to achieve its business objectives. Personnel developmental initiatives including training, both technical and managerial, are regularly conducted to enhance human potential. The Company recognizes that its employees are its principal assets and that its continued growth is dependent upon the ability to attract and retain quality people.

9. Details of Significant Changes (There is an impact on sales compared to last year) in key Financial Ratios along with detailed explanation, if any thereof, including the following (last year):

(a) Debtors turnover - 12.76

(b) Inventory turnover — 0

(c) Interest coverage ratio —0

(d) Current ratio — 27.96:1

(e) Debt-equity ratio — 0.01:1

(f) Operating profit margin —6.65%

(g) Net profit margin — 31.05%

(h) Sector-specific equivalent ratio — N.A.

10. Cautionary Statement:

Certain statements in the Management Discussion and Analysis section may be forwardlooking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which would be different from what the Directors envisage in terms of the future performance and outlook. Investors are cautioned that this discussion contains forward looking statement that involve risks and uncertainties including, but not limited to, risks inherent in the Companys growth strategy, dependence on certain businesses, dependence on availability of qualified and trained manpower and other factors discussed. The discussion and analysis should be read in conjunction with the Companys financial statements and notes on accounts.